Hawaii has started a formal effort to organize a PPACA exchange. (AP Photo/Ronen Zilberman)

HONOLULU (AP) — Gov. Neil Abercrombie says Hawaii is the first state to declare its intent to develop a state-based insurance exchange.

The Patient Protection and Affordable Care Act of 2010 (PPACA) calls for states to work with the federal government to set up exchanges, or Web-based insurance supermarkets, by 2014. Consumers and small businesses are supposed to use new federal tax subsidies to coverage through the exchanges.

The U.S. Department of Health and Human Services (HHS) says it will let states choose how to design their exchanges.

The governor said Wednesday he formally declared Hawaii’s intention earlier this month in a letter to the HHS Center for Consumer Information and Insurance Oversight (CCIIO).

Hawaii will call the exchange the Hawaii Health Connector, Abercrombie says.

The entity running the connector will be a private, non-profit corporation. The quasi-governmental agency established by state law last year.

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