As the Affordable Care Act is likely to persist, we should shift our attention toward actually making it work. However, this may be even more challenging than overcoming the initial political opposition. One of the most daunting problems is to make fifty-one insurance exchanges (marketplaces)1 across the country into viable, self-sufficient, and effective entities. Consumer demographics pose a significant challenge to these marketplaces, one that may lead to their demise. Ultimately, it may be prudent to continue high-risk pools as a supplement to marketplaces in order to offer lower premiums in the marketplaces and provide an opportunity for learning. This strategy could be made acceptable to both Republicans and Democrats.
The original terminology used by the Affordable Care Act is “health insurance exchanges.” However, in January 2013, citing concerns for non-English speakers, the Obama administration officially decided to rebrand the exchanges as “health insurance marketplaces.” I will follow the new terminology in this paper.
Ironically, the approach offered by Arkansas which seeks to expand its Medicaid program through premium support for insurance marketplaces may help to improve the conditions of insurance pools.
Moreover, the Obama Administration recently decided not to enforce the employer mandate at least until 2015.
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