States across the country are scrambling to find a viable model to fund their Obamacare insurance exchanges in 2015, when the healthcare reform law weans state-run exchanges from federal support and requires them to be financially self-sufficient.
While many of the 14 states running their own individual-market exchanges will have leftover federal dollars to use to ease the transition to financial independence, finding a politically acceptable funding scheme is proving a vexing problem.
“The reality is that sustainability is now rearing its ugly head,” said Dan Schuyler, director of exchange technology at the consulting firm Leavitt Partners. “Twelve months ago it wasn't an issue because states were really just scrambling to build these exchanges.”
States have received $4.7 billion in exchange funding from the federal government, according to the Kaiser Family Foundation, with 16 getting more than $100 million each. But new federal grant dollars disappear after this year.
Efforts to establish funding mechanisms were made politically harder by the technology problems many state-run exchanges experienced. To save money, some critics in states with troubled exchanges have urged switching to the federal exchange. Two states with botched exchanges, Oregon and Nevada, have decided to use the federal exchange for 2015.