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State-based exchanges tough to pull off

JAMA: Start-up costs and performance benchmarks vary widely

Leading up to the Supreme Court's decision in King v. Burwell, several states prepared contingency plans in case federal subsidies were struck down and they needed to establish their own state-run health insurance marketplaces.

Now that the high court has upheld federal subsidies, states face a choice. But state legislators should proceed with caution if they decide to set up state-based marketplaces, according to a recent article from the Journal of the American Medical Association (JAMA).

The article notes that performance benchmarks and start-up costs of state-based marketplaces vary greatly.

Since 2010, the federal government dished out grants totaling $4.8 billion for states to develop exchanges. California, Hawaii, Kentucky, New York, Oregon and Washington accounted for 53 percent of the total. Hawaii--the nation's most expensive marketplace per enrollee--received more than $205 million as of February 2015, but enrolled only 12,625 individuals. Financial struggles have forced the state's exchange to cease operations as of Sept. 30.

States operating their own exchanges or using Healthcare.gov experienced different levels of success during the first ACA open enrollment period. Massachusetts was the only state-run marketplace to rank in the top five for enrollment growth--the rest relied on Healthcare.gov or a federal-state partnership.

Further, JAMA points out that most states using Healthcare.gov outperformed their state-based counterparts in terms of enrollment figures. Out of nine states that enrolled over 50 percent of potential marketplace enrollees in 2015, five were federally-facilitated marketplaces, two were federally-run partnerships and two were state-based marketplaces.

For more:
- here's the article

Related Articles:
Supreme Court upholds ACA's federal subsidies 6-3
Did King v. Burwell ruling just kill state-based exchanges?
Hawaii state insurance exchange to shut down