Obamacare

States Struggle to Pay for Health Exchanges

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Whitehouse.gov

The federal government spent billions funding the development and implementation of state-run health exchanges under Obamacare, many of which struggled or didn't work at all during the law's first open enrollment period.

But the federal grants provided to operate the exchanges under the law are about to run out. And as the Associated Press notes, some the states running their own exchanges don't yet know how they will continue to fund ongoing operations. 

Rhode Island received high marks for the smooth rollout of HealthSource RI amid last year's stumbles by the federal government, and the agency director says the state's health care reform "revolution" has begun. But the state does not have a way to pay for the exchange's long-term operations, and some lawmakers in the state General Assembly have suggested shifting to the federal exchange.

The cost to operate Rhode Island's exchange is estimated at $17 million a year, although an earlier estimate pegged the cost at $24 million.

Vermont's exchange budget is also short. "Officials there acknowledged it could face a $20 million shortfall by year's end," the AP reports. "The state hopes pending federal grants will fill the gap."

Other states, like Colorado and the District of Columbia, are funding their exchanges through fees and taxes on health plans. The District of Columbia system taxes plans that aren't sold through the exchange, officials tell the AP, because the fee would have been too high if it only taxed plans sold in the exchange. California is holding $184 million federal money to pay for an expected shortfall, and has also instituted a $13.95 per month fee on individual plans, both of which it expects will help pay for expected budget shortfalls through 2016. After that? Harder to say, but it's going to continue to be a challenge for states to keep these exchanges afloat. 

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  1. Just the other day, there was an editorial in the Bozeman paper about how those heartless meanies in the state legislature (evul Tea Party Republikkkanz!!) should let the Governor expand Medicaid, because it don’t cost nothin’.

    After all, the Feds promised to pick up the tab for the first year or two.

    1. Sadly, people believe this nonsense. And some of those people vote.

      1. Some of those people vote, and others work for major media outlets.

        1. And some of them are only allowed plastic spoons by the orderlies, so that they won’t accidentally stab themselves with a fork.

          1. I can hurt you badly with a plastic fork.

    2. My foolish Governor, the usually-OK-but-every-once-in-awhile-an-idiot Dan Snyder (TEAM RED – MI) bought into the “FREE MONEEZ FOR TEH MEDICAID!!!1”!

      But it runs out, Gov. Was it Nelson Rockefeller who said (paraphrasing), “I got drunk, and my successor had the hangover”? Cause that’s what’s gonna happen in MI re: Medicaid. Thought we’d have learned after the execrable Jennifer Granholm, but no…

      Gee – I’m so shocked this is happening re: PPACA, of all things. That was so transparent…how could there be any unforeseen consequences??

    3. No worries here in debt free IL! Our (outgoing) Donkey Governor was quite happy to sign, and put us further into the hole.

      1. To be fair, there’s no hope for you guys. You are already going to sink under pension debt.

        1. And I’ll be about 5 years behind.

          1. My wife had 11 years in various park districts and was compelled to participate in one of the pension schemes…er, plans that is slowly drifting into BK land… while not large, I have written it off in our retirement planning.

            1. I have CalPers and SS. I am planning to have neither.

  2. Before Ocare, anyone could shop on various insurance aggregator sites for FREE. I presume costs were covered through advertisements and maybe small fees paid by the insurers who sold plans through the site.

    As with everything, when gov’t gets involved, price goes up and quality goes down.

  3. My best friend’s mother-in-law makes $85 /hour on the internet . She has been out of work for 5 months but last month her pay was $16453 just working on the internet for a few hours.
    Visit this website ????? http://www.jobsfish.com

      1. Oh, she IS the state exchange. If you catch my meaning.

  4. I honestly don’t understand what they’re spending, and spent, all the money on.

    Fine, it was a novel database connectivity task, to tie the different verification data sources together. But in almost all cases they didn’t actually achieve that goal, and are using pieced-together batch processes to fill the gap.

    So where the hell is the money going?

    If it was this fantastically expensive to start and run websites, there would not be an internet.

