State Experience with ACA Exchanges

VII. Key Issues: Regulation & Reform >> C. Health Reform >> Affordable Care Act (ACA) >> ACA and Government >> ACA and States >> ACA Health Exchanges >> State Experience (last updated 11.6.17)

Topic Outline


This page addresses the experience of states that opted to establish their own ACA exchanges, as opposed to those defaulting to the federal exchange.

Individual States

Within topic categories, items generally are presented in reverse chronological order so that latest news is easily visible.

Arkansas (not established)

According to Kaiser Family Foundation, on April 23, 2013, Arkansas Governor Beebe signed HB 1508 which authorized the transition of the state’s health exchange “from a state-federal Partnership Marketplace to a State-based Marketplace to take effect on July 1, 2015.” Arkansas was awarded a $99 million federal grant to set up the exchange, but “last year Hutchinson said development of the exchange was ‘on pause’ until he could determine whether the reforms the state would seek would require a state-based exchange.” Hutchinson ruled out such plans in late-February, 2016.

“Responding to Sen. Cornyn, Centers of Medicare and Medicaid Services (CMS) Acting Administration Andrew Slavitt wrote, ‘as part of CMS’s routine federal oversight of (exchanges), CMS found that the Arkansas SBM spent approximately $1 million of the state’s federal grant funding for activities that are not allowed under regulations.’” (Red State, 2.18.16)

California (financially troubled)

Solvency Concerns

  • What ACA Ruling Means for Covered California. Prediction: “California will decide to wind down the failing Covered California Obamacare exchange and transfer its operations to, the federal exchange. That won’t solve any of the fundamental problems of Obamacare itself, but at least it will relieve the state of a problem child…With 1.4 million signing up in the 2015 open season, enrollment is 300,000 lower than previously estimated. Indeed, it is almost exactly the same as the number of enrollees at the end of the first open season last year. Covered California cheers itself for enrolling almost half a million new people this year, but soft-pedals the fact that the same number dropped out between the close of 2014’s open enrollment and the start of 2015’s. It seems as though 1.4 million enrollees is the high-water mark for Covered California…instead of earning its projected 2018 budget of $300 million to $340 million, Covered California’s revenue will be unlikely to top $220 million. And that is if everyone who signs up stays enrolled. We know that about one-third of those who sign up in open season drop out during the year. The sooner Covered California winds up, the better for Californians.” Graham, John. (Orange County Register, 7.5.15)
  • Budget Cut Amid Slower Enrollment Growth. “After using most of $1 billion in federal start-up money, California’s Obamacare exchange is preparing to go on a diet. That financial reality is reflected in Covered California’s proposed budget, released Wednesday, as well as a reduced forecast calling for 2016 enrollment of fewer than 1.5 million people. The recalibration comes after tepid enrollment growth for California during the second year of the Affordable Care Act” (Los Angeles Times, 5.13.15).
  • $80 Million Deficit for 2015-16. “California’s exchange is facing an $80 million deficit for its 2015-16 fiscal year, even though the law requires it to be self-sustaining. According to the Orange County Register (4.22.15), this year ‘just might prove to be the tipping point for the state’s two-year-old health insurance exchange… if it continues to run yearly operating deficits, it will not long survive.'”

Low Enrollment

  • Obamacare: Are Covered California’s Numbers Plateauing? “Although the latest numbers don’t say how many people have paid for their plan to complete their enrollment — the only figure that really counts and which will be available in a few months — some experts say that the net gain from last year’s 1.3 million total could be minimal. Roughly one of 10 people who sign up for an exchange plan don’t complete their enrollment. So Covered California’s projected total for the latest enrollment period could easily wind up around 1.4 million — about 100,000 more than last year. ‘The national numbers showed only an 8.5 percent increase in Obamacare enrollment during the 2016 open enrollment,’ said Robert Laszewski, a nationally renowned health care policy expert. ‘It is clear that Obamacare enrollment is plateauing both in California and nationally.’’’ (San Jose Mercury News, 2.17.16)
  • 2015 Enrollment 18% Below Target. “The state ended open enrollment in February [2015] with 1.4 million people signed up, far short of its goal of 1.7 million… ‘We are seeing higher attrition and ongoing difficulties in bringing new people into the market,’ said Caroline Pearson, senior vice president at Avalere.” (Los Angeles Times, 5.13.15)
  • 2015 Enrollment 4th Lowest in Nation. “Enrollment has disappointed officials. In fact, 2015 enrollment grew by just 1 percent. California also had the fourth lowest re-enrollment rate in the country at 65 percent (Freedom Works, 5.1.15).  ‘It’s a tiny fraction of the growth they were expecting,’ says an official who helped implement the Affordable Care Act and examined California’s numbers.’” (Daily Signal, 4.20.15)

