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State Policy Decisions in Exchange Implementation

The Affordable Care Act (ACA) establishes a health insurance exchange in every state.  Exchanges are new competitive marketplaces offering an array of comprehensive health insurance plans for eligible small businesses and individuals, some of whom may qualify for federal tax credits to help cover the cost of coverage.  Each exchange will be operated either by the state as a State-based Exchange (SBE), or by the federal government as a Federally facilitated Exchange (FFE).  States also have the option to engage in a partnership with the FFE, resulting in a State Partnership Exchange.

While there are a number of functions and standards that are required for a state to obtain HHS approval of its exchange, there are many areas in which a state has significant flexibility to customize its exchange to best meet the needs of its residents.  These guides are a compilation of state decision points and are intended to aid state consumer advocates, policymakers and other stakeholders involved in exchange implementation. 

They include the following areas in which states have various levels of flexibility:

  • Exchange establishment
  • Consumer assistance
  • Plan management
  • Eligibility and enrollment
  • Small Business Health Options Program (SHOP)
  • Essential Health Benefits (EHB)
  • Basic Health Program (BHP)
  • Risk adjustment and reinsurance