Majority of States Opt for Federal Health Exchanges

December 19, 2012

pic-healthThe deadline for states to declare to the U.S. Department of Health and Human Services (HHS) whether they intend to run their own health insurance exchange passed last week with 26 states declining to establish their own exchange, thereby allowing the federal government to run the exchange in their state.

Health insurance exchanges will be, essentially, a structured marketplace where relatively standardized health insurance policies are offered by insurance companies and complete information disclosure is required in a standardized format. The Patient Protection and Affordable Care Act (PPACA) requires that states establish an “American Health Benefit Exchange” that meets approximately 10 criteria.  If they do not, then the federal government will establish a federal health insurance exchange in the state.

NSBA supports state level health insurance exchanges, provided that participation in the exchange is voluntary, as a reasonable step designed to improve the competitiveness of the health insurance market, to increase the information available to health insurance purchasers (whether individual consumers or small businesses) and to constrain health insurance costs.

The deadline for states to declare to HHS whether they intend to run their own health insurance exchange was December 14.  18 states (including California and New York) and the District of Columbia have elected to establish state run health insurance exchanges.  Six states (including Illinois and Michigan) have elected to establish partnership exchanges with the federal government.  26 states (including Texas, Florida, Pennsylvania and Ohio) have declined to establish exchanges.  Therefore, the federal government will operate exchanges in those states.

To see a map of which states have decided to establish state or partnership exchanges and which states have declined to establish exchanges, click here.