Plan Costs

  • Covered California Health Plan Rates To Jump 13.2 Percent In 2017.Covered California’s two largest health insurers, which cover more than half of its 1.4 million enrollees, drove the statewide increase. Blue Shield of California said its premiums were going up 19.9 percent, the highest statewide increase. Anthem Inc., the nation’s second largest health insurer, said it had an average increase of 17.2 percent in its Covered California plans. HMO giant Kaiser Permanente, in contrast, posted an average increase of 6 percent… Among the 19 regions served by Covered California, the one encompassing Monterey, San Benito and Santa Cruz counties had by far the largest average increase in premiums — 28.6 percent. The smallest, 8.4 percent, was in the region that includes San Joaquin, Stanislaus, Merced, Mariposa and Tulare counties.In Los Angeles County, which spans two different rating regions, the increases run from 13.9 percent to 16.4 percent. Premiums in San Francisco are slated to rise nearly 15 percent on average.” (Kaiser Health News, 7.19.16)
  • Obamacare’s Best is not Good Enough. “The results of a recent poll conducted by the University of Southern California (USC) and the LA Times make it clear there is far from a consensus on the quality and affordability of healthcare in the Golden State. Less than half of those surveyed (44%) felt that healthcare in California was good or excellent, while a plurality (48%) felt that healthcare in the state was fair or poor. Their concerns are well-founded, too. Contrary to expectations, a large portion of California’s newly-insured under Obamacare were enrollees in the state’s Medicaid program, Medi-Cal. Official projections for Medi-Cal enrollment prior to the state’s expansion of Medicaid were about 1.5 million over of the first year. Yet more than 4 million residents signed up for the program during that time. As a result of this rapid expansion, one out of every three Californians is now enrolled in a program originally designed only for California’s poorest and most vulnerable residents, and the entitlement is crowding out other state budget priorities.” (Forbes, 6.22.16)
  • Covered California’s Affordability Problems. “A disquieting 44 percent of enrollees said they have difficulty paying their monthly premiums. That’s despite the fact that 88 percent of Covered California enrollees ‘receive federal subsidies to lower their monthly premiums.’”  (Orange County Register, 6.2.15).

Customer Satisfaction Problems

  • Low Satisfaction Ratings. Covered California Exchange earns low customer satisfaction ratings on Yelp and Get Human.
  • Californians Gripe About Obamacare Enrollment Snags, Lack of Doctors. “Nearly 1,500 Californians have complained to state regulators in the last four months about their Obamacare coverage purchased through California’s insurance exchange. New data reveal the biggest category of complaints centers on getting confirmation of health plan enrollment and basic issues such as getting an identification card to obtain care. Many consumers have also encountered difficulty finding a doctor who accepts their new coverage, as well as frustration with inaccurate provider lists, according to the California Department of Managed Health Care. ‘If you have a medical condition and can’t get care that is a very serious issue,’ said Marta Green, spokeswoman for the managed healthcare agency. ‘We are still working to resolve many of these cases.’” (Los Angeles Times, 5.23.14)

