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Key Elements of State-Run Heath Insurance Marketplaces



This week in Washington—addressing key elements of state-run marketplaces. You are tuning in to the health policy update from America’s Essential Hospitals for the Week of Sept. 9.

The Affordable Care Act (ACA) requires that every state have a health insurance marketplace. All of these marketplaces will help consumers buy health insurance, but individual marketplaces will do this in different ways.

Some states will run their own marketplaces. These state-run marketplaces will be different from those run jointly by states and the federal government or run entirely by the federal government.

State-run marketplaces will also differ from each other in important ways. That’s because states running their own marketplaces can define all of the elements of the marketplace, so long as they comply with federal guidance. Three of these elements are how the marketplace will be governed, how it will certify health insurance plans, and how it will provide consumer assistance.

First, state-run marketplaces can define whether the state government, a non-profit organization, or a hybrid entity that has elements of both structures will govern the marketplace. Governance structure is important because it can impact how the marketplace enrolls people in health insurance. For example, about 10 states have decided that their marketplaces will be governed by independent public agencies, which are public entities that function like private organizations.

This type of governance structure has two key advantages that help the marketplace enroll people in health insurance. One, it allows the marketplace to have more flexibility in day-to-day business activities than a state agency, which has to operate within government bureaucracy. Two, it allows the marketplace to have more streamlined access to personal information collected by the states than a private organization.

Another element state-run marketplaces can define is the set of requirements a plan must meet to be sold as a “qualified health plan.” Defining these requirements for plan certification gives states a significant say in what plans sold through the marketplace will look like. For instance, one of the federal requirements that plans must meet is network adequacy. In part, this means states can set their own standards for ensuring that plan networks include providers who work with predominately medically underserved populations, or what the ACA calls “essential community providers.” States running their own marketplaces have the authority to define this standard, and, as a result, play a large role in determining the providers and services that are included in marketplace plans.

A third important element is the flexibility that states have in determining how the marketplace will help people understand their insurance options and enroll in insurance coverage. This flexibility allows states to tailor assistance tools to meet the needs of their own populations. States are required to launch a website that provides information about insurance options available through the marketplace. They are also required to set up and run a call center that will assist consumers shopping for insurance.

Overall, the decisions states make about governing their marketplace, plan certification, and consumer assistance will impact the number of people who enroll in health insurance coverage. These decisions also will impact the costs for hospitals to provide care and how much people will pay for health insurance coverage.

Thanks for listening to another edition of This Week in Washington. I’m Erin Richardson; join us next week as we continue our discussion of health insurance marketplaces.


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