Realizing Health Reform's Potential: Maintaining Coverage, Affordability, and Shared Responsibility When Income and Employment Change

The Affordable Care Act builds on existing sources of public and private health insurance, while creating new health insurance exchanges and subsidies. A potential disadvantage of preserving many sources of health insurance is the likelihood of abrupt changes in coverage or financial responsibility when individual circumstances change. This brief describes four policy challenges related to such changes: adjusting premium and cost-sharing subsidies when incomes change; coordinating eligibility for premium credits, Medicaid, and the Children's Health Insurance Program; encouraging and facilitating continuous coverage; and minimizing transitions between individual and small-business exchanges. Policy recommendations to reduce uncertainty, simplify coverage decisions, and minimize insurance transitions include extending coverage to the open enrollment period at the end of the year, generous treatment of income gains in correcting premium tax credits, and unifying the small-business and individual exchanges.