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
    healthcare cybersecurity
    4 Helpful Tips on How to Protect Your Medical Practice Against Cyber Attacks
    October 24, 2021
    Health Check Diagnosis Medical Condition Analysis Concept
    6 Health Woes With Online Remedies
    January 19, 2022
    Eight Things Men Should Know About the Male Menopause
    Eight Things Men Should Know About the Male Menopause
    April 24, 2022
    Latest News
    Beyond Nutrition: Everyday Foods That Support Whole-Body Health
    June 15, 2025
    The Wide-Ranging Benefits of Magnesium Supplements
    June 11, 2025
    The Best Home Remedies for Migraines
    June 5, 2025
    The Hidden Impact Of Stress On Your Body’s Alignment And Balance
    May 22, 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
    healthy nursing school habits
    Healthy Habits for Nursing Student Nursing School Students
    May 24, 2024
    High Deductables
    High-Deductible Insurance and Rising Bad Debt
    July 24, 2015
    How People Are Taking Advantage of Health Deals in the Recent Recession
    February 5, 2021
    Latest News
    Top HIPAA-Compliant Messaging Apps for Healthcare Teams
    June 25, 2025
    When Healthcare Ends, the Legal Process Begins: What Families Should Know About Probate and Medical Estates
    June 20, 2025
    Preventing Contamination In Healthcare Facilities Starts With Hygiene
    June 15, 2025
    Strengthening Healthcare Systems Through Clinical and Administrative Career Development
    June 13, 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
Last updated: September 22, 2017 9:35 pm
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

Medical Board Disciplinary Actions May Argue Against National Telehealth License
2011 Cost of Long-Term Care Study Releases Findings
Yellow Fever Outbreak In Sudan Confirmed By WHO, Including 14 Deaths; Vaccination Campaign To Continue
How A Doctor’s Perception of Patients Can Impact Patient Satisfaction
Has the iPad Replaced the Stethoscope?
TAGGED:health care reforminsurance exchange
Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

women dental care
What Is a Smile Makeover and How Much Does It Cost?
Dental health
June 30, 2025
HIPAA-Compliant Messaging Apps
Top HIPAA-Compliant Messaging Apps for Healthcare Teams
Global Healthcare Policy & Law Technology
June 25, 2025
recovering from injury
Rebuilding After Injury: Path to Physical and Emotional Recovery
News
June 22, 2025
scientist using microscope
When Healthcare Ends, the Legal Process Begins: What Families Should Know About Probate and Medical Estates
Global Healthcare
June 18, 2025

You Might also Like

meaningful use penalties
BusinessFinanceHospital AdministrationMedical RecordsPolicy & Law

Avoiding Meaningful Use Penalties

January 27, 2015

Pfizer Has a New Sales Strategy–Will Be Selling Lipitor at Generic Prices When Patent Runs Out

November 22, 2011
Image
BusinessHospital Administration

Medical Director: Characteristics of Success

April 14, 2013

Why Doctors Tend to Overtreat

June 14, 2012
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?