It’s not just us: Nearly half of state health care exchanges are struggling

A Washington Post story today says nearly half of the state health care exchanges are struggling, with rising costs and balky technology.

Minnesota fits into that category.

The story says:

Many of the online exchanges are wrestling with surging costs, especially for balky technology and expensive customer-call centers — and tepid enrollment numbers. To ease the fiscal distress, officials are considering raising fees on insurers, sharing costs with other states and pressing state lawmakers for cash infusions. Some are weighing turning over part or all of their troubled marketplaces to the federal exchange, HealthCare.gov, which is now working smoothly.

 In discussing specific state exchanges, the story adds:

In Minnesota and Vermont, officials are so fed up with costly technical problems in their exchanges that they are considering handing over some or all of their functions to the state or federal governments. Lawmakers in Oregon abolished the state exchange in March, long after it was essentially turned into a gateway to HealthCare.gov.

Further complicating the issue is the pending Supreme Court decision on whether tax subsidies can be given to consumers in the 34 states that use the federal exchange.

Officials in states with struggling exchanges — who might be considering going into the federal exchange — are holding off until the Supreme Court rules, to be sure their residents will be eligible for subsidies.

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Comments (8)

  1. Submitted by John Appelen on 05/01/2015 - 11:00 pm.

    Costs

    All these extra costs that are being billed to us insured and tax payers…

    I am still not sure why exchanges were needed at all… It seems a simple tax credit would have been far more cost effective.

  2. Submitted by Thomas Swift on 05/03/2015 - 05:59 am.

    All you folks living in states that bought into the Obamacare show will be left holding the bag when the Supreme Court rules in June.

    You had plenty of warning.

  3. Submitted by Hiram Foster on 05/03/2015 - 10:33 am.

    Exchanges

    “Further complicating the issue is the pending Supreme Court decision on whether tax subsidies can be given to consumers in the 34 states that use the federal exchange.”

    I think if you look at the Washington Post article, what it says is that the exchanges are struggling which is distinct from Obamacare struggling. The lawsuit currently pending before the Supreme Court is targeting the subsidies insured receive, not any subsidies the exchanges may or may not receive. So that case isn’t relative to the business problems the exchanges are facing.

    That exchanges would have problems isn’t surprising. They are highly complex endeavors that haven’t existed before and are being started up from scratch in a highly politicized environment. And each state presents individual challenges. Small states, for example have difficulty attracting insurers because their markets are too small. Those who wax eloquently about how our federal structure allows us to have 50 state laboratories for experimentation are clearly not thinking about the advantages of economies of scale, and the high costs of duplication of effort.

  4. Submitted by Hiram Foster on 05/03/2015 - 10:38 am.

    “I am still not sure why exchanges were needed at all… It seems a simple tax credit would have been far more cost effective.”

    Exchanges provide a market place where things can be bought and sold, which has historically been a pretty thing to have. The question of subsidies is largely irrelevant to the issues related to exchanges. You can subsidize the payment of insurance payments either with or without exchanges, Typically, in market places, how you can afford things is not of primary concern to the seller. When you go to Target to buy a light bulb, the cashier never asks you how you got the money to pay for it.

  5. Submitted by Hiram Foster on 05/03/2015 - 10:49 am.

    Impact

    “All you folks living in states that bought into the Obamacare show will be left holding the bag when the Supreme Court rules in June.”

    It’s hard to predict what the ultimate impact of a Supreme Court ruling adverse to Obmacare. It’s made more difficult to predict by Chief Justice Roberts predilection for extracting a pound or two of policy flesh in exchange for a vote favorable to Obamacare. His fevered imagination as to what the founders may or may not have thought about health care policy 228 years after they crafted the founding document is particularly hard to predict. But right now, before CJ Roberts completes his legislative policy making, the impact of a ruling against Obamacare would fall immediately on states which, unlike Minnesota, did not create exchanges. Minnesotans will continue to receive their subsidies. The intent of the folks bringing the suit is to take away the federal subsidies people who live in states without exchanges receive. Whether there is the political nerve among a majority of the Supreme Court to do that, remains to be seen. In Supreme Court matters, it seems to me, the fourth vote is a lot easier to get than the fifth vote.

    • Submitted by Thomas Swift on 05/04/2015 - 10:48 am.

      The cash is all coming from the same pot, Hiram. The federal subsidies are all that’s keeping Obamacare afloat at all. Take them away, and O’care will founder in two years.

  6. Submitted by Hiram Foster on 05/04/2015 - 12:19 pm.

    The cash is all coming from the same pot, Hiram.

    Do you think that makes a difference? I mean the same pot

    ” The federal subsidies are all that’s keeping Obamacare afloat at all. Take them away, and O’care will founder in two years.”

    Sure. No one disputes that Obamacare involves federal subsidies.The question is whether the federal subsidies should be taken away from those states which haven’t created their own exchanges. If the Supreme Court rules that way, without any conditions that would in any way ameliorate the impact of it’s ruling, Obamacare in those states would founder not just in two years, but almost immediately. Again that’s not a disputed issue.

    The more complicated issue is what would happen to Obamacare in states like Minnesota which have exchanges and where the subsidy would continue. It seems apparent to me, that suddenly Minnesota would have an immediate competitive advantage over neighboring states like Wisconsin, and that in effect Wisconsin taxpayers would be subsidizing many Minnesota insured. Thanks Bucky Badger. But would the instability created by a negative Supreme Court destabilize Obamacare everywhere? I have heard that it would, but I don’t understand how.

  7. Submitted by Hiram Foster on 05/04/2015 - 12:21 pm.

    Health care costs

    It’s important to understand that Obamacare is a response to a problem it did not create, namely the increasing cost of health care, which among it’s many other effects, is a drag on the economy. Taking away a response to a problem, doesn’t solve the problem. The costs of health care will still be there, needing to be paid.

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