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Centers for Medicare & Medicaid Services

Affordable Insurance Exchanges

The Affordable Care Act helps create a competitive private health insurance market through the creation of Affordable Insurance Exchanges. These State-based, competitive marketplaces, which launch in 2014, will provide millions of Americans and small businesses with “one-stop shopping” for affordable coverage. They will also provide the sole venue where Members of Congress will get their health insurance.

CCIIO has proposed rules outlining a framework that will enable States to build Affordable Insurance Exchanges. For detailed information about the Exchanges, visit

You can access the proposed rules under “Regulations and Guidance” below.

Background on Exchanges

Because they lack purchasing power and the ability to pool risk, individuals and small businesses too often pay higher insurance rates.  The law changes that by providing them with competitive, consumer-centered health insurance marketplaces to compare and buy insurance, increasing their control and choice.

In the Exchanges, Americans will also have access to a wide range of customer assistance tools – including information about prices, quality, and physician and hospital networks. The plans offered in the Exchanges will be required to provide at least a basic level of comprehensive benefits.

Insurance Costs

Competitive state Exchanges will keep prices low by:

  • Increasing competition among private insurance plans through improved comparative shopping and more informed consumers
  • Providing small businesses the same purchasing power in Exchanges as large businesses.

Additionally, the increased competition in the Exchanges--combined with provisions in the law to streamline administrative costs by standardizing forms and reducing the amount of paperwork doctors are forced to complete--will reduce average premiums by 7 to 10%, according to the Congressional Budget Office.  Provisions in the law that prohibit insurance companies from discriminating against Americans with pre-existing conditions will force insurance companies to provide high-quality benefits at a competitive price.

Early Innovators Grants 

Early Innovator Grants will be awarded to states that demonstrate leadership in developing cutting-edge, cost effective exchange plans.

Information Technology Systems 

States are developing Information Technology Systems to help identify individuals who qualify for tax credits, cost sharing reductions, Medicaid or the Children’s Health Insurance Program (CHIP).

Planning and Establishment Grants

State Planning and Establishment Grants help states establish health insurance Exchanges. 

Territory Cooperative Agreements

Territory Cooperative Agreements provide Territories with the resources to start the implementation activities needed to build a better health insurance marketplace.

Additional Resources: