The COBRA Blog

ACA Update: Are State Marketplaces Throwing in the Towel?

Posted by Robert Meyers on Tue, May 13, 2014 @ 13:05 PM

ACA-UpdateFor consumers, the end of open enrollment is no big news. We saw it coming, and its meaning is simple: Anyone who doesn’t yet have insurance will just have to wait till the next enrollment period to get coverage (unless they qualify for special enrollment, Medicaid or CHIP).

For health insurance Marketplaces, the conclusions are less cut-and-dried. Now that the roller coaster of open enrollment has ended, state Marketplaces are struggling to respond to the problems that haunted their performance. In many cases, performance in the state exchange left something to be desired. In a few cases, it was an outright failure.

Take the Washington Marketplace, for example. Here, “system defects and data issues” allowed certain consumers to sign up and pay without actually receiving coverage. Some of them were informed of the glitch; others received incorrect bills.

Oregon, meanwhile, “built what is widely regarded as the worst-functioning state exchange in the nation.”

Massachusetts was the first state to introduce its own exchange – and last week the original Marketplace software was scrapped for a different solution. While we can assume its administrators are holding out hope that the new software will solve their problems, they’re also preparing for the possibility that it won’t work either. If that’s the case, they’ll turn private enrollment over to the federal exchange.

Throwing in the state towel seems to be a trend. In fact, some “health-care experts” recently told CNBC that “almost half of the existing state-run Obamacare Marketplaces could, in the coming years, end up turning enrollment operations in private insurance plans over fully to the federally run for a variety of reasons.”

While the federal government is willing to absorb the operation of failed state Marketplaces, the situation is not what it would call ideal. The original idea behind the Affordable Care Act was that most (if not all) states would successfully launch their own local insurance Marketplaces, providing coverage to any state citizen who wasn’t already insured through their place of work. Yet only 14 states have chosen to build their own Marketplaces – some failing publicly.

Time will tell if existing state Marketplaces will get their feet under them, and if new Marketplaces will appear from any of the 36 remaining states ... or if, on the other hand, the local health insurance landscape will continue to slide toward the federal Marketplace.

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Tags: aca update, affordable care act, health insurance marketplace, state marketplaces

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