State Obamacare Exchanges Experience Growing Pains : Shots - Health News Minnesota, Colorado and Connecticut are figuring out how to keep their health insurance marketplaces afloat as federal startup funding runs out.
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State Obamacare Exchanges Experience Growing Pains

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State Obamacare Exchanges Experience Growing Pains

State Obamacare Exchanges Experience Growing Pains

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A big Supreme Court case being decided this month could upend health care exchanges set up by the federal government. Thirty-four states that let the feds create their exchanges under the Affordable Care Act could lose big subsidies.


Not so for the 16 states, plus D.C., that did it themselves. But those state-run exchanges face their own challenges.

SHAPIRO: Today, we'll hear from three states. We start in Minnesota where Mark Zdechlik reports politics threatened the health care exchange there.

MARK ZDECHLIK, BYLINE: Even though Minnesota's exchange, MNsure, ran much more smoothly in its second year than it's disastrous first year, some Republicans opposed to Obamacare from the beginning had hoped to do away with MNsure this legislative session. Among them, State Representatives Nick Zerwas and Mary Franson.

NICK ZERWAS: This has been an abject failure from day one to present. If you're denying that, your head is in the sand.

MARY FRANSON: We should have never gotten into the exchange, and we should just move straight to the federal exchange and bypass the state of Minnesota.

ZDECHLIK: Even the Democratic architect of the law that created MNSure wanted to dissolve its board and make MNsure a state agency. In the end, lawmakers went home leaving MNsure intact. But they want the feds to allow Minnesotans to get tax subsidies regardless, whether they shop on the open market or through MNsure. They also created a bipartisan task force to consider MNsure's future. Republican Representative Matt Dean says those relatively small measures make a big point.

MATT DEAN: The final agreement, I think, acknowledges that there's major trouble with MNsure - that the current situation is not sustainable.

ZDECHLIK: Democratic Senator Tony Lourey helped create MNsure. He likes the idea of letting Minnesotans shop outside of MNsure and still get subsidies, but...

TONY LOUREY: I'm not particularly optimistic that it would be approved. If it were approved, I think we would have to talk about - then how do we structure the financing of the exchange?

ZDECHLIK: Lourey says it would be even more difficult to fund the exchange with far fewer customers unless they could bring in new money. One option might be to add a tax on all health plans sold, not just those on MNsure. Meanwhile, with fewer people signing up for plans through MNsure than anticipated, revenue is way down. That, coupled with federal money drying up by year's end, has MNsure moving to cut $2.5 million from its budget over the next three years. For NPR News, I'm Mark Zdechlik in St. Paul.

JOHN DALEY, BYLINE: I'm John Daley in Denver. Colorado's exchange has cleared the political hurdles for the most part, but technical glitches and financial challenges can still trip it up. Case in point, Marc Drillings - he went to buy insurance on Connect for Health, Colorado's exchange. But when he went online to enroll, the system showed an error in his monthly premium, $800 for him and his wife. He tried to fix it, and his application got stuck in limbo for two months.

MARC DRILLINGS: You enter bureaucratic hell where no one can figure out what's wrong, how to fix it, or who to even talk to to get it done.

DALEY: He's a chiropractor, so he's used to dealing with insurance forms, but sorting it out took...

DRILLINGS: At least 50 hours.

DALEY: And eventually, he did enroll in a plan for about $300 a month. But as many as 10 percent of sign-ups had such problems. Fixing them chewed up staff time and cost millions, says Kevin Patterson, the exchange's interim CEO.

KEVIN PATTERSON: I think it's fair to say we do have a slight hit to the brand.

DALEY: His predecessor, Gary Drews, points out the exchange's successes. He says their enrollment numbers are strong and the state's uninsured rate has fallen to 11 percent. Still, Drews admits, the takeoff has been bumpy even in the second year.

GARY DREWS: It's a little bit like trying to fly as you're putting the wings on.

DALEY: The exchange faced expensive IT fixes to the sign-up system. There was leadership turnover, and state auditors questioned its financial oversight. And the big whammy - $183 million in federal startup money is running out. So the exchange plans to tighten its belt, and consumers will feel the pinch. Fees on premiums will go up next year.

ELLEN ROBERTS: I don't know if it's sustainable.

DALEY: That's Republican State Sen. Ellen Roberts from Durango. She heads a legislative oversight committee. She says another big issue for Colorado is Medicaid. A lot of people signed up, but the exchange footed much of the bill. Now the exchange wants the feds to pay some of those costs. The exchange had bipartisan support, but she says it's going to be hard to make the transition to self-sufficiency.

ROBERTS: Either we're going to try and make our best efforts to sort this out, or people will throw up their hands and walk away.

DALEY: Chiropractor Marc Drillings says despite hassles he faced, he won't walk away.

DRILLINGS: If it works for 95 percent of the population, that's still an A.

DALEY: So for now, the state is sticking with the exchange. But its success depends on fixing its problems in year three. For NPR News, I'm John Daley.

JEFF COHEN, BYLINE: I'm Jeff Cohen in Connecticut where the exchange has gone from startup to established business, and it's even marketing itself to other states that are still struggling.

JIM WADLEIGH: The call center is built. The website is built.

COHEN: And there's less to troubleshoot, says Access Health CT CEO Jim Wadleigh.

WADLEIGH: The first two years, we needed a much bigger call center to be able to answer questions and talk about how to navigate our website and things like that. We needed a much bigger technology team.

COHEN: So, Wadleigh says that now means changing and shrinking the organization to match its new mission.

WADLEIGH: All of our teams have gotten smaller.

COHEN: And the exchange is bringing in its own money, upwards of $26 million a year. That's from charging insurers who sell individual and small group policies on or off of the exchange. And there's the idea of selling its administrative services to other exchanges, too.

WADLEIGH: We have had some conversations with probably about a half a dozen states at this point.

COHEN: But with more than $150 million in federal money gone and not coming back, Wadleigh's got to keep squeezing his organization, and he's got two goals - one, keeping consumer prices as low as they can be, and two...

WADLEIGH: Continue to maintain the level of service that our customers have come to expect.

COHEN: And he's optimistic.

WADLEIGH: I think we're there.

COHEN: But that confidence comes at a price. Connecticut just voted to raise the tax that insurers will pay on each plan. For NPR News, I'm Jeff Cohen.

SHAPIRO: And this is part of a reporting partnership with NPR, local member stations, and Kaiser Health News.

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