12 May 2015 Health Care Odds & Ends: ObamaCare State Exchanges Disaster Edition
According to a recent article in the Washington Post, “Nearly half of the 17 insurance marketplaces set up by the states and the District under President Obama’s health law are struggling financially.”
Here are some of the worst:
1. Hawaii. The Hawaii Health Connector won’t be struggling anymore as it is being put out of its misery. The Connector has “prepared a contingency plan to shut down operations by Sept. 30 after lawmakers failed to pass legislation to keep the state’s troubled Obamacare insurance exchange afloat.” The Connector charges fees on insurance, like most exchanges do, to help keep operations going. Unfortunately, enrollment has not been high enough to raise the fees needed to cover the Connector’s costs.
2. Vermont. Technical failures and security problems have plagued the Vermont Health Connect almost from the beginning. A recent audit found that “serious problems remain with the troubled Vermont Health Connect insurance exchange and questions whether the state can meet deadlines for needed system developments to address the shortcomings.” Vermont is considering dumping its exchange and joining the federal one.
3. Minnesota. Pretty much the same problems as Vermont, with same possible result: dumping the whole mess over to the Feds.
4. Colorado. Annual budget shortfalls for Connect for Health Colorado range from $28 million to $55 million in the next few years. One of the board members, Arnold Salazar, said, “Clearly our fees are too low.” Do you suppose we’ll ever see the day when a government functionary, facing a budget deficit, says, “Clearly, our costs are too high”? The fees on insurance are currently 1.4 percent and may triple to 4.5 percent.
5. Massachusetts. The Commonwealth Connector has faced not only serious technical difficulties, it now faces a federal investigation. The “administration of Republican Governor Charlie Baker [has] confirmed that the FBI and U.S. Attorney for Boston have subpoenaed records related to the commonwealth’s ‘connector’ dating to 2010,” according to the Wall Street Journal. Josh Archambault of the Pioneer Institute has released a report on the Connector mess, claiming that “Our public officials not only were incompetent from a managerial perspective, but appear to have lied to the federal government to cover up mistakes made by both the state and CGI.” Good summary here. Report here.