“All things are difficult before they are easy.” – Thomas Fuller

Change can be difficult, but sometimes, it’s also necessary for making things better – and easier – in the long run. For example, many of the states that previously changed health insurance exchange models from HealthCare.gov (also known as the federally facilitated exchange or FFE) to a more autonomous state-based exchange (SBE) have seen remarkable enrollment growth, with some SBEs outpacing FFE growth by more than double last year. SBEs also offer many advantages, especially in terms of adaptability, cost efficiency, and the ability to support state-specific innovations and customizations. Despite this, the majority of states still operate through the FFE.

At the beginning of 2025, 28 states were operating through HealthCare.gov, while only 20 were operating a full SBE, and three were operating a model somewhere in between (SBEs using the federal platform, or SBE-FPs). However, the number of SBE states is steadily growing, with indicating interest in pursuing a full SBE in the near future.

Becoming a State-Based Exchange After the 2025 Rule Change

As data continues to reveal both the immediate and long-term advantages of the SBE model, the number of states pursuing an SBE is only likely to increase. And while choosing the right exchange model and change timeline for any state involves many unique factors, at GetInsured, we want to make sure that concerns and questions about the change process itself aren’t holding states back from pursuing the model or variation of a model that is right for them. We also want to address questions states may have about recent adjustments to the change process formalized by the new Department of Health and Human Services (HHS) Notice of Benefits and Payment Parameters for 2025 final rule.

So, in this post, we break down the current steps required to transition from the federal exchange to an SBE-FP and/or full SBE in light of the . We also share some resources to assist states in those transitions. And because our experience has taught us that vendor changes can be just as impactful as model changes in the health exchange world, we also share some insight on the process of changing SBE vendors.

“To date, Georgia (with a current enrollment in excess of 1.3 million) is the largest FFE-to-SBE transition undertaken by any state. That volume, in addition to Georgia’s unique SBE model, made transition an unusually high-risk proposition. Now that we are in open enrollment, I am utterly convinced that only GetInsured could have accomplished this feat. GetInsured possesses the people, technology, and operational expertise needed for a successful launch. I recommend them fully and without hesitation.”

–Cheryl Gardner, Executive Director, Georgia Access

Changing Models: FFE to SBE-FP to SBE

Before the recent HHS 2025 rule, states could elect to transition directly from the federal exchange to a full SBE. With the new rule, states must embrace a more gradual change, where they start by assuming responsibility for some FFE operations – such as plan management, consumer assistance, and small business health options program (SHOP) functions – but still operate on the federal platform as an SBE-FP for at least one year before shifting to a full SBE. As such, any state wishing to pursue full SBE status in 2025 or beyond must start by achieving SBE-FP status; we call this Phase A.

Phase A: FFE to SBE

Step 1: Legal Authority, Letter of Intent, and Provider Selection Process

The first step in transitioning from the FFE to an SBE-FP includes three requirements that, in practice, tend to vary in terms of their order and are often pursued consecutively. The first requirement is achieving legal authority to operate an SBE-FP in the state, which typically involves prior or ongoing state legislation.

The second requirement is conveying the state’s intent to change models to the Department of Human Services, Center for Medicare & Medicaid Services (CMS) through a Declaration of Intent Letter signed by the governor. CMS recommends sending this letter at least nine months before the SBE-FP’s first OEP. The Intent Letter should include:

  • The exchange model sought out (in this case, an SBE-FP)
  • The first year of OEP the state plans to operate as that model
  • The point of contact with signature authority for the exchange
  • Acknowledgment that this letter may be amended by CMS and the state as needed

The third requirement is deciding if the state would like to contract with a service provider for the model transition and responsibilities assumed. If so, states should identify what they’d like to know about providers and their services and release a detailed request for information (RFI) and/or request for proposals (RFP). States then receive proposals and can assess and select their partner(s). This selection doesn’t need to be complete until near the end of Phase A: Step 3, but because of the important and time-consuming nature of this process, we recommend states begin it early on in the SBE-FP transition.

