State or Federal Exchanges: It’s Like Musical Chairs

For a lot of agents, this is the slow time of the year. The problem is, if you take a few days off, you might miss a major development in one or more states where you’re licensed to do business. Over the past week, several states have indicated that they’ll make a change to their individual marketplace next year – some are moving from a state exchange to the federal exchange; others that are currently using are considering establishing their own exchange website. It’s like musical chairs, or a cat that can’t decide if it wants in or out.


Here’s what’s happened just in the past few days:

As reported by the Pacific Business News, the Hawaii Health Connector board has voted to “wind down operations and transition to move all IT functions to the federal system.” This follows similar decisions in Oregon, Nevada, and New Mexico.

We could see the same thing happen in Kentucky. Although Kentucky has perhaps the most successful state exchange and frequently serves as a success story for the White House and a model for other states, Republican gubernatorial nominee Matt Bevin is not a fan and has vowed to eliminate both Medicaid expansion and Kentucky’s state exchange if he wins the election this November. Politico provides coverage of this story.

Pennsylvania and Delaware, on the other hand, could be moving from the federal exchange to a state exchange model. As Kaiser Health News reports, Pennsylvania and Delaware have both submitted plans to set up their own state exchanges but continue to use the “federal IT system and the website.” The move appears to be a contingency plan in case the Supreme Court tosses out the subsidies in states using the Federal marketplace. Other states that currently rely on, of course, are likely making similar plans. A number of recent news stories point out that a majority of Americans would want Congress to correct the problem if the Supreme Court rules in favor of the plaintiffs, and a slightly smaller majority would want their states to develop their own state exchange to allow the subsidies to continue.

What does this mean for brokers?

Well, if you’re just licensed in one state and it’s not one of the ones mentioned above, these developments may not affect you. On the other hand, since there are certainly other states quietly considering a move to their own state exchange, it may affect you but you just don’t know it yet. Because the state and federal exchanges can make different decisions about how they work with agents, including the required certification process, it could have an impact on the hoops you have to jump through in order to sell exchange-based, subsidized plans. We’ll have to wait and see.


If you’d prefer not to wait, though, or if you’d like to sell in multiple states without jumping through hoops, or if you’d prefer not to deal with or worry about state or federal exchanges, you could establish  your own private exchange and outsource your individual enrollments to a call center licensed in all 50 states. You’ll still earn a portion of the commission, but instead of having to do all the training and the one-on-one enrollments, you can more effectively use your time to find prospective enrollees and educate them as a group. It’s a much more efficient – and much more profitable – way to do business. Learn more here.

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