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July/August 2015 St@teside

How Feasible is It for State-Based Marketplaces to Contract Out Their Operations?

As we approach the third open enrollment under the Affordable Care Act (ACA) and the end of federal grants to support exchange development, states that have developed their own marketplaces are confronting new budget challenges and looking to streamline operations. Additionally, some of the 34 partnership and federally-facilitated marketplace (FFM) states may decide over the next several years to develop their own state-based marketplaces (SBMs). For states that cannot sustain their original approach, as well as states newly planning their own SBMs, a novel approach is now available and merits consideration.

This new brief, “Assessing a New Option: The Feasibility of Contracting With a Single Firm to Build and Operate a State’s Marketplace,” prepared by Wakely Consulting Group with support from the State Health Reform Assistance Network, assesses the feasibility of a state delegating the development and operation of its SBM, to the fullest extent possible, to a private exchange operator, and the potential advantages of this approach. It also includes a review of the types of vendors that have the most promising capacity and experience to manage an SBM’s functions.