Poor Management

  • Obamacare Bait-and-Switch Bludgeons Californians. “‘Thousands of people enrolled in Covered California face higher-than-expected bills from their insurers because the exchange sent incorrect tax credit information to the health plans.’ That’s the latest from health reporter Emily Bazar, now with Kaiser Health News. As she explains, Covered California, the state’s Obamacare system, send the wrong tax information for 25,000 policy holders, meaning ‘higher premiums than consumers initially anticipated.’… Bazar had previously charged that Covered California was responsible for ‘widespread consumer misery,’ raising rates 13.2 percent this year, booting people off plans, making it more difficult to cancel policies when people go on Medicare, and other woes. Covered California blamed the $454 million computer system, but had no trouble dishing out $184 million in contracts, without competitive bidding, to firms and people with ties to Covered California bosses. When it comes to prodigious waste, the system functioned just fine.” (MyGovCost, 1.26.17)
  • How Covered California Abuses Pregnant Women. In her most recent report, Bazar explains, ‘between October 2015 and May of this year, about 2,000 pregnant women were automatically dropped from their Covered California plans and placed into Medi-Cal, even though they had the right to stay with the state insurance exchange. Some women lost their established doctors or missed prenatal appointments.’ This happened because, ‘the Covered California computer system wasn’t programmed to give them the choice, and some pregnant women in that situation were moved immediately into Medi-Cal.’ This ‘snafu’ prompted 16 members of California’s congressional delegation, ‘to call on Covered California to quickly fix the problem.’ And Bazar shows how they jumped into action… ‘The fix comes nearly a year after the problem began.’ That is, nearly a year after 2,000 pregnant women lost their established doctors and missed prenatal appointments. Nearly a year is longer than a pregnancy. How’s that for performance and accountability.” (MyGovCost, 11.8.16)
  • Room for Improvement: Consumers’ Experience Enrolling Online with Covered California. “This report describes findings from direct, unscripted observations of people attempting to enroll online during the second and third open enrollment periods (2014-15 and 2015-16). This real-time consumer user research captured the challenges that participants experienced. Across both years, few study participants were able to complete an online renewal or enrollment during the research session. Common problems included: Many participants spent a significant amount of time reviewing plan options in the ‘window shopping’ parts of the website, not realizing that actual plan choice occurs only in the application; Unclear guidance and questions related to income and household size resulted in errors in critical sections of the application; Poorly designed online forms and processes frustrated users and diminished their confidence in the site.” (California Health Care Foundation, February, 2016)
  • Auditor Questions No-bid Contracts at Covered California. “California’s state auditor on Tuesday questioned the use of no-bid contracts at Covered California, which spent nearly $200 million without seeking competitive bids during a three-year period. While the agency has significantly reduced its reliance on no-bid contracts, State Auditor Elaine Howle found Covered California waited until January to comply with a bill passed last summer requiring tighter contracting rules at the agency. Howle’s office found California’s health insurance exchange issued 64 no-bid contracts worth nearly $200 million through June 30 – about a fifth of the nearly $1 billion in contracts issued during the three-year period…Covered California’s contracting practices have come under scrutiny before. The Associated Press reported in 2014 about Covered California’s heavy use of no-bid contracts, some of which went to people with previous professional ties to Covered California’s executive director.” (KCRA News, 2.16.16)
  • Incompetence, Mismanagement Plague California’s Obamacare Insurance Exchange. “Whether it’s falling far short of 2015 enrollment goals or sending out 100,000 inaccurate tax forms, Covered California is struggling with its share of challenges. Now, several senior-level officials integral to the launch of Covered California—who enthusiastically support the Affordable Care Act—are speaking about what they view as gross incompetence and mismanagement involving some of the $1 billion federal tax dollars poured into the state effort.” (Daily Signal, 4.20.15)

Limited Networks

  • Medical Homelessness in  California: Patients Say They Can’t See A Doctor. “Dr. Kevin Grumbach of UCSF called the phenomenon ‘medical homelessness,’ where patients are caught adrift in a system woefully short of primary care doctors. ‘Insurance coverage is a necessary but not a sufficient condition to assure that people get access to care when they need it,’ Grumbach said. Those who can’t find a doctor are supposed to lodge a complaint with state regulators, who have been denying the existence of a doctor shortage for months. Meanwhile, the sick and insured can’t get appointments. ‘What good is coverage if you can’t use it?’ Nguyen said. Experts said the magnitude of the problem is growing, and will soon be felt by all Californians.” (CBS San Francisco, 4.18.14)

Colorado (considering shut-down)

Insurers Leaving Market

  • On 6.6.16, the Division of Insurance announced the withdrawal of several companies from the individual market for 2017. “Around 92,000 people with individual plans from UnitedHealthcare, Humana Insurance, RMHP and Anthem will need to find other coverage for 2017 during open enrollment, Nov. 1, 2016–Jan. 31, 2017. This represents approximately 20 percent of the 450,000 Coloradans who get their insurance through the individual market.”

Higher-Than-Expected Costs

  • “In general, the companies have indicated that the people enrolled in individual plans have used more healthcare services and with greater frequency than anticipated,” said Commissioner Salazar (6.6.16). ‘While the DOI will evaluate information provided by the companies to determine if their requested premium increases are correct, all of us in the industry must tackle the more pressing question of what is driving the increased health costs in the individual market that lead to higher premiums.’”

Lax Security

  • ‘Numerous Weaknesses,’ ‘Inadequate Security Settings’ Found in Colorado Obamacare Exchange. “The Obamacare health exchange in Colorado faced ‘numerous weaknesses’ and had ‘inadequate security settings,’ leaving the personal information of enrollees vulnerable, according to a new audit. The inspector general for the Department of Health and Human Services publicly released its review of Connect for Health Colorado on Wednesday, revealing the exchange had inadequate security measures in place for more than a year. The report, which reviewed information security controls as of November 2014, did not go into specifics of Connect for Health Colorado’s vulnerabilities because of the ‘sensitive nature of the information.’ However, the report is able to reveal that the exchange’s security deficiencies were significant and could have compromised the personal information of Coloradans…The Colorado health exchange cost taxpayers more than $184 million to create, the audit said.” (Free Beacon, 2.17.16)

