As federal health reform legislation has stalled, health policy attention turns to the states, which have many tools to reform their health care systems. While 1115 waivers rightly get a lot of attention, because of their ability to reshape state Medicaid programs, the Affordable Care Act’s Section 1332 waivers continue to be a promising avenue for states.
Financing Shared Administrative Functions Between State-Based Marketplaces and State Medicaid Programs: Cost Allocation Methodologies
Tricia Leddy, Mark Larson, and Christian Heiss, Center for Health Care Strategies
The Affordable Care Act (ACA) provides opportunities for expanded access to health coverage through both the expansion of Medicaid and the establishment of health insurance marketplaces. State-based marketplaces (SBMs), as pathways to both public and private health coverage, are required to perform cross-program functions that support access to both qualified health plans (QHPs) available through the marketplace, as well as coverage through Medicaid. While these shared functions create an opportunity for savings through enhanced efficiency, they also require states to properly attribute funding to both through a process known as cost allocation. This issue brief, prepared by the Center for Health Care Strategies, builds on a previously released analysis of cost allocation methodologies, by providing an in-depth view of the mechanics of implementing cost allocation between Medicaid and marketplace programs.