The Robert Wood Johnson Foundation (RWJF) released a report today that explores three ways that states can comply with the Affordable Care Act's (ACA's) health insurance exchange provision. First, states can establish an exchange of their own; second, states can default to a federal exchange; or third, states can create a hybrid exchange. On behalf of the National Academy of Social Insurance (NASI), the authors evaluated the considerations associated with each option to help states determine which model may work best for the unique needs of their residents. Although the underlying goals are the same in all three Exchange models, there are differences in the amount of flexibility and autonomy granted to the States with each. State Exchanges, for example, offer the greatest independence in functions like coordinating plan enrollment, eligibility, and financial management. States cede much of this autonomy with the Federal Exchange model. As its name implies, the Hybrid Exchange allows states to retain responsibility for certain core functions, while importantly, also providing an interim pathway for an eventual State Exchange. The authors conclude that regardless of the model, success can only be achieved through intensive collaboration between individual states and the U.S. Department of Health & Human Services.

State-based health insurance Exchanges are a key component of the Patient Protection and Affordable Care Act (ACA) of 2010, facilitating expanded access to coverage for millions of individuals and employees of small businesses. The Exchanges will enable consumers to readily compare qualified health insurance options in order to select plans that best meet their needs. Premium and cost-sharing subsidies will make health coverage more affordable for low and moderate-income individuals. In this issue brief, The Henry J. Kaiser Family Foundation reviews states' progress to date in creating health insurance exchanges. While some states have already taken major steps toward establishing an exchange, other states have struggled to pass legislation or have opted not to begin the process of establishing one.

A new paper by Professor Timothy Jost and funded by the Commonwealth Fund examines health insurance exchanges and offers insight into 8 difficult issues that face Exchanges.