As health care reform moves forward in the
United States, one common feature of virtually
all proposals is to expand coverage for low
income populations not through a traditional
public insurance model, but rather through a
“defined contribution exchange” mechanism.
Under this approach, low income individuals
would have a choice of a number of options for
their insurance coverage. Individuals would
receive a subsidy to purchase insurance that was
tied to the lowest-cost plan (or some index of
low-cost plans) and would pay some part of the
difference if they chose a more expensive plan