State exchanges may turn to feds, other states to run their marketplaces

Money

Struggling with high costs and lower-than-expected enrollment, state-based health insurance exchanges increasingly consider turning over their operations to the feds or partnering with other states, the Associated Press reports.

Indeed, some experts believe states underestimated how challenging and expensive it would be to build and maintain exchanges. Of the 12 states and the District of Columbia that fully control their exchanges, about half of their marketplaces face financial difficulties, including losing federal funding, FierceHealthPayer previously reported.

"The viability of state health insurance exchanges has been a challenge across the country, particularly in small states, due to insufficient numbers of uninsured residents," Hawaii Gov. David Ige (D) said in a statement last month when he announced the state was turning its exchange over to the U.S. Department of Health and Human Services.

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And now that the Supreme Court ruled that federal subsides remain legal, more states will probably let the feds operate their state exchanges.

"I think you are going to see much more of a hybrid across the nation," Peter Lee, executive director of Covered California, told the AP. States are "talking a lot about shared services," he added. "It's how you get economies of scale."

For example, states could pool their resources on exchange functions such as call centers while they control their own marketing, consumer education and oversight of insurers, the AP noted. The multi-state exchange option, hidden in the Affordable Care Act, interests states hoping to reign in some of the costs associated with running their own exchanges.

Although states will likely seek a greater federal role in their exchanges over the next few years, they will eventually want to take the lead on their marketplaces so they can maintain greater control over healthcare, especially their Medicaid programs, says Jim Wadleigh, director of Connecticut's Access Health.

"Our biggest concern is that you may see many states looking to enact taxes and fees, and that makes healthcare less affordable," Justine Handelman, policy chief at the Blue Cross Blue Shield Association, told the AP.

To learn more:
- here's Ige's statement

 

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