Political Opposition

  • Lawmakers Question Future of Health Exchange. “Sen. Ellen Roberts, R-Durango, who heads the legislative oversight board, said she has not decided yet whether it’s worth saving the state’s troubled health exchange. ‘There’s been some chatter. Are we really trying to help you or trying to sink you? We don’t know yet,’ said Roberts. She questioned whether a part-time, volunteer board is capable of properly setting up and monitoring Colorado’s health exchange.” (Health News Colorado, 5.13.15)
  • One-Size-Fits All a Waste of Taxpayer Money. “Republican legislators have banded together to try to get the exchange repealed, claiming that it bleeds taxpayer money on a one-size-fits-all model that doesn’t work…Joshi thinks one of the exchange’s greatest failings is effectively forcing people to sign up for some aspects of coverage they don’t want. Insurance obtained through the exchange offers a minimum $5,000 deductible, which drives Coloradans to emergency rooms to avoid having to pay up-front for medical visits, Joshi said.” (The Gazette, 1.16.15).

Solvency Concerns

  • Annual Costs More Than Double Expected Amount. “In 2012, the Colorado exchange predicted that its 2015-2018 expenditures would be $22 to $26 million. The exchange’s 2015-2016 Strategic Plan and Budget now predicts operating expenses of $53 million in fiscal year 2015 alone. Going forward, operating expenses are predicted to be about $45 million a year with 78 employees. By the end of 2015, the exchange will have also consumed over $272 million in public start-up funds” (Complete Colorado, 7.23.15).
  • Sustainability in Doubt. “Although it had bipartisan support, Colorado’s exchange faced expensive technical fixes, leadership turnover and questions from state auditors about its financial controls. Add to that the big whammy: $183 million in federal startup money is running out. So the exchange plans to tighten its belt and consumers will feel the pinch. Fees on premiums will go up next year. ‘I don’t know if it’s sustainable,’ said Republican state senator Ellen Roberts, who heads a legislative oversight committee. She says another big issue for Colorado is Medicaid. The state had a smoother signup process for Medicaid than many other states, and the exchange footed much of the bill. Now the exchange is asking the feds to pick up some of those signup costs. Roberts said it’s going to be hard for the exchange to make the transition to self-sufficiency. ‘Either we’re going to try and make our best efforts to sort this out, or people will throw up their hands and walk away,’ she said” (Kaiser Health News, 6.4.15).
  • User Fees May Need to be Tripled. “Managers at Connect for Health Colorado earlier this week recommended hiking the user fees from 1.4 percent to as high as 4.5 percent to fund about $54 million a year in expenses, a huge jump from long-promised costs of $26 million a year. At the same time, exchange managers also are pushing for a separate hike in assessments on all health insurance customers in the state — even those who buy insurance outside the state exchange” (Health News Colorado, 5.13.15).
  • Higher-Than-Expected Expenses. “Colorado’s severe technology issues are costing more time and money than officials had budgeted for. For example, glitches with the website are causing this year’s “budget for the exchange’s call center” to soar from $13.6 million to at least $21 million, according to the Denver Post. Officials had predicted annual budgets of $26 million, but now are budgeting between $34.5 and $44.1 million.” (Freedom Works, 5.1.15)
  • Exchange Board Chair Has ‘Doubts’ About Health Exchange Future. “The chair of the board of Connect for Health Colorado, the state health insurance exchange, expressed doubts about the organization’s ability to become financially viable in a meeting with state lawmakers Wednesday. During a conversation about the board’s search for a new CEO and executive team, board chair Sharon O’Hara expressed confidence in the ability of their chosen finalist Robert Malone to right the ship, saying that he has experience turning around troubled companies. Then she added a qualifier. ‘If this is doable,’ O’Hara said. ‘He can make it happen.’ That prompted Sen. Beth Martinez Humenik (R-Thornton) to reply, ‘You said if this is doable?’ ‘I have my doubts on good days,’ O’Hara responded. ‘Today is not one of my good days.’” (KUSA 9 News, 4.8.15)
  • Insurance Fee Increase Needed. “Colorado’s health insurance exchange needs a fee increase to remain financially sustainable, an outlook adding to lawmakers’ concerns about the embattled exchange’s future. The assessment by Gary Drews, Connect For Health Colorado’s interim chief executive, comes as the exchange is forced to operate without the use of federal funds, as stipulated under the Affordable Care Act… The fees would apply to most policies in Colorado, including those obtained through and outside the exchange… All of this comes just days after the health exchange needed to spend an additional $322,000 through the end of February to help fix problems with the website” (The Gazette, 1.16.15).

