There is only one option for individuals seeking subsidies for their health insurance plans, and that’s to shop in the federal or state health insurance exchanges (dependent on the state that you live). There are currently 17 states that have their own health insurance exchanges, while 27 others use the federal health insurance marketplace. Only six have chosen to combine both into a hybrid exchange.
When the Affordable Care Act was first created, it was assumed that the majority of the states would opt for their own state-run exchanges given the tremendous amount of federal dollars and support that would be provided to assist states. What also wasn’t expected was for the state-run exchanges to outperform the federal-run exchanges. What we’ve been witnessing is the federal marketplace falling steadily behind the state-run marketplaces.
Why State Exchanges Are Fairing Better
There was about $4 billion in federal funding available for states to use for their health insurance exchanges. Those that adopted this route received substantial support for their programs. The federal exchange, on the other hand, created a federally-run interface system that cost a whopping $400 million. But despite this hefty price tag, the system has been buggy and faulty, with numerous crashes and log-in issues.
Aside from having better websites, some state exchanges have proven to go above and beyond the Affordable Care Act’s minimum requirements. State exchanges tend to have more insurers within their marketplaces as well. The states had an earlier head start (mostly due to the fact that the ACA was tied up in courts for a few years awaiting legal rulings determining its legality before much of the program could begin development) and shown more enthusiasm for their programs, so it’s no surprise that they offer more options to policy holders.
Another reason states are fairing well is because of their geographic location. The states with smaller populations only have one or two insurance agencies dominating the area, leading other insurers to stray away. These same areas happen to be federally-run.
So which state health exchanges are doing well?
California first opened its state-based health insurance exchange known as Covered California in 2014. An indicator that this program works well is the sheer numbers of enrollees. More than two million people have used the state marketplace to obtain insurance and over 1.3 million are still enrolled in health insurance plans through the exchange.
The uninsured rate in the state has dropped down to 12.4 percent from 17.2 percent. California was also the first state to build a state-run marketplace and have built one of the biggest marketplaces in the country. Their website has been pretty much glitch-free from the start.
Access Health CT is the name of the health exchange in Connecticut. They too have created a stable system and website for residents to purchase health plans. They rolled out their program in 2013 and have since seen their uninsured rate drop by 50 percent (since 2012). The uninsured rate back then was 7.9 percent and subsequently dropped down to 4 percent.
Before Connecticut rolled out their health insurance exchange, there were 286,000 uninsured people in the state. This number dropped down to 147,166 the following year. The CEO of the exchange shared that they were seeing nearly a 25 percent increase from the second year to the third year. Year three saw nearly a 15 percent increase. The increases are believed to be due to the four to six percent decrease in premiums.
The state doesn’t boast the highest enrollment numbers, but it has had one of the smoothest launches. It had a little under 4,000 enrollments into private plans and the Medicaid program called HUSKY. Numbers show that one-third of enrollees are under 35 years old and half of them are buying mid-level silver plans, with the others purchasing gold or bronze plans. The state exchange is keeping a close eye on the data, which shows which carriers individuals are purchasing plans from and how well the marketplace is performing overall. The good news is that the more young and healthy people that sign up, the lower the premiums will be for all enrollees.
In 2014, New York made the headlines for its goal to get 1.1 million citizens to sign up for health insurance using their exchange by the end of 2016. Surprisingly, the state surpassed this goal within their second open enrollment period. There were over 2.1 million people that used the marketplace, known as the NY State of Health. This represents ten percent of the state’s population. This is a two-fold increase since the first open enrollment.
More stats for the state to boast about include 89 percent of the enrollees in their exchange weren’t insured before and almost 75 percent of enrollees were receiving financial assistance. The average credit amount was $220 monthly.
Washington state started off rocky, but got their bearings after witnessing extreme site issues. The site went down within hours of launching and was down for a whole two days. Providing a great user experience was more important than waiting it out, so the CEO decided to pull it down to be fixed. The system is continuing to be monitored to ensure citizens have continuous access to affordable plans.
Kynect, the name of Kentucky’s state-run health insurance exchange, has been written about quite extensively since its launch. It launched flawlessly and had great numbers of enrollees. There were 26,174 citizens that enrolled into Medicaid or private insurance plans.
It’s believed that there are a number of factors that play into the smooth sailing Kynect experienced. For instance, the efficient website and the strong cooperation between state agencies that were involved in the initiative made a significant impact on overall success. The fact the state didn’t advertise that it was a part of the President Obama’s health care law may have also helped. In this state, a lot of citizens weren’t too fond of Obamacare.
Alabama is one of the few states that offers its citizens the best prices under Obamacare. After subsidies have been applied the average savings per month is $266. This brought health plans down to $88 monthly on average.