The U.S. Supreme Court's decision to uphold premium subsidies through the federal exchange could spell the end of states establishing their own Affordable Care Act marketplaces. It could even prompt more states to turn over control of their exchanges to the federal government.
Before the subsidy ruling, only three of the 34 states relying on HealthCare.gov as their enrollment platform—Arkansas, Delaware and Pennsylvania—submitted plans to the CMS to become state-based marketplaces. But with subsidies safe for now through the federal exchange, experts say it's unlikely that more states will move forward with such plans.
“There is probably minimal incentive at this point to create an exchange from scratch,” said Sabrina Corlette, senior research fellow at Georgetown University's Center on Health Insurance Reforms.
The irony is that during the drafting of the Affordable Care Act in 2009, House Democrats wanted one federally run exchange to serve the whole country, while Senate Democrats wanted to give states more flexibility by letting them set up their own marketplaces. While the senators ultimately prevailed, some observers presciently questioned the viability of every state running its own exchange.
After last week's ruling, Pennsylvania's Democratic governor, Tom Wolf, said his state would withdraw its proposal to establish its own exchange. “I am pleased to say that we will no longer need to rely on this plan,” he said in a written statement.
Delaware, which has a Democratic governor and Democratic-controlled Legislature, is still debating whether to switch from having a federal-state partnership exchange to a fully state-run marketplace. Under the partnership arrangement, the state retains oversight on plan premiums and benefits while HHS oversees enrollment and health information technology.
