By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
    Health
    Healthcare organizations are operating on slimmer profit margins than ever. One report in August showed that they are even lower than the beginning of the…
    Show More
    Top News
    An Expert’s Guide To Building and Improving Endurance
    June 30, 2022
    medical assistants
    What Do Medical Assistants Do On a Day to Day Basis?
    April 5, 2022
    superfoods to help with prostate health
    10 Healthy Foods That Can Help Protect Your Prostate
    August 29, 2022
    Latest News
    5 Steps to a Promising Career as a Healthcare Administrator
    August 3, 2025
    Why Custom Telemedicine Apps Outperform Off‑the‑Shelf Solutions
    July 20, 2025
    How Probate Planning Shapes the Future of Your Estate and Family Care
    July 17, 2025
    Beyond Nutrition: Everyday Foods That Support Whole-Body Health
    June 15, 2025
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
    Policy and Law
    Get the latest updates about Insurance policies and Laws in the Healthcare industry for different geographical locations.
    Show More
    Top News
    healthcare cost crisis
    What If the Health Care Cost Crisis Solves Itself?
    May 11, 2013
    Do You Need Life Insurance? What Does It Cover?
    December 23, 2022
    HIE metal plans
    The Four “Metal Plans” of Health Insurance Exchanges
    May 28, 2013
    Latest News
    How IT and Marketing Teams Can Collaborate to Protect Patient Trust
    July 17, 2025
    How Health Choices and Legal Actions Intersect After an Injury
    July 17, 2025
    How communities and healthcare providers can address slip and fall injuries with legal awareness
    July 17, 2025
    Let Your Lawyer Handle the Work Before You Pay Medical Costs
    July 6, 2025
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: How to Design a Health Insurance Exchange
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Policy & Law > Health Reform > How to Design a Health Insurance Exchange
BusinessHealth ReformPolicy & Law

How to Design a Health Insurance Exchange

JasonShafrin
JasonShafrin
Share
5 Min Read
SHARE

Section 1311 of the ACA requires a state to establish an Health Insurance Exchanges for the individual and small group market. How will states actually implement these Exchanges? A brief from the National Academy of Social Insurance reviews some of the program parameters which States will have to establish. What type of entity will the exchange be?

  1. Option 1: Establish the Exchange within an existing executive branch agency, either as part of the Governor’s cabinet or subordinate to a cabinet-level agency.
  2. Option 2: Create an Exchange as an independent executive branch agency with its own governing board, as was done in Massachusetts and more recently in California.
  3. Option 3: Establish an Exchange as a nonprofit entity, separate from state government.

Not any insurance plan can be sold in the Exchange. “The ACA requires that health plans sold in the Exchange meet certain criteria, including marketing, network adequacy, accreditation, and quality improvement requirements. However, the ACA does not preclude a state from adopting additional standards for qualified health plans.” Individuals with sufficiently low income will receive a subsidy to purchase health plans through the exchange. Although subsidies are received as income tax credits, low-income individuals can receive these credits in advance if their prior year income is low income. People who are ineligible due to high levels of income from previous years will only receive the subsidies as part of their tax return. On the other hand, people who were poor in previous years and eligible for subsidies could in fact be ineligible if their income rises (this is the subject of a working paper by John Graves). In these cases, the Exchange must develop a procedure to recoup the money from ex post ineligible individuals. Is there a problem with adverse selection? The answer is yes in the following three cases:

  • Guaranteed Issue would eliminate medical underwriting,
  • Marketing practices may target healthier individuals,
  • Products offered outside the exchange could be less comprehensive and also lower cost, and thus attract healthier workers.

To fight this problem, the ACA includes provisions such as temporary federal reinsurance and risk corridor programs, market-wide risk pooling, and market-wide state risk adjustment What consumer protections does the ACA mandate? First, there will likely be brokers and agents who provide services to help consumers pick plans. In addition, Exchanges must establish a Navigator program, awarding grants to eligible entities to carry out education, enrollment and information dissemination activities. To further protect consumers, products offered in the Exchange must be licensed by state insurance regulators. There are three options for Exchanges to set up a system for State Insurance regulation of Exchange health plans.

  • Place all licensure and solvency requirements on the State Regulators,
  • Split the licensure load between State Insurance regulators and the Exchange.
  • Have insurance regulators ensure that plans meet licensure and solvency requirements (as they do now), but the Exchange would determine whether a plan meets all other ACA and Exchange requirements

Medicaid and the Exchange How different will Medicaid and Exchange regulation be when Medicaid programs contract with HMOs? The ACA aims to harmonize the two regulation schemes. In fact, ACA includes provisions recommending common health plan certification standards on matters such as provider networks, coverage terms, and quality performance standards in order to promote health plan participation in both the Medicaid and Exchange markets. “Finally, because recoupment of advance premium tax credits is anticipated in cases in which families undergo a change in income that affects the size of the credit to which they are entitled, the NASI options include provisions for the Exchange to assist consumers in reporting income changes that might affect the amount of subsidy, as well as in qualifying for any “safe harbor” against federal recoupment that might ultimately be recognized in federal rules.”

More Read

E-patients – Engaged, Empowered, and Enabled : One Patient’s Story
The Meaning and Depth of the Primary Care Crisis
Socialcam: Mobile Video Sharing Made Easy
Accountable Care and HealthIT Strategies Summit 2015: Still early days
Down, Down, Down: Avoidable Errors, Uninsurance, Cost Inflation
TAGGED:health care reforminsurance exchange
Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

technology in medical research
The Tools Helping Medical Researchers See the Full Picture
News Technology
August 3, 2025
5 Steps to a Promising Career as a Healthcare Administrator
5 Steps to a Promising Career as a Healthcare Administrator
Health
July 31, 2025
holistic dental
Holistic Dentist Services Are Natural and Safe
Dental health Specialties
July 28, 2025
botox certification
Help Improve People’s Skin Health Via Botox Certification
Skin Specialties
July 22, 2025

You Might also Like

workplace injuries
Policy & LawWellness

How Workplace Injuries Make the Lives of Low-Wage Workers Miserable

February 15, 2013
Image
Policy & Law

Delaying the “Employer Mandate”

July 5, 2013

IPAB: Fix It, Don’t Repeal It

August 9, 2011
technology innovation in healthcare
Global HealthcareTechnology

5 Ways New Technology is Revolutionizing Health

December 22, 2022
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?