The clock is ticking for various state legislatures that are pondering a change in the way their residents enroll in public health insurance exchanges ahead of the widely anticipated June ruling in King v. Burwell on whether federal subsidies will be scrapped in 34 states that rely on Healthcare.gov for signups.
One such example is a joint resolution from Republicans in the Nevada Assembly and Senate, who want to dissolve the Silver State Health Insurance Exchange, which enrolled 74,000 residents during the 2015 open-enrollment period.
Don Gustavson, a state senator representing Washoe County, and Brent Jones, an assemblyman representing Las Vegas, are leading the charge. The outcome, of course, remains to be seen, especially since the legislative session ends June 1 and Nevada Gov. Brian Sandoval was described in a recent Nevada Public Radio report as “one of the first Republican governors to support the health care exchange and embrace Medicaid expansion.”
Trish Riley, executive director of the nonpartisan National Academy for State Health Policy, considers the proposal interesting because Nevada’s HIX already negotiated a shared responsibility with the federal government and relies on Healthcare.gov for IT support – something New Mexico is currently attempting to do, while Oregon also made the transition.
Even more intriguing is that Nevada is one of 11 states considering legislation to eliminate their exchange operation or prohibit the establishment of a state-based exchange, while another 11 states have proposals pending to transition from Healthcare.gov to a state or partner-based model, according to Riley.
“It reflects the politics in each state and the partisanship of the ACA itself,” she observes. “It also reflects how hard it is to really set up one of these exchanges in some of the smaller states.”
There’s obviously a sense of urgency to act, given all that’s at stake in King v. Burwell. She notes that “most state legislatures are drawing to a close or have closed, particularly in the smaller states. So it’s right down to the wire, and I think some states are trying to hold off as long as they can to beat the court if a decision comes out before the legislature has to end.”
Anticipating a possible cart-before-the-horse scenario, she says Maine’s legislature incorporated automatic sun-setting language into its proposal “in the event that the court rules for the government.”
“If the court rules that the subsidies go away immediately or soon, that’s a big lift for states,” Riley explains, “which is why you’d see congressional discussions about whether they should do something to extend the subsidies for a year, and that makes sense.
“But some of those congressional proposals would extend them as vouchers,” she continues. “All of these things take time to start up, and you have to remember that there are thousands and thousands of people who are getting subsidies today in every state, and you can’t just withdraw those overnight.”
She says another issue, and unintended consequence of such a ruling, is that individual health insurance markets would experience “a death spiral.”
Healthcare.gov represents a reasonable alternative to state-run exchanges that wasn’t available during the HIX enrollment’s maiden voyage, opines Robert Booz, a health care analyst with technology consultant Gartner. “The big issue for a lot of exchanges is their economic sustainability,” he says. “Where are they going to get the operating capital they need for the out years?”
In the meantime, Booz believes that health plans participating in public exchanges may consider focusing more resources on compliance, as well as “investing in flexible architectures and applications.”