The Obama administration has released a new report tracking the progress of states in building the health care exchanges that are part of the Affordable Care Act. Twenty-eight states and the District of Columbia “are on their way toward establishing their own Affordable Insurance Exchange,” the report notes and have received three rounds of grants from the federal government to set-up the new regulated marketplaces where small businesses and individuals will be able to compare and shop for comprehensive insurance beginning in 2014. States that fail to build their own exchanges will have to turn over their markets to the federal government.
The theoretical concept of encouraging insurers to compete on a level playing field within a new regulated market was originally developed by the Heritage Foundation in the 1990s and later embraced in Mitt Romney’s Massachusetts health care reform law. As the administration’s report notes, it’s also gaining momentum in some right-leaning states, many of which are also suing over the constitutionality of the Affordable Care Act:
— Nevada: The Silver State Health Insurance Exchange was authorized through bipartisan legislation passed unanimously by both chambers of the Nevada Legislature and signed into law by Governor Brian Sandoval (R) on June 16, 2011. […] Its seven-member board was appointed on September 23, 2011 and met for the first time on October 26, 2011.
— Alabama: Governor Robert Bentley (R), a physician, issued an Executive Order that created the Alabama Health Insurance Exchange Study Commission on June 2, 2011. […] Alabama received an Exchange establishment grant of $8.6 million on November 29 from HHS. The State also is participating in a technical assistance program run by the Robert Wood Johnson Foundation. The legislature, which meets in February, is expected to take up legislation to establish an Exchange.
— Mississippi: The State created a Mississippi Health Insurance Exchange Study Commission in 2010, and used its $1 million planning grant to fund research and outreach. On April 26, 2011, then-Governor Haley Barbour (R) signed a law that allowed the Study Commission to continue its work through 2011. […] After legislation authorizing an Exchange failed to pass, the State determined in October 2011 that the previously authorized non-profit high-risk pool association could broaden its mission to run the State’s Exchange.
— Michigan: On September 14, 2011, Governor Rick Snyder (R) announced his intent to create a State-based Exchange called MIHealth Marketplace. […] The Senate passed bi-partisan exchange legislation in November, however the House failed to act. On November 29, the State was awarded $9.8 million to establish its Exchange and is seeking the legislature’s authority to spend the funds
— Pennsylvania: On November 23, 2011, Governor Tom Corbett (R) announced his commitment to establishing a State-based Exchange. […] Pennsylvania used the majority of its Exchange planning grant to award a contract to a consulting firm to conduct extensive background research. This resulted in a comprehensive analysis of Exchange governance models, business operations, structure, plan management and financial management.
Federal regulators have also been eager to allow states additional flexibility in forming the exchanges. States can choose to share responsibilities with the federal government and use their establishment grants “to test their systems for their Exchanges that start later than 2014.”