More states are taking control of their health insurance marketplaces to take advantage of cost savings, increase their autonomy, and support wide-ranging health reform efforts, according to a new report Thursday.
Several states are planning or mulling a move from HealthCare.gov, a federal health insurance marketplace established under the Affordable Care Act to help individuals find coverage, to state-run platforms. Maine, Nevada, New Jersey, New Mexico, Pennsylvania and Oregon are among the states thinking about making the switch.
But researchers at the Georgetown University Center on Health Insurance Reforms and the Urban Institute say there may some risks that states want to consider before taking control of their ACA exchange marketplaces.
While building a state marketplace has become cheaper since they launched a decade ago, the researchers encouraged states to take their time building their IT infrastructure, since there’s so much at stake.
But that “in the states where they built their own marketplaces in 2013, only to see them crash and burn, there’s some residual PTSD,” said Sabrina Corlette, founder and co-director of the Georgetown University Center on Health Insurance Reforms.
Public officials, payers, consumer groups are also concerned about potential gaps in coverage for enrollees, financial aid issues and fluctuations in federal policymaking.
States are eager to capture cost savings through their own exchanges and redirect the funds to other priorities. They also see opportunities to improve the consumer experience and protect their insurance marketplaces from changes in federal policy.
“There’s a sense that … the policy of the Trump administration has been to undermine the Affordable Care Act marketplaces,” said Sabrina Corlette, founder and co-director of the Georgetown University Center on Health Insurance Reforms. “By taking control of the marketplaces, (states) can inoculate themselves against some of the Trump administration’s policies.”
Many states were uneasy about cutbacks in outreach and consumer assistance for enrollment and a recent proposal to eliminate automatic reenrollment.
“There’s a concern that there’s going to be this continuous drumbeat of policies coming from the Trump administration to chip away the coverage through these marketplaces,” she said.
Red states can also see benefits from running their own marketplaces, since they would have more flexibility to pursue more conservative policies such as short-term health plans or other types of insurance that don’t meet ACA standards.
“(The Trump administration) would probably welcome a state that’s more conservative coming forward and wanting to run its own marketplace,” said Corlette. “Every one of the states we talked to said CMS has been very, very receptive and willing to work with them.”
Supporters of state-based marketplaces believe the long-term benefits of moving away from HealthCare.gov are worth it. The switch would allow states to better align their insurance markets with their unique health concerns and experiment with policies, like a Medicaid buy-in or a public option plan.
“If they want to go beyond the ACA, they really need their own marketplace,” said Corlette. “It’s not just a defensive strategy, it’s an offensive strategy too.”