More states may turn ex­change du­ties over to the feds

Modern Healthcare - - NEWS - By Vir­gil Dick­son

The U.S. Supreme Court’s de­ci­sion to up­hold pre­mium sub­si­dies through the fed­eral ex­change could spell the end of states es­tab­lish­ing their own Af­ford­able Care Act mar­ket­places. It could even prompt more states to turn over con­trol of their ex­changes to the fed­eral gov­ern­ment.

Be­fore the sub­sidy rul­ing, only three of the 34 states re­ly­ing on HealthCare.gov as their en­roll­ment plat­form—Arkansas, Delaware and Penn­syl­va­nia—sub­mit­ted plans to the CMS to be­come state-based mar­ket­places. But with sub­si­dies safe for now through the fed­eral ex­change, ex­perts say it’s un­likely that more states will move for­ward with such plans.

“There is prob­a­bly min­i­mal in­cen­tive at this point to cre­ate an ex­change from scratch,” said Sab­rina Cor­lette, se­nior re­search fel­low at Georgetown Univer­sity’s Cen­ter on Health In­sur­ance Re­forms.

The irony is that dur­ing the draft­ing of the Af­ford­able Care Act in 2009, House Democrats wanted one fed­er­ally run ex­change to serve the whole coun­try, while Se­nate Democrats wanted to give states more flex­i­bil­ity by let­ting them set up their own mar­ket­places. While the sen­a­tors ul­ti­mately pre­vailed, some observers pre­sciently ques­tioned the vi­a­bil­ity of ev­ery state run­ning its own ex­change.

Af­ter last week’s rul­ing, Penn­sylva- nia’s Demo­cratic gover­nor, Tom Wolf, said his state would with­draw its pro­posal to es­tab­lish its own ex­change. “I am pleased to say that we will no longer need to rely on this plan,” he said in a writ­ten state­ment.

Delaware, which has a Demo­cratic gover­nor and Demo­cratic-con­trolled Leg­is­la­ture, is still de­bat­ing whether to switch from hav­ing a fed­eral-state part­ner­ship ex­change to a fully staterun mar­ket­place. Un­der the part­ner­ship ar­range­ment, the state re­tains over­sight on plan premi­ums and ben­e­fits while HHS over­sees en­roll­ment and health in­for­ma­tion tech­nol­ogy.

The court’s de­ci­sion “has brought our anx­i­ety down in that it won’t force us to choose to be­come a state-based ex­change,” said Rita Land­graf, the state’s health and so­cial ser­vices sec­re­tary. “But we still think it’s worth ex­plor­ing which model is best for Delaware.” She said the state would de­cide by the end of July.

Arkansas’ Repub­li­can gover­nor, Asa Hutchin­son, an­nounced Thurs­day that his state is still con­sid­er­ing a staterun ex­change.

The King vs. Bur­well rul­ing may prompt Hawaii and Ver­mont, two states that have strug­gled with tech­nol­ogy prob­lems on their state-run ex­changes, to rely on HealthCare.gov for en­roll­ment, said Ceci Con­nolly, man­ag­ing di­rec­tor of Price­wa­ter­house-Coop­ers’ Health Re­search In­sti­tute.

Many states, such as Colorado and Min­nesota, have strug­gled with how to fund their ex­change’s op­er­at­ing costs. Un­der the ACA, state-run ex­changes were sup­posed to be fi­nan­cially self­suf­fi­cient this year. That is­sue is lead­ing a num­ber of states to con­sider turn­ing their ex­changes over to the feds.

Some states may con­sider switch­ing to a model known as a fed­er­ally sup­ported state-based mar­ket­place. Un­der that ar­range­ment, states es­sen­tially rent HealthCare.gov as their tech­nol­ogy and en­roll­ment plat­form but take on re­spon­si­bil­ity for most other func­tions. New Mexico, Ne­vada and Ore­gon have adopted that model.

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