Exchanges, Subsidies and Medicaid Expansion

ESTABLISHING HEALTH INSURANCE EXCHANGES: AN OVERVIEW OF STATE EFFORTS 

Health Insurance Marketplaces (originally called Exchanges in the Affordable Care Act) are the centerpiece of the health care reform provisions that will be implemented in 2014.  Individuals and small businesses will be able to purchase health insurance in these Marketplaces, and in 2017, states may elect to allow large employers (as well as small employers) to purchase health insurance through these Marketplaces. For 2014, each State has already notified Health and Human Services (HHS) whether it will operate a state-based Marketplace (SBM), enter into a state-federal partnership Marketplace (SPM), or default to a federally-facilitated Marketplace (FFM).  The deadline to opt for a state-based marketplace was December 2012, but states had until February 15, 2013, to notify HHS if they were implementing a state-federal partnership model.  All other states either elected or were defaulted to an FFM.  All three types of marketplaces must be ready to begin enrolling consumers into coverage on October 1, 2013, and must be fully operational on January 1, 2014. Given that October 1 is less than four months away, states face serious challenges to making the necessary policy and implementation decisions.

Here’s the breakdown of state, partnership and federally-facilitated marketplaces, as of June 15, 2013.  States in each category are listed below, followed by a map showing the states’ decisions:

• State marketplaces:  16 states plus the District of Columbia have notified HHS of their intent to establish a state-based marketplace and have received approval from HHS. Only Mississippi’s application for a state-based exchange was rejected by HHS due to a dispute between the Governor and the Insurance Commissioner.
• Federally-facilitated marketplaces: 25 states have said they will default to a federally-facilitated marketplace in 2014.
• State-federal partnership: 7 states have notified HHS of their intent to operate state-federal partnership marketplaces in 2014.
• Hybrids: Federally-facilitated Individual Marketplace and State-run SHOP Marketplace: 2

States that elect a federally-facilitated marketplace or a state-federal partnership in 2014 may in a later year transition to a state-based marketplace.  For example, Illinois has already stated its intent to move from a federally-facilitated marketplace in 2014 to a state-based marketplace in 2015.

State-run Marketplaces in 2014 (16 states + District of Columbia):

Federally-Facilitated Marketplaces in 2014 (25 states):

State-Federal Partnership Marketplaces in 2014 (7 states):

Hybrids:  Federally-Facilitated Individual Marketplace and State-run SHOP Marketplace