Gloom & doom roundup: State exchanges at risk in 6 states (& why this could be good news)

The impending King v. Burwell Supreme Court decision will cast an even larger shadow over the ACA over the next 2 months (the decision is expected to be announced in June), as exchanges in 6 of the 14 states running their own (State-Based Marketplaces, or SBMs) are at risk of either being abandoned, dissolved or otherwise moved over to the federally-run Healthcare.Gov exchange:

The federal government is threatening to take over Hawaii's health insurance exchange within months and has restricted grant money to support operations of the Hawaii Health Connector.

Jeff Kissel, the Connector's executive director, told lawmakers at a briefing Thursday that if the exchange created by the Affordable Care Act does not get state funding soon, the federal government will abolish Hawaii's marketplace and run it directly.

Lt. Gov. Phil Scott led a mini fact-finding mission to Rhode Island on Monday to learn more about components of the Connecticut health care exchange that could help Vermont save money.

The cost of fixing the dysfunctional Vermont Health Connect website will be roughly $200 million, and maintaining the state’s health care exchange on an annual basis will be about $51 million a year.

Gov. Peter Shumlin last month said he will pull the plug on the customized website if contractors can’t develop proper functionality for the site with deadlines at the end of May and in October. Since then, various alternatives have been floated, including moving the state’s system to the federal exchange.

(Yes, Nevada shifted the actual technical enrollment platform back-end of their exchange over to already last year, but the state-run exchange itself is still operational (support, marketing and so forth)

Critics pointed to the major technical problems in the first few months of the program that prompted the state to prematurely cancel its $75 million agreement with contractor Xerox last year. Nevada then shifted from a state-run exchange to a federally supported exchange that uses the technical infrastructure of the federal HealthCare.Gov website, while the state is responsible for promoting the program to Nevadans and offering enrollment assistance.

Jones argued that with the shift, the state’s involvement is duplicative.

“We’re trying to get the state out of the business of what the federal government is already doing,” he said.

Others countered that the state exchange is hitting its stride. Nearly 74,000 Nevadans had purchased an insurance plan through the federal marketplace by end of the enrollment period that wrapped up in February - double the number that enrolled in the first go-round.

(I noted this development yesterday but it really belongs in this state roundup)

The New Mexico Health Insurance Exchange board has decided to drop plans for building a state website for individual consumers and instead will continue using the federal website.

Forging ahead with the technical work for a wholly state-based operation would be more costly and would not provide the same level of customer support as the federal site is able to deliver, said health exchange CEO Amy Dowd.

Currently, 13 states and the District of Columbia have state-run exchanges. New Mexico has a hybrid system in which the state-operated website is used only for small businesses seeking to purchase health insurance. For individuals, the state site acts as a portal to the federal website.

(Again, I noted this story yesterday but am re-linking it here as well)

Not that Rhode Island has been immune from the mixed emotions surrounding Obamacare; a significant number of state lawmakers, up to and including Democratic House Speaker Nicholas Mattiello, have questioned whether the state should bother keeping (and paying for) HealthSource RI rather than default back to But the Raimondo administration has come down firmly in favor of retaining HealthSource RI.

Neither option is free.

Gov. Mark Dayton says Republican lawmakers pushing major changes to the state’s health insurance exchange should look before they leap.

That’s why the Democratic governor has proposed creating a task force to study the future of MNsure and health care in Minnesota. Dayton included $500,000 for that study in his revised budget unveiled Tuesday.

The governor first made the suggestion in a letter to legislative leaders earlier this week. Some Republicans say that’s an admission that MNsure has been a bust.

Dayton says that’s not the case.

Yup, there's no denying that all of this sounds like a whole big bag of hurt. Installation, configuration, maintenance and improvement of technical infrastructure costs money, time and know-how.

The funny thing is, if the King v. Burwell plaintiffs are shot down and if Healthcare.Gov ends up in the free and clear to continue operations including providing the federal tax credits, I, for one, would have no problem with some or all of the state-based exchanges making the move to

It's certainly more fiscally efficient ( has cost somewhere around $250-$300 per enrollee to date, as opposed to the several thousand dollars per enrollee that most of the state exchanges are costing....or, to use an extreme case, the $57,000 per person that Marco Rubio's Republican "Anti-Obamacare" Brainchild, "Florida Health Choices" has cost to date).

The main advantage of running their own exchange, aside from the King v. Burwell Sword of Damocles hanging over their heads, is that SBMs have more flexibility to do things like offer additional financial assistance to enrollees (as Vermont and Massachusetts do) or even stronger healthcare coverage mandates (Hawaii currently has a state law requiring employers to provide coverage to employees working 20 hours or more, vs. the 30 hour threshold that the ACA requires).

Overall, however, it seems to me that in addition to the economic economy of scale/efficiency advantages of running the exchange via, it also simplifies the marketing of the exchange: Instead of promoting a bunch of different websites which no doubt confuses the heck out of some people, every state can just promote Healthcare.Gov, period.

In fact, I can see only one significant downside to doing this...King v. Burwell. If the SCOTUS rules for the plaintiffs and twists the knife further by stating that "federally-assisted" exchanges such as Oregon, Nevada and New Mexico "don't count" as being "established by the state", then under no circumstances should any of these states make such a move.

Well...ok, there is one other downside to more states moving to state-based exchange have a much better track record (in general) of issuing regular enrollment reports during the off-season. was much better about regular reports during open enrollment this time around, but appears to still be pretty much radio silent during the off-season (they only grudgingly released the 36K #ACATaxTime figure last week, and even that wasn't broken out by state and was buried in the middle of a lengthy press release).

Unfortunately, this leaves all of these states, along with everyone else, pretty much twisting in the wind for the next 2 months or so.