by Peter J. Nelson
Center of the American Experiment
February 25, 2013
The Affordable Care Act asks states to set up insurance exchanges to “facilitate the purchase of qualified health plans.” The primary goal of an insurance exchange is to extend affordable health coverage to low-income households via Medicaid and federal premium tax credits. There are at least three key strategies to best connect low-income households with affordable coverage through a state-based exchange. First, focus the exchange services on people who qualify for Medicaid and insurance affordability programs. Second, establish a Small Business Health Option Program (SHOP) exchange to facilitate enrollment in the individual market, while maintaining the traditional small group market. Third, facilitate broad access to insurance affordability programs and high-quality consumer support services through private brokers and private exchanges.