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Federally-Facilitated Exchanges and the Continuum of State Options

By: Deborah Bachrach and Patricia Boozang
Published: December 2011

Summary: This report gives states and stakeholders a first look at different models for health insurance Exchanges authorized in the Affordable Care Act (ACA). The report explores the continuum of Exchange options, from entirely state-operated to entirely federally-operated, and examines the implications for states in selecting various models in terms of Exchange functions and operations.

States face complex challenges in balancing the desire for autonomy with the opportunity to rely on federal solutions for new responsibilities required of all Exchanges. This report suggests how the core functions of the Exchange might be effectuated in State-based, Federally-facilitated and Partnership Exchange models and the legal, operational and fiscal implications of each. The core functions addressed are eligibility, enrollment, plan management, consumer assistance and financial management.

Federally-Facilitated Exchanges and the Continuum of State Options, part of a NASI project funded by the Robert Wood Johnson Foundation (RWJF) and the RWJF State Health Reform Assistance Network, is one of the first examinations of the different Exchange models since the Department of Health and Human Services issued draft regulations in the summer of 2011 and guidance in November 2011. Related products include a toolkit offering legislative language for policymakers implementing Exchanges and issue briefs on Exchange governance and active purchasing.