Updated Overview of State Efforts Establishing Health Insurance Exchanges

November 29, 2012

State-based health insurance exchanges, or marketplaces, are a key component of the Affordable Care Act (ACA), and the places where individuals and small businesses will be able to shop for coverage. States have the option of operating their own exchange or partnering with the federal government to run an exchange. States choosing neither option will default to a federally-facilitated exchange. All exchanges, regardless of how they are administered, must be ready to begin enrolling consumers into coverage on October 1, 2013 and must be fully operational on January 1, 2014.

While many states have already announced their intentions, several remain undecided as to which exchange approach they will take. The Department of Health and Human Services (HHS) recently extended the deadlines for states to make their decisions, giving states until December 14, 2012 to decide whether to run a state-based exchange, and until February 15, 2013 to opt for a partnership exchange. Even with the additional time for decision making, states opting for a state-based or partnership exchange will face challenges to making the necessary policy and implementation decisions.