Did King v. Burwell ruling just kill state-based exchanges?

Now that the Supreme Court ruled that federal subsidies are here to stay, many states operating their own health insurance exchanges are considering switching to the federal marketplace, reported The New York Times.

"There may be a little bit of buyers' remorse going on in some state capitals right now," Sabrina Corlette, director of the Center on Health Insurance Reforms at Georgetown University, told the Times. She added that many state officials are asking: "What did we get ourselves into?"

That's largely because states underestimated how challenging and expensive it would be to build and maintain exchanges. Additionally, some officials and lawmakers didn't factor in the technical and logistical obstacles of building a website and customer service operation.

"Certainly, one of the lessons learned was that it is much more difficult than was expected," Joel Ario, former Department of Health and Human Services official and now managing director at Manatt Health Solutions, told the Times.

Several states were already considering switching to Healthcare.gov before the Supreme Court issued its opinions on King v. Burwell. Hawaii decided to shutter its state insurance exchange and move enrollees to Healthcare.gov when enrollment reopens in November, and Vermont has been mulling a shift to the federal marketplace as well, FierceHealthPayer previously reported.

Even some exchanges that have performed relatively well are facing obstacles. Covered California, for example, is suffering from financial difficulties relating to monthly fees that insurers must pay. And Washington and Minnesota, which have been operating successful exchanges, are now experiencing IT problems, the Times noted.

Pennsylvania Gov. Tom Wolf said yesterday that his state would withdraw its proposal to run its own exchange while incorporating parts of Healthcare.gov, including its website and call center. Instead, Wolf wants to keep using the federal marketplace, saying it was less expensive than running its own exchange, Healthinsurance.org reported.

What's more, almost half of all state-based exchanges are experiencing financial difficulties as the cost of running the online marketplaces grows and federal funding decreases.

To learn more:
- read The New York Times article