On May 31, the Commonwealth Fund released a brief offering state policy recommendations for establishing a health exchange based on California’s experience.  California was the first state to create its own health exchange after the approval of health reform.  In particular, the authors highlight aspects of California’s exchange that reduce adverse selection and promote cost-conscious consumer behavior.

From the report: 

On September 30, 2010, just six months after the passage of the Affordable Care Act, California became the first state in the nation to create its own insurance exchange in response to the provisions of federal health care reform. On April 20, 2011, the Board of the California Health Benefit Exchange held its first meeting. Although its fifth and final member had yet to be appointed, the board hired an interim director and outlined an ambitious process to develop a comprehensive business plan and budget for the exchange.

This accelerated timeline is consistent with California’s desire to be, in the words of the state’s Health and Human Services secretary and Exchange board chair Diana Dooley, the “lead car” in implementation of federal health care reform. Because of the speed with which it has approached this task as well as the sheer size of its coverage expansion, the decisions California has made will be influential both regionally and nationally. What transpires in the state will have implications for other states as they address difficult issues, including minimizing adverse selection, promoting cost-conscious consumer choice, and seamlessly coordinating with public programs. This brief reports on California’s decisions, evaluates the likelihood that these choices will advance the goal of providing affordable access to high-quality care, and analyzes the extent to which these decisions can serve as a blueprint for other states.

Full Report: State-Based Coverage Solutions: The California Health Benefit Exchange (PDF | 937 KB)

Commonwealth Fund. (2011). State-based coverage solutions: the California health benefit exchange. Weinberg, M. and Wellington Haase, L.