Financial Mismanagement

  • Colorado Obamacare Marketplace Misused $9 Million In Grant Funds. “Due to ‘a lack of adequate stewardship of federal funds,’ the Colorado marketplace spent $9,678,635 of the grant funds in unallowable ways, the IG said in the report. For example, the Colorado marketplace spent $171,891 on performance bonuses for senior staff, but didn’t provide documentation of a work evaluation for most of them. When the marketplace did have evaluation forms to present to the IG, the documents weren’t signed. The bulk of the misused money was spent on contracts that weren’t properly awarded or managed. The IG found that $4.4 million worth of contract expenditures were ‘inadequately documented.’”  (Daily Caller, 12.30.16)
  • Lax Financial ControlsAccording to Modern Healthcare (1.10.15), “An independent audit of Colorado’s marketplace released in December found lax financial controls resulting in questionable payments and contracts.”
  • Nearly One-Quarter of Exchange Funding “Problematic.” “A scathing audit of Colorado’s health exchange uncovered more than $32 million in problematic spending of federal tax dollars and possible illegal use of tax money to pay for barred activities such as lobbying and marketing. The problematic spending accounted for nearly one of every four dollars the exchange had spent as of May when the audit period ended. Altogether, Connect for Health Colorado is slated to receive at least $177 million in federal funds and by the end of May, managers had spent $136.5 million. Lawmakers on the state’s bipartisan audit committee called the financial mismanagement the ‘tip of the iceberg’ and pledged to support a more extensive exchange audit in 2015. A measure supporting a follow-up audit could move forward from the Colorado legislature’s audit committee as soon as tomorrow.” (Health News Colorado, 12.8.14)

Low Enrollment

  • Only 2% of Uninsured Covered. “When the exchange hired Gruber and Associates to predict enrollment in 2011, officials estimated that 470,000 lives would be covered by subsidized policies in 2016… the Colorado exchange has covered between 7,200 and 13,000 previously uninsured people, less than 2 percent of the Coloradans said to have been uninsured prior to Obamacare. Most of the people receiving the subsidized policies used them to replace private coverage” (Complete Colorado, 7.23.15).
  • Low Enrollment May Necessitate Bailout. “Enrollment numbers have been so low that former board member Ellen Daehnik has speculated that the exchange will need a bailout” (Freedom Works, 5.1.15).

Poor Design

  • Medicaid Eligibility Bottleneck. “You go to the website, examine the policies with your tax credit estimate in place, then get ready to actually apply for the credit. Here’s where it gets really crazy. If you want to get the tax credit applied to your monthly premium, you first have to apply for Medicaid, and then be rejected by the Medicaid office!  It’s in the Medicaid office where the entire system collapses! Let me be clear from the start, I don’t want Medicaid and I’m not eligible for Medicaid, but I still have to apply. On Oct 11 I applied for Medicaid… After waiting 6 1/2 weeks and not seeing any change in my application status, I decided I needed to call and find out what was going on… All of this because someone decided to UNNECESSARILY dump 10 times the normal work load on a Medicaid office which was already broke.” (Daily KOS, 12.4.13)

Technical Glitches

  • Technology Glitches Very Costly. “Colorado’s severe technology issues are costing more time and money than officials had budgeted for” (Freedom Works, 5.1.15) [see specifics at Solvency Concerns].
  • Health Insurance Brokers Reporting Problems with Enrollment Site. “Brokers and agents in the field continue to report serious problems with online enrollment at Connect for Health Colorado, the state health insurance exchange established under the Affordable Care Act“ (Denver Post, 12.16.14).

Wide Premium Disparity

  • Disparity in Health Plan Prices Underscores Ambitions, and Limits, of Affordable Care Act. “At first glance, Colorado would seem to be one of the federal health law’s clearest success stories, offering nearly 200 plans and average premiums nearly unchanged in the coming year. But zoom in closer, and it is clear that a kind of pricing pandemonium is underway, one that offers a case study of the ambitions and limits of the Affordable Care Act during this second year of enrollment. An analysis by The New York Times shows, for example, that the cost of one midlevel silver plan in Colorado rose 36 percent west of the Rocky Mountains this year, while another dropped nearly 40 percent in the northeastern plains. The law was intended to drive prices lower and broaden coverage through competition. While 10 insurers offer plans to individuals in Colorado through the state’s online marketplace, the law does not require insurers to offer all plans in all regions of a state. The wild disparity in prices results from many insurers trying to attract more customers by pricing plans as low as they can. But it is not at all clear that the low prices will be sustainable, so prices may well swing sharply upward as time goes on. (New York Times, 1.19.15)
  • Consumers With Subsidized Coverage will See their Share of Premiums Rise an Average of 77 Percent in 2015 if they Keep the Same Plans. “According to an analysis done for the Colorado Division of Insurance, the average share of costs for customers receiving tax credits in 2014 was $161.79 a month. In 2015, if they keep the same plans, their average share of costs after tax credits will be $281.01. That means shop until you drop the price, Connect for Health Colorado director Gary Drews said Monday at a press briefing on 2015 rates.’It puts the onus on the consumer,’ Drews said.” (Denver Post, 10.27.14)


