How will states pay to operate exchanges?


At least 15 states will continue operating their own health insurance exchange with no assistance from the federal government. Those state leaders, however, must determine how to fund their marketplaces.

The Affordable Care Act stops providing federal funds for state-based exchanges in 2015. Of the 17 state-based exchanges that launched last year, 15 plan to keep operating in 2015 and must become self-sustaining, Vox reported.

"There won't be any big pot of federal money," Elizabeth Carpenter, a director at health research firm Avalere told Vox. "When you think about being able to run an exchange without the federal backstop, it will take a while to forecast and figure out what money is needed."

With only one year of operation under their belt, it's challenging to determine exactly how much money they need, particularly since that first year of data doesn't represent a typical enrollment process.

"We still don't understand what normal volume is," Richard Onizuka, executive director of the Washington Health Benefits Exchange, told Vox. "That comes into play when we're projecting our budget for sustainability."

So far, many state officials have found a few ways to pay for their exchanges--charge insurers a fee of anywhere from 1 percent to 3.5 percent, use any remaining grant funding from the 2014 enrollment season or secure additional money from the state.

Of the 17 state-based exchanges, Oregon was the first to announce it will switch to the federal marketplace for next year, as FierceHealthPayer previously reported. Massachusetts hasn't yet decided whether it will use or continue with its own troubled exchange.

To learn more:
- read the Vox article

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