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how the marketplace was born

On November 28, 2012, Governor Jan Brewer (R) informed federal officials that Arizona would default to a federally-facilitated health insurance exchange.  

Prior to her decision to default, the governor had established the OFFICE of HEALTH INSURANCE EXCHANGE to "organize the health insurance marketplace for easier evaluation by individuals and small businesses to acquire affordable health insurance."  While legislation establishing a state-run health insurance exchange failed in 2011, the Governor's Office and legal counsel had researched non-legislative options for establishing an exchange.  On April 24, 2010, Arizona enacted a law prohibiting plans in a state exchange from offering abortion coverage except in cases of life endangerment or severe health impairment of the pregnant woman.

Contracting with Plans:  Prior to defaulting to a federal exchange, the Department of Insurance took the lead in researching and developing the plan management, functions for the exchange, including certification of qualified health plans, quality rating systems, risk adjustment and transitional reinsurance.  Their work was informed by the health plans work group meetings.  Arizona expressed support for adopting a market facilitator approach, where by the exchange would contract with all qualified health plans meeting certain criteria.  In February 2012, the state released a Request for Proposals soliciting subcontractor assistance with exchange management functions including, plan management, plan selection, data management and reporting, consumer support services, and financial management.  

Information Technology (IT): Arizona had planned to design and build the individual and small business exchange components, upgrade its Medicaid eligibility systems, and integrate everything into one seamless system.  Arizona submitted an Advanced Planning Document which was accepted by CMS, indicating the state intends to make major Medicaid eligibility systems upgrades.  In 2011, the state released a Request for Information to identify viable available or proposed solutions for aligning its Medicaid and Children's Health Insurance Program (CHIP) enrollment and eligibility systems with an exchange as well as estimated pricing.  Arizona also participated in the "Enroll UX 2014" project, which is a public-private partnership creating design standards for exchanges that all states can use.

Essential Health Benefits (EHB):  The Affordable Care Act requires that all non-grandfathered individual and small-group plans sold in a state, including those offered through the Exchange, cover certain defined health benefits.  The Department of Insurance examined the state's EHB options and solicited subcontractors to complete an analysis on options for the final benchmark plan.  The state selected the State Employee Benefit-United Healthcare EPO with pediatric and vision coverage supplemented by the FEDVIP plans as the benchmark package.


The federal government will assume full responsibility for running a health insurance exchange in Arizona beginning in 2014.

For more information on Arizona's health insurance exchange planning, visit: