Debate Continues Over Implementation of State-Run Exchanges

While lawmakers initially had intended to have each state run its own health insurance exchange, only 16 states and Washington, DC, have opted to do so. Many now wonder if the remaining states will establish their own exchange, as the November deadline to receive federal grant funding approaches, or if they will simply default to utilizing a federally-run exchange.

While lawmakers initially had intended to have each state run its own health insurance exchange, only 16 states and Washington, DC, have opted to do so. Many now wonder if the remaining states will establish their own exchange, as the November deadline to receive federal grant funding approaches, or if they will simply default to utilizing a federally-run exchange.

For states like Illinois, the pressure is mounting. Illinois was one of a few states to adopt a “hybrid” exchange, or one that is managed both by the state and the federal government. An exchange that is fully state-run could create $500 million in additional funding. Sonya Schwartz, JD, research fellow, Georgetown University Health Policy Institute, says Illinois is one of several states including Iowa, Arkansas, Michigan, West Virginia, New Hampshire, and Delaware that are most likely to shift to state-run exchanges.

It seems that early adopters’ success or failures will shape these states’ final decisions. Although some states like Oregon and Maryland have faced technology issues with their exchanges, policy makers see that those state-run exchanges have bounced back and are enrolling customers at a faster rate than the federal exchanges. They also have more control over enrollees’ insurance rate increases.

Other lawmakers maintain that there is not enough evidence that a state-run exchange will be financially responsible. Take for example that California’s exchange, the most efficiently state-run exchange in the country, enrolled more than 1 million people into private insurance plans after receiving $1.06 billion in federal funds. Hawaii's exchange, conversely, received more than $205 million in federal funding but only enrolled an estimated 5700 people into private insurance plans as of March.

Phil Kerpen, president of the nonprofit advocacy group American Commitment, said that proponents of state-run exchanges support the sense of ownership and control that these exchanges provide. Proponents also maintain that state-level control helps to negate the concerns of those who view health insurance exchanges as federally imposed programs.

Around the Web

Clock Ticking for States to Adopt Health Exchanges [Yahoo! News]

Bang for Bucks: Best and Worst Obamacare Exchanges [CNBC]