Facing the future: setting up health insurance exchanges is one of the big, early tasks for lawmakers.

• Author: Brand, Rachel
• Position: HEALTH REFORM

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A da May Roberts worried each year about renewing her health insurance. She feared being told the price had doubled or the insurance company would not renew her policy.

So every fall, the Massachusetts innkeeper spent hours with insurance salespeople, reading the fine print and filling out medical forms. Then she prayed she'd be covered.

All that changed three years ago. On the first day the Massachusetts Health Connector opened, Roberts typed her name, birthday and zip code into a website. In five minutes, she had a list of 22 plans--rated gold, silver or bronze. It took her only 10 minutes to buy health insurance. Since then, her rates have dropped $300 a month, and she never fears being kicked off.

"I'm happy, happy, happy," says the 59-year-old. "The weight of uncertainty has been lifted. Massachusetts got it right."

Welcome to the future of health insurance. In three years, as many as 16 million people will buy inum through such online trading posts, and the number will swell to 31 million by 2020. Insurers won't be able to deny folks coverage because they are in poor health, and plans will be easy to compare.

But state lawmakers have lots to do before that day comes. They must decide whether to offer an exchange, who will run it, and how it will work with insurers.

Then they must launch the exchange into a fiscal environment that is anything but inviting. The overall cost of getting exchanges up and running is expected to be $4.4 billion nationwide, although some federal funds will offset the cost.

IT'S THE LAW

A core tenet of federal health care reform passed in March is this: The federal government wants more people to have health insurance.

So in 2014, the government will help 19 million people become insured for the first time. Some will qualify for subsidies, others for an expanded Medicaid program. This help is specifically for people who are unemployed, self-employed or work for companies that don't offer coverage.

At the same time, it will be against the law not to have health insurance, except in some specific cases. People who flout the law will pay a penalty that varies by income.

Nobody knows how many people will use the carrots or respond to the sticks.

"Over time, we'll build the expectation that it's part of people's personal responsibility to buy health insurance," says Kansas Insurance Commissioner Sandy Praeger.

Regardless, exchanges will play a role. "If you are going to move into a world in which people buy insurance on their own," says Jon Kingsdale, former commissioner of the Massachusetts Connector, "you need a vehicle to make it relatively easy for them to do so."

ONLINE MARKETPLACE

Exchanges are designed to make it easy to shop for and buy insurance. They're often compared to airline ticket websites such as Expedia.com. But exchanges go further.

Imagine if Expedia.com gave shoppers information on the quality of flights--their on-time...