Bookmark and Share

April 2011 St@teside

State Roundup: Health Benefit Exchange Legislation

While states around the country continue to grapple with the question about whether or not to pursue the development of a state-based exchange, a great deal of activity on exchange legislation has been occurring in a number of states.

In addition to the California exchange bill that was enacted in September 2010, as of April 26, 2011, five states have passed some version of exchange legislation. The vast majority of states with pending or passed exchange legislation are planning to establish a quasi-governmental governance structure. In total, 3 states are planning to house the exchange in a state agency, 28 are planning to establish a quasi-governmental entity, and 5 plan to establish a not-for-profit exchange.1

State Roundup:

On April 12, Maryland enacted legislation establishing the exchange as an independent unit of state government. The legislation includes provisions that promote transparency, accountability, and flexibility, and establishes an exchange board. The board will be comprised of nine members: three are state officials (the Maryland Insurance Commissioner, the Secretary of Health and Mental Hygiene, and the Executive Director of the Maryland Health Care Commission) and six are appointed by the governor and represent employer and consumer interests or have specific knowledge and expertise. In addition, the legislation addresses conflict of interest by excluding certain stakeholders from becoming members of the board.

On March 12, West Virginia passed health benefit exchange legislation.The bill authorizes the establishment of the exchange within the Office of the Insurance Commissioner as a governmental agency, although it will be exempt from the rules of state purchasing and state personnel and will be allowed to enter into contracts with state or federal agencies as well as other state exchanges. Some of the issues addressed by the law are requirements for the board of directors and provisions allowing the board to hire an executive director and other necessary staff, providing for an annual report by the board, and authorizing assessment of fees. The board will be comprised of 10 members: 4 agency heads (representing the Office of the Insurance Commissioner, the Health Care Authority, Medicaid and CHIP); 4 governor appointees (representing individual consumers, small employers, labor, and producers) and 2 selected by advisory committees of the group. Beginning July 1, 2011, the board is authorized to assess fees on health carriers and the funds collected will be used for the operation of the exchange. The law also creates a special fund for the exchange that will be administered by the board and will pay for the operations of the exchange.

On April 22, Washington’s legislature passed a bill authorizing a health exchange. It is expected to be signed by Governor Chris Gregoire. The bill establishes the exchange as a public-private partnership separate and distinct from the state. The Health Care Authority (HCA) would perform duties outlined in the bill until March 15, 2012, when all the duties and responsibilities would be transferred to the exchange and its board. The board would be appointed by the governor from a list of nominees submitted by the House and Senate caucuses and would include at least one employee benefits specialist, one health economist or actuary, one representative of small business, and one representative of health consumer advocates. The governor would also appoint a chair who serves as a nonvoting member and is not a government employee. In addition, the bill establishes guidelines to prevent conflict of interest and establishes a non-appropriated Health Benefit Exchange Account to receive federal grant funds.

Virginia recently passed a bill stating its intent to create an exchange.  The bill instructs the governor and the State Corporation Commission’s Bureau of Insurance to work with the General Assembly, relevant experts, and other stakeholders to provide recommendations for consideration by the 2012 Session of the General Assembly regarding the structure and governance of the Virginia exchange.

North Dakota’s legislature has sent a bill to Governor Jack Dalrymple who has ten days to either veto the bill, or let it become law. The bill would allow the state to start establishing an exchange and pursue additional funds from the federal government.

Oregon’s Senate passed an exchange bill on April 25. It now moves to the House where lawmakers may make changes to address the concerns of consumer groups critical of the current bill.2 The current language states that the exchange will set up a public corporation with a board comprised of three voting ex officio members and six members who are appointed by the governor.

Three other states— Arkansas, Hawaii, and Oklahoma—also have pending legislation expressing intent to establish an exchange.

In Arizona, Arkansas, Georgia, Mississippi, Montana and New Mexico, legislation has failed, expired, or been withdrawn. Three states, Mississippi, Utah, and Wyoming, have passed legislation to study an exchange, while three others – Illinois, Indiana, and Nebraska – have pending study legislation.

To view a map which indicates the status of exchange legislation across the country, please click here. This map does not entirely reflect the intent of all states, as some legislation that had been filed has already failed or does not have a strong chance of passing, while other states that are planning to host an exchange have not yet filed legislation. In addition, Massachusetts and Utah have existing exchanges that will need to be adapted to comply with federal law.

To view legislation from all 50 states and the District of Columbia, click here.

1Chandra, D. (2011, April 25). Analysis of State Health Insurance Exchange Legislation Establishment Status and Governance Issues.Center on Budget and Policy Priorities. Retrieved April 27, 2011from

2Cooper, J.J. (2011, April 23). Oregon Senate schedules Monday vote on insurance exchange. The Associated Press. Retrieved April 26, 2011 from