States Try to Fix Exchanges

June 11, 2014

According to the Wall Street Journal, five states are looking at spending up to $240 million to fix their exchange websites or switching to the federal marketplace.

Maryland, Massachusetts, Minnesota, Nevada and Oregon's health insurance marketplaces have been plagued with problems. Before the next enrollment period, which begins in November, the states will need to fix their sites or use the federal marketplace. Already, the five states have spent, or committed to spend, over $700 million in federal taxpayer dollars.

The Affordable Care Act granted states the option to build their own exchanges or use the federal exchange. Fourteen states chose to build their own websites. Under the law, states are required to sustain their own exchanges after the first year of operation, though federal grants awarded through 2014 can be used to cover implementation expenses next year. Operational expenses, however, must come from states funds, and the law does not allow for grant requests in 2015.

Maryland estimates that it will cost the state $50 million to upgrade its site, and state officials hope to adopt the same technology used by Connecticut. Lawmakers, on the other hand, are urging the state's governor to move to the federal exchange, which they say would come at little to no cost. However, Joshua Sharfstein, secretary of Maryland's Department of Health and Mental Hygiene, says that upgrading the marketplace will be more cost-effective when one considers the additional costs of modernizing the Medicaid system to meet new federal requirements. By upgrading the technology, he says, the state would also meet the new Medicaid standards.

Oregon plans to use the federal exchange beginning in November, paying $6 million in state funds to do so. Medicaid enrollment will be taken over by the Oregon Health Authority at a cost of $35 million, 90 percent of which will be paid for with federal taxpayer funds.

Source: Stephanie Armour, "Five States' Health-Care Exchanges See Costly Fixes," Wall Street Journal, June 3, 2014. 

 

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