Insurance exchanges under health reform: six design issues for the states

The Patient Protection and Affordable Care Act depends on new, state-based exchanges to make health insurance readily available to certain segments of the population. One such segment is the lower-income uninsured, who can qualify for subsidized coverage only through an exchange. Other segments are unsubsidized individuals and small employers, who may choose to buy coverage inside or outside of an exchange. Although the law provides some guidance in structuring these new exchanges, it leaves many key decisions to the states. Successfully implementing exchanges will require public-private partnerships, expertise in insurance operations and marketing, and a series of strategic decisions. We review the half-dozen most important design issues.