The Affordable Care Act (ACA) established health insurance exchanges—also known as "marketplaces"—in each state as a cornerstone of its health coverage expansion and insurance-market reforms. Exchanges will serve as portals through which individuals and small businesses can compare and purchase private health plans that have been "certified" as meeting federal and state standards. Exchanges will also allow individuals with low-to-moderate incomes to access public coverage programs, such as Medicaid and the Children’s Health Insurance Program, or financial assistance to purchase private coverage. Certain small businesses also will be able to access tax credits for employee coverage through exchanges. According to the Congressional Budget Office, an estimated 9 million people will enroll in coverage through individual and small-business exchanges in 2014, increasing to 29 million by 2022.
Under the Affordable Care Act, states may establish and run the exchange in their state, or they may defer responsibility to the federal government. Since the law was enacted, the Department of Health and Human Services (HHS) has created multiple variations of these two options that provide greater flexibility to states to take on responsibility for some, but not all, functions.
By January 1, 2014, all states must have an operational individual and small-business exchange, regardless of whether it is run by the state or the federal government. In practice, exchanges are supposed to be ready by October 1, 2013, the start of the initial open-enrollment period. Although all exchanges will be built off a common framework set by the Affordable Care Act, the design and operation of exchanges is expected to vary substantially among states because of the flexibility states have been given.
Consumers can get coverage effective as soon as January 1, 2014, with the first open-enrollment period slated to run from October 1, 2013, to March 31, 2014. A recent Commonwealth Fund study demonstrates that states have made substantial progress in designing their exchanges to date; however, certain policy and operational decisions remain to be made.