July 25, 2014 | Angelique Hrycko

Low Enrollment, High Costs Push States to Lift Fees, Mull Move to Federal Platform

“At that point, it might be cheaper for the feds to loan [a state exchange] some money than for them to convert them [state exchanges] to the federal platform,” suggests Rosemarie Day. Additionally, Day agrees that an FFE state could move to a state-run model, but says some federal startup funding might be needed. State lawmakers, she explains, might determine that they can run the marketplace more efficiently than the feds. Rather than the one-size-fits-all approach of the FFE, “a state exchange can tailor its approach to selecting [qualified health plans], designing products to meet their consumers’ needs, and improving the consumer interface on the website”. They could also do a more focused job of outreach in targeted areas, such as underserved populations. To justify startup funds, a state would first need to convince HHS that such a strategy would translate to more members and higher revenues.

Download the July 2014 newsletter of Inside Health Insurance Exchanges to read more.