Smart Move to Keep our Options Open

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Stacey Pogue /(512) 320-0222 x 117

May 11, 2011

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As the 2011 Legislature winds down, time is running out for Texas to pursue its surest route to a state-based health insurance exchange. A health insurance exchange is a competitive marketplace where individuals and families can purchase private health insurance starting in 2014. Exchanges are established by the Affordable Care Act (ACA or federal health reform), which lets each state choose whether to design and run its own exchange, or turn the task over to the federal government. The ACA’s timeline gives states a limited window in which to pursue a state-based exchange before the federal government assumes the responsibility. Inaction this legislative session does not guarantee that Texas will ultimately have a federal health insurance exchange, but it certainly makes that outcome much more likely.

Though an amendment by Representative Zerwas to House Bill 1951 (the Sunset bill for the Texas Department of Insurance) added on second reading yesterday gives Texas an option to create a state-based exchange instead of deferring to the federal government if state leadership decides to go that route later. This approach is a smart move for Texas. This Policy Page describes the timeline and options for creating a state-based exchange and reasons why Texas should create its own exchange.