  • Growing Pains for State Obamacare Exchanges. “Connecticut’s exchange did so well in the first year that it’s marketing its services to other states that are still struggling. And generally Access Health CT is having a smoother transition from start-up to established business. ‘The first two years, we needed a much bigger call center to be able to answer questions and talk about how to navigate our website and things like that. We needed a much bigger technology team,’ said CEO Jim Wadleigh (Kaiser Health News, 6.4.15).
  • Challenges of Managing Without Federal Funds. The task ahead is to change and shrink the organization to match its new mission. Wadleigh said he is letting consultants’ contracts expire and he is leaving some senior positions unfilled… With more than $150 million in federal money gone and not coming back, Wadleigh has two goals. One is keeping consumer prices as low as they can be and the second is keeping customers satisfied. He is optimistic  the exchange can do it. ‘I think we’re there,’ he said. But that confidence comes at a price: the exchange had to raise the assessment that insurers pay in order to fund smooth operations.” (Kaiser Health News, 6.4.15)

District of Columbia (financially troubled)

  • Financial Problems Facing Smaller Exchanges. This article describes financial problems in several exchanges, including District of Columbia. “The size of smaller states’ markets are small — meaning there’s less revenue from taxes — but they face many of the same fixed costs in maintenance and technology as large states do…In statehouses over the next several months, debates will rage over how to fund exchanges — but also whether those exchanges are worth maintaining at all, and in what form.” (Governing the States and Localities, 2.17.15)

Hawaii (failed in 2015)

Shutdown Timeline

  • Feds may seize control of Hawaii Health Connector. “The federal government is threatening to take over Hawaii’s health insurance exchange within months and has restricted grant money to support operations of the Hawaii Health Connector. Jeff Kissel, the Connector’s executive director, told lawmakers at a briefing Thursday that if the exchange created by the Affordable Care Act does not get state funding soon, the federal government will abolish Hawaii’s marketplace and run it directly…Kissel said the Connector needs $9 million to $10 million in additional funding from the state in fiscal 2016, starting July 1, to continue operations.” (Honolulu Star Advisor, 4.9.15)
  • Legislature Fails to Keep Exchange Afloat. “The Hawaii Health Connector has prepared a contingency plan to shut down operations by Sept. 30 after lawmakers failed to pass legislation to keep the state’s troubled Obamacare insurance exchange afloat. ‘Now that it is clear that the state will not provide sufficient support for the Hawaii Health Connector’s operations through fiscal year 2016 (ending June 30, 2016), the Connector can no longer operate in a manner that would cause it to incur additional debts or other obligations for which it is unable to pay,’ Connector officials said in a report released Friday to the nonprofit’s board of directors.” (Honolulu Star-Advertiser, 5.9.15).
  • Federal Notification of Exchange Noncompliance. “The state was notified in March that Hawaii was out of compliance with the Affordable Care Act, also known as Obamacare, because the Connector wasn’t financially sustainable at the start of this year and wasn’t integrated with the Medicaid system, which determines eligibility for subsidies and tax credits obtained through the exchange. The federal government subsequently restricted grant money to support the Connector and moved to take over its IT functions to allow residents to enroll in coverage through the federal marketplace,” (Honolulu Star-Advertiser, 5.9.15)
  • Hawaii Abandons Troubled State Obamacare Exchange. “Hawaii is taking its troubled ObamaCare insurance exchange off life support, the governor’s office announced Friday, the latest addition to a growing number of state exchanges forced to close after operations became unsustainable. The once-highly praised Hawaii Health Connector has been ‘unable to generate sufficient revenues to sustain operations,’ Gov. David Ige’s office said in a statement…Hawaii is not the only ObamaCare exchange to be plagued by troubles. Despite the government investing $4.5 billion into state-run exchanges, Oregon, Massachusetts, Maryland, Vermont, New Mexico and Nevada have also shut down their operations.” (Fox News, 6.5.15)
  • Hawaii Still Manages Some Exchange Functions. Nevada, Oregon and Hawaii ran into technological problems with their enrollment systems and have shifted in the past year to using the federal site, but they still do other marketplace functions, including marketing and offering consumer assistance (Kaiser Health News, 12.2.15).

