On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act of 2010 (ACA). One of the key components of the ACA’s health insurance reform provisions is the requirement that an American Health Benefit Exchange (Exchange) be established in each state and the District of Columbia. One of the key goals of the Exchanges is to create a more organized, competitive and affordable marketplace for health insurance where consumers will be presented with a choice of plans. Exchanges also will provide consumers with information such as benefits, quality and price; have a mechanism for enrollment in plans offered in the Exchange; and determine consumers’ eligibility for federal financial assistance for purchasing health coverage. The Exchange will be the only mechanism for low-income individuals to receive premium tax credits to purchase health insurance and reduced cost sharing.
The ACA provides states with the flexibility to decide on several aspects of the structure and administration of the Exchanges. For example, states may decide whether to establish exchanges that are statewide, regional, within the state, or combined with other state Exchanges. States also have the flexibility to decide what type of entity will administer the Exchange, and whether the risk pools for the small group (through the Small Business Health Options Program or SHOP) and individual markets will be combined or kept separate. If a state doesn’t set up its own Exchange or join a multi-state effort, the federal government will operate a Federally-faciliated Exchange for the state.
ACAP Position and Legislative Action
Because of the role that Safety Net Health Plans have played in serving vulnerable populations, they stand to have a natural and important function in the design and implementation of the Exchanges. This is especially true in the areas of coordination between the Exchange and Medicaid and CHIP, and designing products for individual consumers who receive premium tax credits, many of whom may have had multiple touch points with public health coverage programs or have had family members who are enrolled in these programs. ACAP has identified several issues critical to ensuring access to affordable quality health care coverage that will effectively meet the needs of individuals and families accessing health coverage through the new Exchanges, which are summarized by the following themes:
- Exchanges must be designed to provide options that offer the best value for low-income consumers, including individuals and families who will newly access coverage through the Exchange and those who may transition out of Medicaid in the future.
- Whether administered by a state or the U.S. Department of Health and Human Services, the Exchange's structure must be flexible enough to ensure that Safety Net Health Plans are allowed to participate if they choose. That is, federal and state regulations should not erect barriers to participation that would disproportionately impact the ability of Safety Net Health Plans in the Exchange.
- Exchanges should encourage and support continuity of coverage for individuals and families that may shift between the Exchange and other sources of coverage, such as Medicaid and CHIP.
- Exchanges should seek to adapt Medicaid and CHIP systems, processes, and policies since these are familiar to many of the consumers who will be interacting with the Exchange. Medicaid and CHIP also can provide valuable lessons as the administrative functions and systems of the Exchanges are developed.
- As the Exchanges are designed and developed for each state, there must be a robust process for stakeholder input which will allow for the design of a highly efficient Exchange that connects individuals with the most appropriate coverage.
Please visit the ACA Action Page for a complete list of all ACAP's Exchange and ACA-related initiatives.