States face a number of decisions regarding how to establish an Health Insurance Exchange as part of the Health Reform Bill. The State Health Access Data Assistance Center (SHADAC) describes in detail these policy choices. The decisions include:
- Creating separate exchanges for individuals and small businesses or combining the nongroup and small group markets into a single exchange
- Allow the federal government to operate an exchange on the state’s behalf
- Create a single-state exchange, regional exchanges (which include more than one state), or subsidiary exchanges (which serve distinct geographic areas).
- Selecting the Exchange administrator which could be: a federal agency (if states cede control over exchange design and implementation), a state government, a quasi-public agency, a private or a nonprofit entity.
- Acting as a market organizer (serving as impartial information source that lists and compares all qualified health plans) or an active purchaser (using a bidding process, applying restrictive certification and reporting requirements, and/or negotiating with plans to identify and select high performers).
- Establishing minimum certification requirements (e.g., quality measures, claims payment policies and practices, and financial disclosures as well as data requirements describing enrollment, disenrollment and denied claims.
- Determining specifications to define which tier a plan fits into (bronze-level provides benefits equal to 60 percent of the actuarial value of plan benefits, the silver level covers 70 percent, the gold level covers 80 percent, and the platinum level covers 90 percent).
- Funding Exchange operations through mechanisms such as general revenue or assessments on plans, employers, or individuals.
- Restrictions on how qualified health plans (QHPs) operate outside the Exchange.
Current Exchanges already in operation include:
- Massachusetts Health Connector
- Utah Health Exchange
- Connecticut Business and Industry Association (CBIA) Health Connections
- Washington Health Insurance Partnership (HIP) – [Note: HIP is no longer accepting applications for enrollment due to recent loss of funding in the federal budget.]
Source: State Health Access Data Assistance Center (SHADAC) “Health Insurance Exchanges: Implementation and Data Considerations for States and Existing Models for Comparison” October 2010.