Author Linda Blumberg, senior fellow in the Urban Institute’s Health Policy Center, explains four reasons why states may join together to establish multi-state exchanges:
• Given the common tasks that need to be performed, administrative economies of scale could be significant.
• Regional exchanges covering large metropolitan areas that cross state boundaries may simplify reform mandates.
• Multi-state exchanges may promote pooling across state lines.
• Multi-state exchanges could lead to a critical mass of insured persons to create stabilized risk pools in low-population states.
Ms. Blumberg adds multi-state exchanges will most likely focus on shared administrative structures and efficiencies rather than on risk-sharing. Risk-sharing could potentially lead to one state’s population effectively subsidizing another state’s population.
Read the full Urban Institute report about multi-state insurance exchanges (pdf).
Read other coverage about insurance exchanges:
– Wisconsin Shows Progress With Health Insurance Exchanges
