More than half of state-funded ObamaCare exchanges scrapped or on verge of collapse

There are some in Illinois who continue to beat the drum for establishing a state-funded health insurance exchange as part of the Affordable Care Act, commonly known as ObamaCare. But mounting evidence from around the country now confirms that Illinois lawmakers were wise when they didn’t dive in to adopt a state-funded exchange. Fourteen states...

There are some in Illinois who continue to beat the drum for establishing a state-funded health insurance exchange as part of the Affordable Care Act, commonly known as ObamaCare. But mounting evidence from around the country now confirms that Illinois lawmakers were wise when they didn’t dive in to adopt a state-funded exchange.

Fourteen states plus the District of Columbia opted to establish a state-funded health insurance exchange. Of those 15 ObamaCare exchanges, eight are either being scrapped or are on the verge of collapse, with some states reverting back to the federal ObamaCare portal.

But the most interesting story is found in Rhode Island, which isn’t facing an inoperable website or insurmountable glitches. Rhode Island is now considering defaulting to the federal exchange on the basis of the administrative costs required to maintaining its exchange.

At an estimated cost of $23 million per year in administrative costs required to operate their site, some lawmakers in the state are finding that this may be too-large a burden – especially since using the federal portal, healthcare.gov imposes no additional costs on the state.

It is also important to keep in mind that this is not money being spent on providing coverage or care for a single patient. Since the state would pay nothing to use the federal portal, money that the state would spend on its own state-based exchange would squeeze out state spending in other areas.

This is something that should be guiding your decision on whether to support adoption of a state-funded exchange here in Illinois.

In Illinois, previous estimates show that the state could spend over $100 million to operate its own site. The state is already facing a series of budgetary unknowns concerning implementation of the Affordable Care Act.

There is no upside for the state in adopting a state-funded ObamaCare exchange. Any supposed control or flexibility in operating its own exchange is lost through the numerous and onerous federal requirements. The downsides, as evidenced from experiences across the country, are clear.

Given that there is no requirement on Illinois to establish a state-funded exchange, Illinois lawmakers were wise to not embrace this ObamaCare ploy.