State ObamaCare exchanges are fast running out of cash because of higher-than-expected costs and lower-than-expected enrollment. In an attempt to keep their heads above water, many exchanges are considering combining some of their operations with those of other states — a tactic that may prove as difficult as setting up the exchanges in the first place and that raises the specter of fully nationalized health insurance.
The Obama administration, under the terms of the Affordable Care Act (ACA), disbursed about $5 billion in subsidies to states to get their exchanges up and running. After that, the exchanges were supposed to be self-sufficient. The law set a deadline of the end of 2015 for that to occur; but the administration, as is its wont, pushed that deadline back a year when it became clear that the exchanges couldn’t meet it.
According to the Washington Post, about half the exchanges are financially troubled. Vermont’s exchange, for example, is expected to cost $200 million to run this year; California’s is facing an $80 million deficit. Some exchanges, such as Oregon’s, have already folded; Hawaii’s is close to doing so. Others, such as Nevada’s and New Mexico’s, are still officially operating but relying on Healthcare.gov to enroll their residents. Still others are trying to stave off the inevitable by raising fees on exchange plans and cutting other services.
“What is happening is states are figuring out the money is running out,” Jim Wadleigh, the director of Connecticut’s exchange, told The Hill. Wadleigh “said he has been in conversations with many states — some using the federal exchange and some running their own exchanges — about possible partnerships,” the paper reported.