HEALTH PROVISIONS · 6 MIN READ
Marketplaces, Subsidy Machinery, and Public Health Programs
ACA exchanges come in three governance flavors: a State-Based Marketplace (SBM) run by the state (which must demonstrate operational readiness roughly one year before its first coverage effective date), a State Partnership Marketplace splitting functions, and the Federally-Facilitated Marketplace (Healthcare.gov) that HHS must establish and operate wherever a state declines — plus a SHOP marketplace for small businesses. Consumer assisters are typed by funding and duty: Navigators receive federal grants; Certified Application Counselors complete training and certification through designated organizations (community health centers, hospitals) and assist for free but without grant funding; licensed producers may also enroll consumers. Eligibility for premium tax credits and cost-sharing reduction subsidies is verified through the Federal Data Services Hub, an electronic gateway querying the IRS, SSA, DHS, and other agencies. Plans electing to cover non-Hyde abortion services must collect a separate premium payment and segregate those funds from federal subsidy dollars. The ACA also built premium-stabilization machinery — the 'three Rs.' Risk adjustment permanently transfers funds from plans with healthier enrollees to plans with sicker ones. The transitional reinsurance program paid issuers for high-cost enrollees but operated only for benefit years 2014 through 2016, and the risk corridor program likewise sunset. States can go their own way through Section 1332 State Innovation Waivers (with federal pre-approval) or a Section 1331 Basic Health Program covering residents between 133% and 200% of the federal poverty level, funded by 95% of the subsidies those enrollees would have received. Employer obligations round out the framework: applicable large employers face shared responsibility penalties for failing to offer affordable coverage, enforced through federal information reporting. Public programs sit beneath the marketplace layer. ACA Medicaid expansion covers adults up to 138% of the federal poverty level in adopting states. CHIP gives states enhanced federal matching funds — above the regular Medicaid match — to cover uninsured children in families above Medicaid limits, generally up to 200% or more of poverty. On the Medicare side, Part A covers skilled nursing facility care up to 100 days per benefit period (after a qualifying 3-day inpatient stay), with no coinsurance for days 1-20 and daily coinsurance ($209.50 in 2025) for days 21-100, plus the hospice benefit; and the Inflation Reduction Act capped Part D out-of-pocket drug costs at $2,000 (2025) with smoothing of the catastrophic phase.
Key rules
If a state declines to run an exchange, HHS operates the FFM in that state.
The federal fallback is mandatory — Healthcare.gov becomes the state's marketplace; SBM approval requires demonstrated readiness about a year before coverage begins.
Why the exam cares: The federal-fallback structure is the tested core of marketplace governance.
Navigators are federally grant-funded; Certified Application Counselors are not.
CACs must complete training, be certified through a designated organization, and help consumers free of charge; both assist with applications but neither replaces a licensed producer.
Why the exam cares: Distinguishing assister types by funding source and certification path is a recurring question.
Subsidy eligibility is verified through the federal Data Services Hub.
The hub lets exchanges electronically confirm income, citizenship, and lawful presence with the IRS, SSA, DHS, and other agencies before advancing premium tax credits.
Why the exam cares: The exam asks what mechanism verifies applications — the answer is the electronic data hub, not self-attestation.
Of the three Rs, only risk adjustment is permanent.
Reinsurance ran for benefit years 2014-2016 and risk corridors sunset; risk adjustment continues moving money from low-risk to high-risk plans.
Why the exam cares: Which stabilization program survived is a clean factual test point.
Medicaid expansion reaches 138% FPL; CHIP covers kids above Medicaid limits.
Expansion states cover adults to 138% of poverty; CHIP pays states an enhanced match to cover uninsured children in families generally up to 200%+ FPL, and the Basic Health Program option serves the 133-200% band.
Why the exam cares: Matching each program to its income band is the standard public-program question.
Numbers to memorize
- 138% FPL — Medicaid expansion income threshold for adults
- 133%–200% FPL — Basic Health Program eligible population; funded at 95% of forgone subsidies
- 200%+ FPL — typical CHIP income reach for uninsured children, at an enhanced federal match
- 2014–2016 — the only benefit years the ACA transitional reinsurance program operated
- 100 days per benefit period — Medicare Part A SNF limit; days 1–20 no coinsurance, $209.50/day (2025) for days 21–100
- $2,000 (2025) — Medicare Part D annual out-of-pocket cap under the Inflation Reduction Act
Common traps
- Confusing Navigators with Certified Application Counselors — Navigators carry federal grants; CACs are trained and certified but unfunded, and both must assist without charge.
- Treating all three premium-stabilization programs as ongoing — reinsurance and risk corridors were transitional; only risk adjustment is permanent.
- Forgetting the SNF qualifying rules — Part A SNF coverage needs a prior 3-day inpatient hospital stay and provides at most 100 days per benefit period, not unlimited care.
- Mixing up the income bands — 138% FPL is Medicaid expansion, 133-200% is the Basic Health Program, and CHIP reaches children in families above Medicaid limits.
Draw the income ladder once — Medicaid to 138%, BHP 133-200%, CHIP for kids above Medicaid, subsidized QHPs above that — and every program-eligibility question becomes a lookup.
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