KHN Morning Briefing

Summaries of health policy coverage from major news organizations

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Nearly Half Of State-Run Health Exchanges Face Financial Woes

Almost half of the 17 state-run health insurance marketplaces are confronting serious financial difficulties. Some may even be misusing health law grants to keep the exchanges operating. Under Obamacare, states are supposed to be able to cover the cost of operation starting this year.

The Washington Post: Almost Half Of Obamacare Exchanges Face Financial Struggles In The Future
Nearly half of the 17 insurance marketplaces set up by the states and the District under President Obama’s health law are struggling financially, presenting state officials with an unexpected and serious challenge five years after the passage of the landmark Affordable Care Act. Many of the online exchanges are wrestling with surging costs, especially for balky technology and expensive customer call centers — and tepid enrollment numbers. To ease the fiscal distress, officials are considering raising fees on insurers, sharing costs with other states and pressing state lawmakers for cash infusions. Some are weighing turning over part or all of their troubled marketplaces to the federal exchange. (Sun and Chokshi, 5/1)

The Fiscal Times: Some States Are In Debt Over Obamacare Exchanges
Some states may be misusing Obamacare grants in order to keep their state insurance exchanges operating—potentially flouting a provision in the law requiring them to cover the costs of the exchanges themselves starting this year. That’s the concern of the Department of Health and Human Services Inspector General Daniel Levinson which sent a letter this week reminding health officials that they can't use ACA exchange "establishment" grants for overhead costs—like staffing—as some states like Washington have been doing. (Ehley, 5/1)

Politico Pro: State Exchanges Scramble For Funds
States running their own health insurance exchanges have largely managed to survive Obamacare’s initial rollout, but a much more mundane task now stands as the biggest threat to their survival: finding money to keep the lights on. ... Government auditors this week indicated their own concerns about the financial viability of the state exchanges. The HHS inspector general warned the Obama administration that states may be improperly using leftover federal grants to cover holes in their operating budgets. (Pradhan, 5/1)

News outlets also provide related updates from Washington state and Oregon -

The Seattle Times: State’s Health Benefit Exchange Struggling For Viability
Financial challenges are threatening the survival of Washington’s Healthplanfinder insurance exchange. First, the marketplace is facing a state budget proposal that would provide roughly two-thirds of the money that exchange officials say they need. Then this week, U.S. officials warned that exchange spending plans include what could be the illegal use of federal grant dollars. The Senate’s budget plan “threatens the viability” of the exchange, Ron Sims, chairman of the board overseeing the exchange, said in a recent statement. (Stiffler, 5/1)

The Oregonian: After A Year Of Losses, Many Oregon Health Insurers Seek Bigger 2016 Premiums
Moda Health wants to boost premiums an average 25 percent for more than 100,000 Oregonians next year, and other insurers are seeking even bigger hikes. Other insurers, however, are holding relatively steady or even reducing rates – notably Kaiser Foundation Health Plan with a nearly 2 percent cut. ... Though not final, the filings suggests a major rescrambling of the individual market, where more than 200,000 Oregonians who are not on Medicare or the Oregon Health Plan buy their own coverage. (Budnick, 5/1)

This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.