The Launch of the Affordable Care Act in Selected States: State Flexibility is Leading to Very Different Outcomes ACA Implementation—Monitoring and TrackingMarch 2014John Holahan, Linda J. Blumberg, Teresa Coughlin, Brigette Courtot, Ian Hill, Rebecca Peters, Shanna Rifkin, and Margaret WilkinsonThe Urban InstituteSabrina Corlette and Kevin LuciaGeorgetown University ACA Implementation—Monitoring and Tracking: Cross-Cutting Issues 2With support from the Robert Wood Johnson Foundation (RWJF), the Urban Institute is undertaking a comprehensive monitoring and tracking project to examine the implementation and effects of the Patient Protection and Affordable Care Act (ACA) of 2010. The project began in May 2011 and will take place over several years. The Urban Institute will document changes to the implementation of national health reform in Alabama, Colorado, Illinois, Maryland, Michigan, Minnesota, New Mexico, New York, Oregon, Rhode Island, and Virginia to help states, researchers, and policy-makers learn from the process as it unfolds. This report is one of a series of papers focusing on particular implementation issues in these case study states. Cross-cutting reports and state-specific reports on case study states can be found at www.rwjf.org and www.healthpolicycenter.org. The quantitative component of the project is producing analyses of the effects of the ACA on coverage, health expenditures, affordability, access, and premiums in the states and nationally. For more information about the Robert Wood Johnson Foundation’s work on coverage, visit www.rwjf.org/coverage.INTRODUCTION The Patient Protection and Affordable Care Act (ACA) constitutes substantial reform of the US health insurance system. It includes an expansion of Medicaid eligibility to all those with incomes of up to 138 percent of the federal poverty level (FPL), regulatory reforms of private health insurance markets (particularly in the small group and nongroup markets), and financial assistance for the purchase of private insurance plans through newly established Health Insurance Marketplaces (HIMs, or Marketplaces, sometimes also referred to as Exchanges). In addition, the law requires most individuals to enroll in health insurance coverage or pay a penalty (the so-called individual mandate). It also institutes requirements for employers (recently delayed), most notably establishing financial penalties for large employers1 with workers who obtain subsidized coverage through the HIMs.While the law established federal minimum standards, the ACA left considerable room for state participation and design flexibility in implementation of its insurance market reforms and the establishment of the Marketplaces. For example, states could establish their own Marketplaces using federal funds (creating State-Based Marketplaces, or SBMs), could leave the entire responsibility for establishing the HIM to the federal government (Federally Facilitated Marketplaces, or FFMs), or could take on particular HIM responsibilities while leaving the lion’s share of their establishment to the federal government (FFM-Partnerships [FFM-Ps] or FFM-Marketplace Plan Management arrangements [FFM-MPMs]). States were expected to implement and enforce the new insurance market rules included in the law, but if they could not or would not do so, the rules would be enforced by the federal government. And, while not the original intent of the law as written, a 2012 Supreme Court decision made the ACA’s Medicaid expansion an option for states. Many other options were left to states choosing to participate within the rubric of HIM design, insurance reforms, and Medicaid implementation. As such, the design and effects of the ACA will differ across the states as a function of different policy choices made. Some states demonstrated a strong and consistent commitment to the law’s implementation, quickly pursuing options to expand coverage and improve insurance markets as much as possible. Other states—often as a result of powerful political opposition to the law in either the governor’s office, the state legislature, or both—chose to play only a limited role in implementation or no role at all. Assessment of the ACA and its potential to reduce the uninsured and to increase access and affordability to adequate insurance coverage will require drawing distinctions between outcomes in states putting maximum effort into the law’s implementation and those whose involvement is limited, reluctant, or even obstructionist. The different design and implementation decisions will inevitably result in different outcomes for states, consumers, and other stakeholders. ACA Implementation—Monitoring and Tracking: Cross-Cutting Issues 3Researchers at the Urban Institute along with colleagues at the Georgetown University’s Center on Health Insurance Reforms assessed the state of health reform implementation in eight states that exhibit varying levels of support for the law. The findings are