A review of states' decisions regarding health insurance exchanges

Health insurance exchanges play a principal role in the structure of the Patient Protection and Affordable Care Act’s (ACA) goal of providing access to affordable, quality health insurance, and reducing the growth in health care spending in the U.S. Exchanges are proposed to simplify and streamline the health insurance choices and benefits for individuals and small businesses. The ACA and the Exchange Final Rule stipulate states are required to have an approved statebased exchange or participate in the federally facilitate marketplace. This paper examines the variety of decisions made by states, including the type of exchange established, the structure of the exchange and various other relevant characteristics. Additionally, we examine whether any significant differences exist between state-level population demographics and political factors by exchange type. Our discussion highlights the heterogeneity in states’ decisions regarding health insurance exchange and provides a valuable source of intuitional information that helps to inform regulators, policymakers and other health insurance market participants. Our paper also helps identify future research topics related to health insurance markets and exchanges.