A central feature of the federal health reform legislation is its creation of health insurance exchanges, or state-based marketplaces in which individuals and small businesses can compare and purchase health plans, and determine and receive premium subsidies for which they are eligible. States will face a multitude of decisions regarding the exchanges' governance, design, marketing, administration, technology, and other factors.
Timothy Jost, J.D., law professor at Washington and Lee University, answers questions about states' role in selecting plans to participate and options for reducing adverse selection in health insurance exchanges.
The following Snapshots examine the two states that already have functional statewide exchanges—Massachusetts and Utah—as well as California, which was the first state to enact legislation to establish an exchange after the passage of the Affordable Care Act. We highlight how their approaches to defining the exchange marketplace diverge and where they overlap, and discuss their strategies for mitigating adverse selection.
The Massachusetts Health Connector was created as an independent state agency charged with implementing many elements of the state's 2006 health care reform.
The Utah Health Exchange is a Web portal through which small businesses can make a defined contribution—a fixed dollar amount per employee—toward health insurance, and their employees can compare and select health plans from a range of options.
As the first state to enact legislation to create a health insurance exchange since the passage of the Affordable Care Act, California is an early example of how the law's vision of state-based exchanges can be implemented.