May 5 2015
by Chris Woodward
Many states operating their own health insurance exchanges are reporting financial difficulty. It's the latest black eye for ObamaCare, which turned five years old this year.
"A lot of analysts predicted that this was going to be true, including yours truly," says Robert Moffit, Ph.D., senior fellow for The Heritage Foundation 's Center for Health Policy Studies. "Back in January 2011, Heritage did an analysis of these exchanges and pointed out that the exchanges are going to impose a lot of unknown costs on consumers and the states and administrative costs on the states."
Indeed, among the financial difficulties that states are mentioning in running their own exchanges are administrative expenses.
Seventeen health insurance exchanges are being run by states and the District of Columbia. Almost half of them are having financial difficulties, according to information first published by The Washington Post. Meanwhile, enrollment numbers have not been great. As a result, some state officials are considering things like more funding and/or higher fees for insurers.
States can make a switch to the federal exchange. In fact, Oregon made the switch to Healthcare.gov in 2014 following the very first enrollment period – but one reason for that decision was Oregon's troubled health exchange website.
But Hadley Heath Manning, director of health policy at the Independent Women's Forum, predicts states will wait before making the decision to switch.
"I don't think anyone is going to budge. They're all waiting to see what the Supreme Court says inKing v. Burwell," she shares. "Because if they were to move to the federal exchange at this point, then they'd be grouping themselves with the 34 states that would be most impacted by that decision."
The question with King v. Burwell is whether the federal government can offer subsidies to people signing up for health insurance on federal and state exchanges. Plaintiffs argue the Affordable Care Act allows for subsidies only on state exchanges and claim the IRS ignored the language.