Administrative Burden

Administrative Burden

Policymaking by Other Means

Pamela Herd, Donald P. Moynihan

Refusing to adopt the state exchanges became a way for those opposed to the ACA to express that opposition. The absence of state exchanges created complications because of the intergovernmental dynamics of Medicaid. Although Medicaid is subsidized by federal dollars, it is run primarily by state governments. Eligibility rules—and insurance regulations—are determined by the state. Thus, having states administer enrollment was consistent with established practice for Medicaid. State-run exchanges could reduce learning and compliance costs for participants by allowing for a one-stop shopping experience. The purchaser could consider private individual insurance plans, subsidies to purchase those plans, and eligibility and enrollment in Medicaid, all in a single venue. In the federal exchange, individuals would be able to buy private insurance, apply for the federal subsidy based on their income, and see whether they might qualify for Medicaid. But there was no clear plan about how Medicaid enrollment, which is administered by states and counties, would work for those using the federal exchange.

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