Nearly a decade ago, many states failed to create their own independent state-based health insurance marketplaces. Today, they are ready to try again.
When President Barack Obama’s Affordable Care Act (ACA, or “Obamacare”) was passed nearly a decade ago, the goal was for states to launch their own certified health insurance exchanges. These exchanges were intended to offer individuals and small businesses the opportunity to compare policies and choose from a range of affordable plans. They were supposed to be easily navigable and simplify enrollment. On top of the generous federal financial support that states received to build their exchanges, federal subsidies were also promised to those looking to enroll.
Nearly ten years later, there are only 13 state-based marketplaces in operation, according to a survey by Kaiser Family Foundation. When states attempted to launch their marketplaces in 2013, they did not work out as intended. Websites did not work, data could not be accessed, and call centers were overwhelmed. Furthermore, states spent millions of dollars on quick fixes that were ultimately unsuccessful. As a result, most states abandoned their plans to build independent exchanges and adopted the federal marketplace, Healthcare.gov. Today, 32 states rely on this federal platform, while six use a federal-state partnership.
However, at least six states – Maine, New Mexico, New Jersey, Nevada, Oregon and Pennsylvania – are ready to try again. These states are either creating their own marketplaces or seriously considering doing so. Officials in these states are confident that they will be successful the second time around, as they are equipped with better knowledge of the process than before. In recent years, vendors have also developed better software and other technology to support health insurance exchanges.
“A lot of kinks have been worked out, and the ability to set up marketplaces that run effectively and efficiently has gone up,” said Jeanne Lambrew, commissioner of the Department of Health and Human Services in Maine. Lambrew and other state officials are hoping to launch an independent exchange in Maine by 2021.
Pennsylvania also hopes to launch its own marketplace in 2021. “We know our markets and our consumer and our carriers best,” said Jessica Altman, the state’s insurance commissioner. “We believe we can leverage that information to make the experience of seeking health insurance more consumer-friendly and provide plans that are more affordable.”
States like Maine and Pennsylvania that are still in the planning process can follow Nevada’s example. Nevada’s independent marketplace – Silver State Health Insurance Exchange – launched in September 2019. “Nevada spent two years working with our colleagues in other state-based exchanges,” said Janel Davis, spokesperson for the state exchange, “looking at the mechanics of their operations to understand not only what would be required for Nevada’s own implementation, but also to understand what efficiencies could be achieved.”
Indeed, as states move towards creating their own marketplaces, interested vendors should expect solicitations for system development, as well as for operations and maintenance. GovWin is currently tracking over 20 upcoming opportunities related to health insurance exchanges. The complete list of these opportunities can be found here.