The Affordable Care Act allows for multiple states to jointly operate health exchanges. Linda J. Blumberg, writing for for the Urban Institute, says there are four reasons why states should take this route:

1. Administrative economies of scale could be significant.

Exchanges will need to develop subsidy administration and eligibility protocols, consumer ombudsman services, plan comparison materials and other new programs and functions in order to organize health insurance markets and make them operate more competitively. It might make sense, for example, for several small states to join together and undertake these tasks in common. Within multi-state exchanges, however, it would be important for each state’s department of insurance to retain its regulatory jurisdiction and authority.

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