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States sticking to insurance exchange models for 2015


Few states could claim Obamacare's first enrollment period was smooth — whatever the final numbers — but most will approach their insurance exchanges the same way for the 2015 window. None has asked the Obama administration to take over its marketplace or elected to abandon HealthCare.gov in favor of running its own.

For the 2014 enrollment period, 26 states and the District of Columbia opted to run their own marketplaces, while 17 states relied completely on HealthCare.gov, and the remaining seven resorted to partnerships intended as bridges to independent exchanges. States had until May 1 to declare if they wanted to switch models, and the CMS received none, an agency spokeswoman said.

The lack of response is surprising given that several states, particularly Hawaii, Maryland, Massachusetts and Oregon, were widely expected to ditch their own exchanges after severe technical problems impeded many consumers from signing up for coverage online. Meanwhile, many expected Iowa and Illinois to end their partnership arrangements and take full control of their exchanges.

Late last month, the board of Oregon's troubled exchange voted to jettison the state's site, and use HealthCare.gov to enroll beneficiaries into plans. Despite the switch, the state has retained enough day-to-day oversight in managing its qualified health plans that the CMS still considers Oregon to have a state-based exchange, a spokeswoman for Cover Oregon said.

States with troubled exchanges likely wanted to focus on improving their marketplaces for the next enrollment period, Jerod Brown, ‎senior policy manager at Blue Cross and Blue Shield Association said during the Institute for International Research's Medicaid Managed Care Congress on May 19.


Maryland, for example, has chosen to rebuild its marketplace and is adopting technology from Connecticut.

The CMS says it will continue to be flexible with states that decide they need to turn to HealthCare.gov for the 2015 enrollment period.

Massachusetts is working on a dual track, attempting to rebuild its state exchange with a new vendor while also working on a plan that involves ceding control of its marketplace to the federal government. State and federal officials said they hope the course will be clear by July.

“These are state decisions, we aren't forcing them to choose one path or the other, and are instead working with them on what makes the most sense for their state and for their consumers,” a CMS spokeswoman said. “We are working with Massachusetts on a timeline based on their decisions.”

The uncertainty has been nerve-wracking for health plans in the state, said Susan Coakley, interim president of Massachusetts-based BMC HealthNet Plan.

From a technology perspective, “IT people are pulling their hair across the state,” Coakley said, as payers work with their vendors to prepare for both scenarios. From a program standpoint, she added, there is concern as federal exchange offerings tend to be more generic than state offerings.


If the state does pull the plug on its own exchange, it would mean the end of the state's program offering wraparound premium and cost-sharing subsidies to help people between 200% and 300% of the federal poverty level afford comprehensive coverage.

That scenario “would be a tremendous failure for the state,” Coakley said. “These people would have to jump to the exchange, and while they may be eligible for some qualified health plan tax credits, they won't get much, and it will create access issues.”

State legislation that would have given Illinois and Iowa full control over their marketplaces failed to pass. The partnership exchange model was envisioned as stepping stone for states that ultimately wanted to run their own but weren't able to build them in time for the 2014 open enrollment period that began Oct. 1, 2013.

Spokesmen from both states say that's still the plan in the long term and didn't rule out a switch for 2016.

West Virginia, however, says it has no plans to ever severe ties with HHS and enjoys having some say in its offering, while not assuming full responsibility for it.

“It was determined early on, back in 2012, that it did not make fiscal sense to build, operate and maintain a state exchange given West Virginia's small population,” said Michael Riley, the state's insurance commissioner.

Virgil Dickson writes for Modern Healthcare, a sister publication of Business Insurance.