Effective regulation of health insurance underwriting and rating practices is essential to ensure availability of affordable coverage, avoid risk selection between the Exchange and the external market, and enable improvements in delivery systems. The ACA creates new standards for health insurance underwriting and rating practices. Primary responsibility for enforcing most of these standards falls to the states. While insurance regulation is not a new state function, most states will need to increase their scrutiny of insurance rates. States will also need to decide how to structure the individual and small group markets, control adverse risk selection, design reinsurance for high-risk populations, educate consumers, and develop an external review process.