Many of the Obamacare marketplaces that were set up by the states and the District of Columbia are failing financially, leaving officials considering measures that include turning over all or part of the troubled state marketplaces to the federal exchange.
Out of the 17 marketplaces set up by states, nearly half are having trouble as costs are rising for the exchanges' technology and call centers while enrollment numbers remain low, reports
The Washington Post.
Officials are looking at raising insurers' fees, joining other states to share costs, and pushing their state lawmakers to spend more money to keep the exchanges on the state, rather than the federal, level.
However, joining the federal exchanges may not be an option after this summer. The Supreme Court is weighing a
landmark case, with a decision expected by the end of June, in a challenge against consumers in the 34 states that use federal exchanges receiving subsidies to pay their healthcare premiums.
Should the court rule against the subsidies on the federal level, states that are already struggling will likely have to find another way to solve their exchanges' financial woes.
"Everyone is looking at all the options," said Jim Wadleigh, executive director of Connecticut's exchange, which is one of the more successful of the marketplaces operated on the state level.
Federal funding has also ended for states that established their own marketplaces. The states got nearly $5 billion to establish the online sites in the five years since Obamacare became law, but that federal funding ended in January, leaving states to cover their own operating costs.
Most states make money from the fees that they charge insurers, who end up passing on those costs to consumers, meaning their success depends on high numbers of people getting insurance. But sign-ups on the state level rose only 12 percent during the last open enrollment period, compared to 61 percent in the federal exchange, according to the consulting firm Avalere Health.
One of the largest costs is for call centers, where live operators sign people up. Enrollments take a long time, and contractors are paid by the minute in several states.
States also spend a great deal for technology work to correct software issues.
Officials in Minnesota and Vermont, facing high costs for technical problems in their exchanges, are considering making a switch to the federal exchanges, and in Oregon, state officials abolished the state exchange after it ended up being a gateway for the federal marketplace.
Rhode Island is considering an additional fee for health plans that could rise or lower based on the state's operating costs, and in Hawaii, the exchange needs $28 million to stay open until 2022, when it is to become self-sustaining.
Connecticut, meanwhile, is offering to sell its secrets to other marketplaces in a way, by renegotiating its own call-center contract and sharing the strategy it used with struggling states that use the same contractor.
"Basically, the exchange is teetering and the question is, 'can this be shored up?' " said Colorado Republican state Sen. Ellen Roberts, who chairs the exchange committee. Running the exchange's call center alone is projected to cost $21.3 million this year, or over $8 million more than had been previously projected.
Back in 2010, when the Affordable Care Act was approved, Democratic governors pushed for their own exchanges to show support for the law, while Republicans refused, to show their opposition, said Kaiser Family Foundation senior vice president Larry Levitt, adding that keeping them open will now depend more on money, not principle.
Officials in Vermont, Rhode Island and Connecticut are looking into banding together. Vermont's costs are projected to grow to almost $200 million by the end of this year, and that state's officials are considering a move to the federal exchanges if costs don't improve.
Maryland expects to have enough revenue to cover operations for the upcoming fiscal year that begins July 1, and in Colorado, Connecticut, Kentucky, Maryland and the District of Columbia, fees are imposed on plans sold on and off the marketplace.
But joining the federal exchange is not a simple change-of-address matter. To become compatible with the federal marketplace, states will have to spend about $10 million each, Wadleigh said.
Sandy Fitzgerald ✉
Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics.
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