While the exchange represents a significant new opportunity for states to improve the quality and affordability of health insurance, it is only one piece of the larger health care landscape. Public programs, including Medicaid and the Children’s Health Insurance Program (CHIP), will continue to play a significant role, and the way they interact with the exchange will be important to the success of both.
Medicaid, in particular, will see its eligibility significantly increased in 2014, the same year the state exchange will open its doors. Many of those who apply for Medicaid will not be eligible for that program, but could qualify for tax credits to buy coverage on the exchange – and vice versa, as some of those who enter the exchange might also be eligible for a public program. Further, over time consumers might move from one to the other as their income fluctuates. States that carefully address these eligibility, enrollment, and transition challenges will save money due to increased efficiency, and consumers will have an easier experience getting their coverage. Those that do not run the risk of burying the promise of health reform in confusion and red tape.
Beyond these coverage issues, the state can also take action to integrate its public programs with the exchange to achieve greater effectiveness. Some of the consumer tools that the exchange will develop could be used in public programs as well to improve the consumer experience, and aligning the quality-improving, cost-lowering policies pursued by the exchange and public programs will similarly increase the effectiveness of both.