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The Potential for a Hybrid Exchange

The federal rules on the Exchange allow state Exchanges and the federal government to contract with each other to operate aspects of the Exchange on a permanent or interim transitional basis. These are known as Partnership Exchanges.

Given the short time frame to have an operational IT system for Exchange, CHIP and Medicaid eligibles, and California’s progress to date, a short term Partnership Exchange with HHS may be an attractive option that the California Exchange Board is actively considering.

If California opts for a Partnership Exchange while the state IT system is being finalized, who does what? Under the federal rules, the state Exchange could perform or contract with the federal government for: Option 1 – plan management functions, Option 2 – selected consumer assistance functions, or Option 3 — plan management and selected consumer assistance. HHS will have oversight of the state’s performance. These are the minimum federal rules governing partnership exchanges.   Of these, option 2 may make the most sense (see chart below)


Federal Government

State Government

Plan selection

Plan selection, collection of plan rate and benefit package information, plan monitoring and oversight.

State collects standardized data and helps select plans.

Consumer assistance

Call center operations. Website management. Written correspondence with consumers to support eligibility and enrollment.

Outreach and education. Navigators.
In person assistance.

Our preference is that the Exchange’s IT system is speedily contracted and adopted with the state Exchange delivering all the consumer assistance functions, rather than this bifurcated Partnership option or any other fragmented eligibility system.

It is important that we all keep in mind this division of state-federal responsibilities, in the event the state’s IT system falls behind schedule and the Exchange therefore chooses this Partnership option.

Resources for those interested: 45 CFR Parts 155, 156 and 157; CMS, Exchanges: a Proposed Federal State Partnership (Sept. 19-20, 2011) and CMS, State Exchange Implementation Questions and Answers (Nov. 29, 2011) 

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