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Health Insurance Exchanges: How Indiana Got Here

The federal government is rolling out one of the key provisions of the Affordable Care Act this week, as the mandated health insurance exchanges open their digital doors Oct. 1.

All this week we’ll be walking through some of the practical implications of Indiana’s exchange.

But first, we look back at the Hoosier State’s political road to a federally-run exchange.


The Affordable Care Act mandated the creation of health insurance exchanges—essentially, marketplaces for insurers and consumers.

States had a choice to make: run the exchange themselves, or let the federal government run them.

Indiana missed the initial deadlines to make a decision in 2012, but Andy Downs from the Mike Downs Center for Indiana Politics says the reason makes sense.

"Somewhat rightly so, Gov. Daniels said, 'This is a pretty big decision. This should be left to the new governor. The new governor's going to have to deal with this.'"

Downs says the exchange issue presented a particularly difficult decision to Pence and other Republicans at the statehouse who already favored the state’s own Healthy Indiana Plan, didn’t like the ACA, and would prefer more localized control in the issue.

"Then the option is, change something we like we think works, or accept something from the federal government," Downs said. "In either instance, the federal government is forcing something upon us. So for a state that is not particularly fond of federal intrusion into our lives, that's a very difficult decision to be in."

Pence ultimately opted to let the federal government run the exchange at the start, because he said the estimated cost to run it outweighed any benefits.

The Associated Press estimates about 500,000 Indiana residents will be eligible to use the exchanges when they open Oct. 1.

Of course, Oct. 1 isn’t the end of the road, but the next step in a long negotiation between the state and federal governments which promises to continue.