What Can Help States Create Health Insurance Exchanges?

A major component of the Affordable Care Act (ACA) is the creation of state-based health insurance exchanges—online marketplaces where consumers and businesses can compare and purchase coverage. 

The ACA outlines some structural and functional requirements for the exchanges, but states have considerable flexibility in how they are set up and run. 

The structure of each state-based health insurance exchange will be tailored to the individual state and likely based on its existing insurance market, as well as its administrative capacity, long-term policy goals and the needs of its residents.

Several states –Massachusetts and Utah –set up their own exchanges before the ACA became law, but they are very different models. Massachusetts is an "active purchaser" and plays the role of vetting health plans, while Utah takes a free market approach and allows any insurer to participate with far less regulation.

Lessons from these existing state-based exchanges and from eligibility and enrollment with other programs can guide and inform states through their development process.

This Health Policy Brief, published online in August 2011, examines the various options that states have in formulating their health insurance exchanges.

Read more from RWJF's Health Policy Snapshot series.