Solvency Concerns

  • Hawaii by One Measure Has the Costliest ACA Exchange. “The state’s marketplace has cost $23,899 so far for each person enrolled – about double what any other exchange has cost per enrollee. And that compares with $647 per enrollee, on average, in the 36 states that relied on, according to Angoff’s calculation, which uses Congressional Research Service numbers” (Christian Science Monitor, 5.13.14).
  • Insurance CEO Michael Gold: Shut Down Hawaii Health Exchange. “The chief executive of Hawaii’s largest health insurance company is calling on Hawaii to shut down its beleaguered health insurance exchange, which was set up as part of President Barack Obama’s signature health care law. Michael Gold, president and CEO of Hawaii Medical Services Association, says the state shouldn’t keep spending money on the Hawaii Health Connector, a system that he says is financially unsustainable and does not work… The rollout of Hawaii’s health exchange was delayed and plagued with technical problems. The Connector was awarded more than $200 million in federal funds. It has used about $100 million. It signed up 9,217 individuals, plus 628 employees and dependents. To date, the Connector has raised only $40,350 in user fees, according to Nathan Hokama, the exchange’s spokesman.” (Associated Press, 5.9.14)

Low Enrollment

  • ‘Huge Changes’ Likely For Troubled Exchange. “It enrolled just 10,800 people and despite receiving more than $200 million in federal grants, appealed for state funds to survive. Lawmakers appropriated $1.5 million for operations next year, one-third of its funding request” (Honolulu Star-Advertiser, 8.17.14).

Technical Glitches

  • Start-up Delay. The exchange faced software problems that caused its launch to be delayed by two weeks to Oct. 15, 2013, and after a month, the exchange had only enrolled 257 people. As of May 2014, Hawaii Health Connector enrolled 8,592 residents in coverage. (American Health Line, 12.9.14).
  • Hawaii’s Largest Insurer Pulls Small Business Plans From Health Exchange. “Hawaii’s health-care exchange, the Hawaii Health Connector, has taken another blow. Hawaii Medical Service Association, the state’s largest health insurer, won’t participate in the Connector’s Small Business Health Options Program, or SHOP, as of January. The connector, already under fire for being the most costly exchange in the nation, is left with just one insurance company for local small business owners to select — Kaiser Permanente. The decision by HMSA came after it spent 8,000 hours dealing with the exchange’s technical problems, which drained finances and staffing resources.” (Hawaii Reporter, 8.20.14)
  • UnitedHealth Signs Pact To Repair State Exchange. “CGI won contracts worth $73 million to build and operate the Hawaii Connector, which has been plagued with problems since its inception. It failed to launch on Oct. 1 as planned, often crashed and took users hours to navigate” (Honolulu Star-Advertiser, 8.22.14).
  • ‘Huge Changes’ Likely For Troubled Exchange. “From its inception, the exchange has been a black eye for the state and Abercrombie. It failed to launch on Oct. 1, the first day of open enrollment, and has since been plagued with computer problems, frustrating consumers throughout the sign-up period that ended in April” (Honolulu Star-Advertiser, 8.17.14).
  • Malfunctioning Websites Still Delaying Hawaii ObamaCare Signups. “The state’s goal has been to get at least 100,000 people – 8 percent of the population – to obtain health insurance through the Obamacare exchange.” (Hawaii Reporter, 7.23.14)


Kentucky (likely to be shut down)

Governor-Elect Bevin’s Shut-Down Plans

  • According to New York Times (12.12.15), a new poll from the Kaiser Family Foundation showed that 52% favored keeping Kynect, while 26% favored shifting to the federal Exchange and 19% said they did not know.
  • According to Kaiser Health News (12.2.15),”Kentucky Gov.-elect Matt Bevin’s plan to dismantle the state’s successful health insurance exchange, Kynect, and shift consumers to the federal one would likely have little impact on consumers, health experts say.”
    • Kentucky Exchange Well-Run. Kentucky’s exchange is considered one of the best-run state exchanges because of its innovative, extensive marketing to uninsured consumers and its ease of use.
    • Cost to Move to Federal Exchange. Kynect has an annual budget of about $28 million, all funded by its 1 percent assessment on health premiums. That charge would increase to 3.5 percent in a federal exchange, and dismantling Kynect would cost the state an estimated $23 million in one-time expenses, said Audrey Tayse Haynes, head of Kentucky’s Cabinet for Health and Family Services.
    • Long-Run Funding Concerns. Bevin’s concern is whether the state could end up being on the hook financially if its revenues from premium taxes don’t keep up with the expenses associated with operating Kynect. That wasn’t a problem in the exchange’s startup years when the federal government paid all the costs for state exchanges. But the federal money has run out, and Kynect, like other state exchanges, must rely mainly on premium taxes to fund operations.
    • Shut-Down No Earlier Than 2017. “Bevin takes office Dec. 8. The earliest that he could shut Kynect would be in 2017 because the health law requires a 12-month notice to the federal government. The technology work for decommissioning would take about nine months, state officials said.”
  • New Republican Governor Can Use Executive Authority to End Exchange.  “The incumbent Democrat, Gov. Steve Beshear, used his executive authority to establish state-based health insurance exchange, Kynect.” Thus the same authority could be used to shut down the exchange. (The New York Times, 11.4.15).

