Medicaid's Role in the Health Benefits Exchange: A Road Map for States

On March 23, 2010, President Obama signed into law the Affordable Care Act (ACA), sweeping federal legislation designed to bring about near universal coverage and transform how health care is paid for and delivered throughout the United States. Under federal health reform, 32 million Americans are expected to gain coverage through an expansion of Medicaid to 133 percent of the Federal Poverty Level (FPL); premium subsidies for individuals with incomes between 134 percent and 400 percent of the FPL; new insurance markets – Health Benefit Exchanges – through which individuals and small businesses may compare coverage options and purchase insurance; and reforms of private health insurance. Barely a year after passage, states are crafting Exchange legislation and designing and building the systems for individuals to secure a determination of their eligibility for a subsidy and enroll in coverage. This paper examines the issues that states will confront as they consider how best to integrate Medicaid into the administration and operation of the Exchange and into the continuum of coverage in the Exchange.