Cash-strapped State ObamaCare Exchanges Considering Mergers

It won’t do any good, we still can’t afford it and never could. Several state exchanges for Obamacare are running out of money, there’s no way to deny the facts. The reason, they didn’t sucker in as many as they thought they would, so now they are hurtin’ for cash. In an attempt to keep their heads above water, many exchanges are considering combining some of their operations with those of other states — a tactic that may prove as difficult as setting up the exchanges in the first place and that raises the specter of fully nationalized health insurance.

Fact:  Obamacare  disbursed about $5 billion in subsidies to states to get their exchanges up and running. After that, the exchanges were supposed to be self-sufficient. The law set a deadline of the end of 2015 for that to occur; but the administration, as is its wont, pushed that deadline back a year when it became clear that the exchanges couldn’t meet it.

But now the Washington Post is reporting that about half of the exchanges are short on cash. Vermont’s exchange, for example, is expected to cost $200 million to run this year; California’s is facing an $80 million deficit. Some exchanges, such as Oregon’s, have already folded; Hawaii’s is close to doing so. Others, such as Nevada’s and New Mexico’s, are still officially operating but relying on Healthcare.gov to enroll their residents. Still others are trying to stave off the inevitable by raising fees on exchange plans and cutting other services.

“What is happening is states are figuring out the money is running out,” Jim Wadleigh, the director of Connecticut’s exchange, told The Hill. Wadleigh “said he has been in conversations with many states — some using the federal exchange and some running their own exchanges — about possible partnerships,” the paper reported.

New American

We told liberals this would happen, but they wouldn’t listen to us.

The Supreme Court, in the case of King v. Burwell, is expected to rule shortly on whether people buying insurance on the federal exchange are eligible for subsidies. If the court decides they aren’t, those states currently using Healthcare.gov will suddenly have a strong incentive to establish their own exchanges, and they won’t want to wind up in the same boat as Vermont and California.

This move to merge  is “absolutely being driven by the court case,” Joel Ario, former director of the federal Office of Health Insurance Exchanges said.

States using Healthcare.gov are currently drafting contingency plans in the event that the Supreme Court strikes down subsidies on the federal exchange.

“In the last seven business days,” Wadleigh told the Washington Post, “I’ve probably had seven to 10 states contact me about contingency plans.” (He declined to name the states, citing possible “political backlash.”)

New American

It’s unlikely that states could ever merge the full responsibilities of a marketplace, such as regulating plans and managing risk pools.

But even with a simpler model, like a shared call center or website platform, there are big questions about how states could share those costs and duties.

Jennifer Tolbert, a state health expert with the Kaiser Family Foundation, said “one of the trickiest issues” would be determining a governing structure for multi-state exchanges.

“I don’t know how that would be resolved,” she said.

These hurdles have been big enough to thwart multiple states from moving forward with their plans. Delaware, Maryland and West Virginia, which commissioned a study on the option in June 2013, have all dropped the idea.

Well folks, you believed the Obama lies on how it would be cheaper, not to mention the fact the law was passed without being read. So now, you have to deal with it.

So far, the only thing that will save the states money is shared technology. This won’t work for states that used federal dollars to build their websites or establish their call centers, though, because they aren’t allowed to share such things. That leaves primarily those states currently using the federal exchange, and their desire to open their own exchanges will be largely contingent upon the upcoming Supreme Court decision.

And should these exchanges go broke, a single payer plan won’t work either, as still, people won’t sign up for the high premiums, co pays, and deductibles.

High costs, after all, aren’t the sole reason the exchanges are foundering. Just as big a problem is the fact that no one wants what they’re selling. According to a recent study by healthcare consulting firm Avalere Health, state exchange enrollment, already tepid in 2014, increased by just 12 percent for 2015, considerably lower than the federal exchange’s 61-percent growth. Vermont and Washington actually enrolled fewer people this year than last year. Since most exchanges derive their operating income from fees on the health plans they sell, if few people are buying, the exchanges aren’t going to be able to pay their bills.

What this is leading to, is what Odummer wanted all along, the feds taking complete control of healthcare.

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3 responses

  1. Told You All So. Too High, Pricey, And Going For Broke. Talk Is Cheap Or Is It Lies And Liars Are Cheaper By The Dozen. Mergers, Can Go Broke Too.

    1. It’s all leading up to a single payer plan, ie: Odummer telling us what we must buy and how much we must pay. I say he can take his law and shove it.

  2. Five, Words, In, Vocabulary: Stick It Up Your Behind!

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