The Affordable Care Act allows for multiple states to jointlyoperate health exchanges. Linda J. Blumberg, writing for forthe Urban Institute, says there are four reasons why states shouldtake this route:

1. Administrative economies of scale could besignificant.

Exchanges will need to develop subsidy administration andeligibility protocols, consumer ombudsman services, plan comparisonmaterials and other new programs and functions in order to organizehealth insurance markets and make them operate more competitively.It might make sense, for example, for several small states to jointogether and undertake these tasks in common. Within multi-stateexchanges, however, it would be important for each state’sdepartment of insurance to retain its regulatory jurisdiction andauthority.

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