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Building a Relationship between Medicaid, the Exchange and the Individual Insurance Market

By: Sara Rosenbaum and Trish Riley
Published: January 2012

Summary: This report offers states valuable insight on how to coordinate Medicaid and health insurance Exchange markets – an option that could increase the efficiency and effectiveness of the Affordable Care Act (ACA). The ACA, which authorized the creation of Exchanges, also calls for a Medicaid expansion that will bring an estimated 16 million newly eligible enrollees into the program by 2019, according to independent budget experts.

Because many of the newly eligible will switch between Medicaid eligibility and receiving tax subsidies through Exchanges, it is essential that the two work together to ensure continuity of coverage so individuals and families don’t fall through the cracks of the health care system. This report addresses key areas where states can focus their efforts to promote continuity of coverage, including:

  • establishing a joint strategy to align health plan policies across markets;
  • aligning the eligibility determination and redetermination process; and 
  • coordinating benefit design across multiple markets.

Building a Relationship between Medicaid, the Exchange and the Individual Insurance Market also considers issues not included in regulations and offers recommendations on how states can achieve policy objectives, such as incentivizing cross-market participation.

The new report, part of a NASI project funded by the Robert Wood Johnson Foundation (RWJF), is intended to help guides states through the web of federal regulations, rules and guidance to identify areas for Medicaid/Exchange collaboration. Related products include a toolkit offering legislative language for policymakers implementing Exchanges and issue briefs on Exchange governance, active purchasing and federally-facilitated Exchanges.