Step 2: Blueprint Application

States must also complete an Exchange Blueprint Application and submit it to CMS. The Blueprint Application can be submitted along with the Letter of Intent but is not required to be. If it’s not submitted with the Letter of Intent, CMS will reach out and provide the state with technical assistance for the completion of the Blueprint following receipt of the Letter. We believe this advice from CMS is invaluable. The SBE-FP Blueprint requires:

  • Part A: Application Attestation. The state must attest to the accuracy of the information provided.
  • Part B: Exchange Declaration. The state must provide an overview of the key exchange options within the model that the state has chosen.
  • Part D: SBE-FP Blueprint Application. The state must attest to having completed or expecting to complete all required SBE-FP activities on time.

Part D is also where detailed plans are shared (e.g., funding, staffing). CMS recommends submitting the Blueprint Application at least three months prior to an SBE-FP’s first OEP.

Step 3: CMS Conditional Approval, Monitoring, and Federal Platform Agreement

Based on the Letter and Blueprint Application, the CMS Center for Consumer Information and Insurance Oversight (CCIIO) decides whether or not to grant the SBE-FP conditional approval. If granted, SBE-FP states must also execute a Federal Platform Agreement with CMS before their first OEP. While states aren’t required to have SBE-FP service providers chosen before receiving conditional approval, they must have a viable plan to complete all tasks.

Phase B: Operate as an SBE-FP for One Year

After states begin operating as an SBE-FP, they must successfully operate as an SBE-FP for one year before beginning the transition to a full SBE. CMS mandated this transition time to allow the exchange, its partners, and its customers to more smoothly and easily adjust to a new system. States should remain in close communication with CMS during this time.

Phase C: SBE-FP to Full SBE

After successfully operating as an SBE-FP for a year, states may begin applying for and setting up a full SBE. This phase mirrors Phase A, with a few minor changes:

  • Step 1: Legal Authority, Letter of Intent, and Provider Selection Process

States must have legal authority to operate an SBE, submit an SBE Letter of Intent to CMS, and begin selecting an SBE provider(s). CMS recommends sending the SBE Letter at least 21 months before the SBE’s first OEP. The provider selection process is also more in depth in this phase, as states shift away from the HealthCare.gov platform, which generally requires contracting with a technology provider.

  • Step 2: Blueprint Application

States pursuing a full SBE fill out parts A and B of the Blueprint Application, but instead of Part D (required for the SBE-FP transition), they fill out Part C, which requires attesting to having completed or expecting to complete all SBE activities on time. CMS recommends submitting the SBE Blueprint Application no less than 15 months prior to the SBE’s first OEP.

  • Step 3: CMS Conditional Approval and Monitoring

CMS will decide whether to issue the SBE conditional approval and will assist with monitoring and readiness reviews for the full SBE. The federal platform agreement is not required for full SBEs.

Note: Some states transitioned from the FFE to an SBE-FP before the new CMS 2025 rule was released. For these SBE-FP states, the process of transitioning to a full SBE similarly requires the completion of Phase C above.

Vendor Change: One SBE Vendor to Another

A lot goes into selecting an SBE technology and/or service provider, and sometimes, states may find that a new or additional partner is needed to continue meeting goals. In such cases, states may decide to reissue an RFP and change or add vendors. If this happens, the state must keep CMS updated, but the degree of documentation required depends on the extent of SBE changes pursued along with vendor changes. If substantive operational changes are pursued, sending an updated Letter of Intent and Blueprint Application is advised. If no substantive changes are made to exchange functionality, updates can be submitted in an amended Blueprint Application without resending the Letter of Intent.

GetInsured has been on both sides of this vendor change experience. We’ve learned a lot through these projects, but the most important is this: it takes coordination and transparency across all partners – and a good relationship with CMS doesn’t hurt.

CMS Resources

Regardless of where states are in their health exchange journey, change is often necessary for improvement. To further demystify the process of transitioning to an SBE or changing SBE vendors, GetInsured has compiled a concise catalog of resources for states pursuing SBE transitions, which includes a sample transition timeline; current SBE platforms for reference; recent legislative actions influencing SBEs; guidance on the Affordable Care Act (ACA) and 1332 waivers; sample Letters of Intent, RFIs, and RFPs; market studies and webinars; and more.

To Learn More: