Exchanges

Faced with the dual goals of preserving choice and controlling health care spending, the authors of the Affordable Care Act (ACA) created public health insurance exchanges intended to promote competition among private health plans. The notion behind these exchanges is that competition among private firms will lower costs and improve quality.

In the case of health care, this implies lower premiums (and, thus, lower government subsidies), as well as better health outcomes. In addition to public exchanges, employers are increasingly turning to exchanges set up by private firms, often referred to as private exchanges, to offer coverage to their active and retired employees.

The Exchanges area focuses on projects related to assessing and improving the choice of health plans on the public and private exchanges.

Accomplishments and Collaborations

Ongoing Project

  • Consumer Choice in Private Healthcare Exchanges. Our goals in this project are to assess how responsive beneficiaries are to price differences, and which types of beneficiaries (by age, gender and health status) are most responsive to price differences and how much inertia there is on the exchange.

Other Activities

  • In April 2015, Massachusetts Governor Charlie Baker appointed Dr. Chernew to the Massachusetts Health Connector Board of Directors. The “Connector” focuses on the growth and optimization of the state’s public exchange infrastructure, and engages dialogue about efficacy and development for the program.
  • In collaboration with the ASPE at HHS, Dr. McGuire is working on identifying problem markets (those with high and growing premiums) and approaches (such as reference pricing) to improve market functioning.
  • Collaboration with Covered California to support continued improvement of the choice environment on the exchanges.

Selected Papers and Publications

o Hsu J. The ACA and Risk Pools – Insurer Losses in the Setting of Noncompliant Plans. New England Journal of Medicine. 2016; 374:2105-2107.