Hawaii, Others Struggle With State-Run Exchanges; Arkansas Starting Its Own

While Arkansas is transitioning to a state-operated health insurance marketplace, Hawaii has become the latest state to hand control of its state-run effort to the federal government, and some others running their own exchanges are struggling financially, the Associated Press reported Sunday.

Twelve states and the District of Columbia control their state health insurance exchanges, and Arkansas is moving in that direction under a law passed in the 2013 legislative session. The Arkansas Health Insurance Marketplace plans to offer a state-managed Small Business Health Options Program beginning Jan. 1, 2016, and an individual insurance exchange beginning Jan. 1, 2017.

The insurance exchanges – marketplaces for consumers to purchase health insurance that complies with Affordable Care Act mandates – were at the heart of the recent King v. Burwell Supreme Court case. The Court ruled that individuals who live in states that use a federal exchange instead of a state-operated one are still eligible for federal subsidies.

Hawaii spent $139 million of a $205 million federal grant to create its exchange and enrolled only 8,200 individuals, the AP reported. That’s almost $17,000 per customer, so the state is ceding control to the federally operated HealthCare.gov for 2016.

“Twelve states and the District of Columbia fully control their markets. Experts estimate that about half face financial difficulties. Federal taxpayers gave nearly $5 billion in startup grants to the states, expecting that state markets would become self-sustaining. Most of the federal money has been spent, and states have to face the consequences,” the AP reported.

One possible solution is for states to pool their resources. States in New England are considering a regional exchange.

For more on the story, go here.