    1. Didn’t some college student come up with a working version of a health insurance exchange basically over a weekend?

      Sure, it lacked the back office interfaces, etc., but so do the multi-million dollar ones.

    2. If it’s anything like my job, here’s how it goes. Every little design detail and revision must go through a committee of government idiots with no knowledge or understanding of what it is they are deciding. So all decisions are made for political reasons. For example someone on the committee slighted you five years ago, so you’re going to block everything that they want, simply because you can. Meanwhile teams of software engineers spend most of their time sitting on their hands because the the work they are supposed to be doing is waiting for a signature or for committee approval, and they’ll be fired if they do any unauthorized work. It’s ridiculously wasteful, but what do they care? It’s not like it’s their money that they are wasting.

      1. Yep. Pretty much.

        A few years ago, the powers that be where I work spent about a month deciding on what shade of blue to use on a web site. This is tru fax.

        To this day, the powers that be will spend months dicking around with wording and color schemes and where buttons should go, then give the web developers 5 days to build out everything they spent months hemming and hawing over.

        1. Several years ago I was sent a strongly worded email to back out a fix I had made to the software. This was a real error. You know, the kind that causes the program to fail with one of those error screens and such. But because the fix had not gone through committee, I had to undo it.

          That was the last day I gave a shit about my job.

        2. Prussian Blue?

          1. Who the fuck knows? The web site existed for about 5 years and was scrapped because the incoming moron boss wanted her name on everything, and that site was associated with Karen Hughes. They even gave up the domain and handed it back to GSA. It was a great domain and perfectly encapsulated our mission and the propaganda wing of the US Gubmint.

      2. My boss (in a real world company) would chew my ass if I wasted 2 minutes of his time with that kind of shit.

      1. I don’t see the runners carrying paper output from one agency to another.

        1. They’re the green and purple arrows.

    3. So where the hell is the money going?

      In the case of Vermont, Jonathan Gruber needs his cut:
      Former Vermont Governor Blasts State’s $450k Contract with Jonathan Gruber

  5. Man, we sure are finding out what’s in it, aren’t we?

    1. Good and hard, aye.

  6. So where the hell is the money going?

    “Ergonomic” chairs and keyboards.

    And Mercedes Benz SUVs.

    1. The real ballers are rockin’ Lambo’s .

  7. Rhode Island and Providence Plantations

  8. Other states, like Colorado and the District of Columbia, are funding their exchanges through fees and taxes on health plans. The District of Columbia system taxes plans that aren’t sold through the exchange, officials tell the AP, because the fee would have been too high if it only taxed plans sold in the exchange.

    See? The idea is to simply make any form of “private” insurance so unattractive, everyone will be forced into the exchanges. Which will “prove” the success of the Obamacare system. Look how many people are signing up!

    1. I year young people are still flocking to DC because they’re morons.

      1. Who can blame them, it’s where my money is.

  9. A few years ago, the powers that be where I work spent about a month deciding on what shade of blue to use on a web site. This is tru fax.

    Doctor Parkinson’s bicycle shed strikes again.

  10. There were a lot of things about Obumblecare that we didn’t know but this isn’t one of them. Fuck the states that set up their own exchanges.

    1. To be fair, we had to pass it to find out what’s in it.

  11. instituted a $13.95 per month fee on individual plans

    remember when WalMart or McDonalds had that $15 a month plan that leftists thought was shitty coverage? at least you got some coverage instead of a shitty government website fee.

  12. “But the federal grants provided to operate the exchanges under the law are about to run out. And as the Associated Press notes, some the states running their own exchanges don’t yet know how they will continue to fund ongoing operations.”

    What? You mean administration costs money? Oops!!

  13. Given the Supreme Court case coming next year, what do you think these states giving up their own exchanges in favor of the healthcare.gov will do?

  14. California is holding $184 million federal money to pay for an expected shortfall, and has also instituted a $13.95 per month fee on individual plans, both of which it expects will help pay for expected budget shortfalls through 2016.

    $170 per year per plan? For a stupid website? And that still doesn’t cover its costs? That’s like two Amazon Prime subscriptions!

    Egad.

  15. If a government at any level is to be a benefactor then that government must be an even larger parasite.

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