In the 16 months since the healthcare reform bill was signed into law, there's been a lot of guessing over how the health benefits exchanges will operate. As of July 11, there's less guessing. But that doesn't mean policy makers in some states are eagerly writing legislation to get the ball rolling.

With the release of the first set of proposed rules for the exchanges, states and insurers can start making critical decisions: Who will govern the exchanges. How many carriers will be part of them? How exactly will they operate?

States were given a good deal of freedom in crafting the insurance marketplaces that are a central part of the Affordability Care Act. States will decide which insurers are qualified health plans. They will be able to define the adequacy of provider networks. And they can structure governing boards in various ways as long as they don't contain a majority of insurance industry representatives.

Insurers of all sizes are interested in being part of the exchanges, which will serve both individuals and small-business employees the potential 24-million-member market is a huge draw. But they won't be able to assess their strategy seriously until the Health and Human Services Department comes out with a second set of rules on benefit designs. That release could come this fall.

Until then, the action or inaction will be in state capitals. Sacramento and Salem are buzzing with exchange-related activity. Tallahassee and Atlanta not so much. More than 10 states have passed exchange-related legislation and others are working on them without laws. But there are many states including a number in the Southeast--where the governors are hoping the legal challenges to the ACA will succeed and that the whole reform mess will go away.

Rolling the dice on implementing the ACA is a risky strategy. Even if court challenges to the individual mandate part of the ACA succeed, the exchanges may survive. Then, states would have to scramble together an exchange in time for the Jan. 1, 2014 launch, or the federal government will do it for them.

For insurers and those who do business with them, the situation is one more example of how what works in Peoria won't fly in Albany.


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