Washington’s Health Benefit Exchange, the state-run marketplace hundreds of thousands of residents have used to enroll in healthcare plans under the federal Affordable Care Act, is asking the Legislature to raise its spending authority from $80 million to $147 million for the 2015-2017 biennium.
The exchange says it needs to ramp up spending to pay for staff and improve technology as an estimated 200,000 new residents enroll in plans, joining the 1.2 million Washington residents already enrolled through this marketplace. The next open enrollment period begins Nov. 15.
But it’s also facing a budget shortfall of $10 million, possibly up to $26 million, over the two-year biennium, health care regulators said in a meeting of an advisory committee to the exchange’s board of directors last Thursday in Olympia.
The exchange can, with the Legislature’s approval, drum up the extra money by hiking an assessment carriers pay to participate in the exchange, or taxing or assessing managed Medicaid plans. It could also shift out money that’s leaving accounts by the end of fiscal year 2015, according to the advisory committee.
The Office of the Insurance Commissioner has already signed off on rates for 2015, covering 90 plans from 10 insurance companies, which were approved at the current assessment levels. That’s almost twice as many plans as were offered last year, according to OIC.
The proposed near-doubling in spending may be troubling to state lawmakers, even those supporting the thrust of the federal law, as the Legislature looks to clamp down on costs, including potentially asking for 15 percent cutbacks from state agencies.
“This is tough,” said Mark Stensager, a member of the advisory committee. “This is going to be a tough sell, generally. There’s no magic on this side.”
But other members of the advisory committee said the additional funding would go to aggressive marketing and new enrollment, broadening the revenue pool and bringing in new dollars to help close any future budget gaps.
In preparation for the rollout of the federal law in 2013, the Legislature gave the exchange three revenue sources — using a 2 percent premium tax that health insurance companies pay for participating in the exchange, a per-member, per-month assessment on carriers, and Medicaid cost allocation.
That’s estimated to provide $137 million over the next two years, including $53.9 million from the premium assessment, $37.4 million from Medicaid, and $29.5 million from the carrier assessment.
Another $16 million is included from the state’s share Medicaid cost allocation, but that may be dollars that could be double-counted, widening the potential shortfall if they don’t materialize, a member of the advisory committee said Thursday. The exchange board will be meeting with the Office of Financial Management this week to hash that out.
If not, the exchange is facing a $9.9 million shortfall over the next two years, and its board is looking to drum up additional revenue.
Before anyone signed up for plans, the Legislature set the exchange’s funding at $40 million annually, or $80 million for the 2015-2017 biennium. That’s no longer sufficient, and won’t provide the money needed to manage call centers, thus increasing wait times, with bare bones marketing efforts, minimal assistance to help enroll residents, and cutbacks in staff.
House Finance Chairman Reuven Carlyle, D-Seattle, wrote on his blog last month that even the biggest supporters of Obamacare, including himself, have to be doubtful of this request, which he called “astonishing.”
“The progress is troubling at best,” Carlyle wrote. “When state and federal resources are combined, it appears on the surface that the exchange is spending more than $60 million a biennium on IT systems. But since the exchange isn’t a direct public agency in a traditional sense, it’s difficult to have strategic or enterprise level oversight, purchasing or accountability at the legislative level.”
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