Comparing State-Run and Federal-Run Exchanges

Sep 12, 13 Comparing State-Run and Federal-Run Exchanges


As the deadline for implementing health insurance exchanges approaches, nearly half the states in the Union have declared to participate in federal-run exchanges (FFE), while the remaining will establish state-run exchanges either independently or in partnership with the federal government.

Three key differences between state-run and federal-run exchanges that may have a significant impact on the multicultural population are:

1. FFEs make it easier for lower-income people with income fluctuations over the course of the year to oscillate between Medicaid/CHIP coverage and private individual insurance by requiring that plans from these programs offer similar benefits and provider networks.

2. In those states where the local government resisted Medicaid expansion, FFEs will allow eligible individuals to purchase insurance coverage through the exchange with federal subsidies.

3. As states determine their own key regulations, the federal government needs to know each state’s unique laws and policies to run the FFE and to select qualified health plans that may participate. This makes it harder for FFEs to provide consumer assistance because this requires more effort and resources in order to produce knowledgeable navigators to support the local exchanges, which depends on availability of training grant funds.

“Over 10 million people from the multicultural segment will be eligible for individual insurance through the Health Exchanges,” said George L. San Jose, president and chief creative officer at The San Jose Group. “This makes it essential to realize that enrollees of multicultural origin will be a huge part of participants in either FFE or State-Exchanges, as well as beneficiaries from Medicaid Expansion.”

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