Almost half of the 17 ObamaCare state insurance exchanges are reportedly suffering financial difficulties, posing a significant challenge to state officials just five years after the passage of President Obama’s signature health care law.
The Washington Post reports that many of the marketplaces set up by the states and the District of Columbia are being hit by high costs and tepid enrollment numbers. In response, officials at state level are mulling raising fees on insurers, sharing costs with nearby states, and are calling for more money to be infused into the system.
Some officials are even considering handing over their exchanges to the federal Healthcare.gov – an exchange that has had widely reported problems of its own.
The troubling report comes at a difficult time for the law. The Supreme Court is considering a challenge to ObamaCare tax subsidies that, if struck down, could affect as many as 8 million Americans.
The justices are to decide whether the law makes people in all 50 states eligible for federal tax subsidies -- or just those who live in states that created their own health insurance marketplaces. This question matters because roughly three dozen states opted against their own marketplace, or exchange, and instead rely on the U.S. Health and Human Services Department's Healthcare.gov. If the court rules against the Obama administration, insurance subsidies for people in those states would be in jeopardy.
Obama administration officials have suggested they have no alternative plan if the subsidies are struck down, while some Republican lawmakers have begun crafting their own alternatives.
If the court upholds subsidies for the federal exchange, then it may accelerate the transfer process to Healthcare.gov from states that have struggling exchanges.
The Post reports that sign-ups for the state marketplace rose only 12 percent in the recent enrollment period, compared to a 61 percent increase for the federal exchange. For most exchanges, income comes from fees imposed on insurers, which are determined by the number of sign-ups. So large enrollment is critical if an exchange is going to be financially viable.
“They are literally looking at huge gaps, and they are not sure how they are going to get through the year,” Caroline F. Pearson, a senior vice president at Avalere Health, told The Post.
In March, Oregon lawmakers abolished the state exchange after it had been plagued with financial and technical difficulties.
The president’s signature law still remains highly controversial. A recent Fox News Poll found that 42 percent of respondents said that they are worse off because of ObamaCare, with only 33 percent saying the health care situation was better since the law was passed in 2010.