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State exchanges still plagued by financial challenges

Hawaii, Vermont consider options in coming months

Around the country, states that opted to run their own insurance exchanges continue to face significant challenges. Funding problems in particular plague small states, which generate less revenue from taxes that can be used to operate the exchanges.

Additionally, many states no longer receive the federal funding they initially relied on to develop and run their exchanges.

As the year rolls on, many states will debate if running their own exchanges is worth the hassle and cost, reported Governing, as the main source of revenue for some comes from fees paid by insurers. Listed below are two states worth keeping an eye on in the coming months.


When Jeff Kissel, the state's exchange director, took over the system after a less-than-successful first year, he set the goal to eventually depend only on the exchange's revenue.

However, Kissel now realizes this may be a fleeting thought, as the state's exchange will not be able to operate solely on its own revenue. Kissel has requested to take out $28 million in bonds to improve technology. On top of that, the state still is receiving $1.5 million in state funding this year, but the site won't be financially viable by 2022. But Kissel believes that by 2022, enrollment in the individual market will increase from 15 percent to 19 percent, noted Governing.

State Rep. Beth Fukumoto Chang (R) is reluctant to authorize the bond but also does not want to give the state's exchange over to the federal government because of the looming King v. Burwell subsidies case that could potentially deny financial assistance to states that don't run their own exchanges.


The state is unique in the sense that it requires small business to participate in the state's exchange. While this bodes well for enrollment numbers, it does not provide enough money for the exchange to operate without general funds.

Recently, a bipartisan group proposed turning over all IT functions to the federal government while still maintaining general operations of the exchange, noted Governing.

However, House Speaker Rep. Shap Smith (D) stressed that switching to Healthcare.gov isn't free. Oregon, for instance, made the switch last year, at the price of somewhere between $4 million to $6 million--though that was far less than the $78 million estimate for fixing Cover Oregon. Like Hawaii, Vermont will continue to examine its options.

For more:
- here's the Governing article

Related Articles:
State health insurance exchanges face financial uncertainty
Oregon makes the switch to HealthCare.gov
Briefs: King v. Burwell ruling against subsidies would be 'devastating'
Troubled state insurance exchanges face lawmakers' scrutiny