Low Private Enrollment

  • Private Coverage Sign-ups on Exchange Only 25% of Potential. “Largely because the state chose to expand Medicaid, the drop in the uninsured rate has been among the sharpest in the nation…But as the first year of coverage ends, potential obstacles to the law’s success are also coming into sharp relief here. Relatively few people have signed up for private health plans offered through the state’s new online marketplace, Kynect. People earning between 138 and 400 percent of the poverty level — between about $16,000 and $47,000 for a single person — can get subsidies to help with the cost. Even with that incentive, only about 76,000 Kentuckians signed up for these plans in 2014 and have renewed the coverage for next year. Since the enrollment period for 2015 began on Nov. 15, an additional 9,000 people have selected exchange plans. Before the new coverage options took effect, state officials estimated that some 340,000 uninsured Kentuckians could get private insurance through the exchange” (The New York Times, 12.30.14).


Poor Management

  • Feds Were Overbilled $28.4 Million. “An audit of Maryland’s Obamacare insurance exchange has revealed that the state overbilled the federal government $28.4 million during the O’Malley administration’s botched implementation of the Obamacare website…The probe reported that the Maryland Obamacare exchange had no oversight or internal controls–and suggested that Maryland refund the federal government the $28.4 million, and then re-apply for the amount of money the state actually needs. That suggestion is not binding, and in the midst of financial troubles, it is not yet known whether or not Gov. Larry Hogan will reimburse the federal government the money. The overbilling resulted from two major errors. $15.9 million came as a result of out-of-date enrollment data provided by the state. another $12.5 million came from faulty calculations from a contractor that isn’t identified in the report” (, 3.27.15).
  • Federal Audit RequestedIn a February 2014 letter to the inspector general of the U.S. Department of Health and Human Services, Reps. Andy Harris of Maryland and Jack Kingston of Georgia ask auditors to review why millions of federal dollars flowed into the Maryland Exchange despite warnings from a consultant about problems. On 3.29.14, Fox News reported that Maryland may abandon its $125 million Exchange in favor of a completely new one.
  • Maryland Exchange Among Worst in Nation. “‘Maryland officials ignored early warning signs and chose to waste and abuse federal taxpayer money by opening up what they knew was a flawed exchange to the public,’ Harris said in a statement Monday morning. The investigation will ‘bring to light how hundreds of millions of dollars were wasted on one of the worst exchange rollouts in the country.’ The Maryland Health Benefit Exchange is among the worst performing in the country, having enrolled just 39,000 people in private plans as of last week. And that’s despite the enthusiastic embrace of the law by state officials. State legislators are already reviewing the array of problems, which have political as well as fiscal implications.” (Politico, 3.10.14)
  • “The failure of the Maryland exchange lead to a court settlement with Noridian Healthcare Solutions paying back $45 million of the federal funds spent for the development of that exchange. Slavitt’s letter to Sen. Cornyn revealed that, of the $45 million Noridian is paying back in federal funds, $32 million of that is being paid back to CMS while the remaining $13 million is being paid to the state of Maryland, despite the fact that all of those funds were from federal taxpayer dollars allocated for the development of the failed state-based Obamacare exchange in Maryland. There has been no explanation for why $13 million of those funds are being awarded to the state of Maryland nor a reason for those federal funds to be sent to Maryland rather than all $45 million recovered being sent to CMS. This has given rise to criticisms that failed state-based exchanges could lead to ‘slush funds’ for those states.” (Red State, 2.18.16)

Technical Glitches

  • Md. To Stagger Access To Health Exchange Web Site To Address Any Technical Flaws. “Maryland officials want to limit access to the state’s new health insurance Web site when it launches in November so that any glitches can be worked out and the system won’t be overwhelmed with requests. as a result, individuals won’t be able to enroll themselves directly through the website until four days after the launch.”  (The Washington Post, 9.16.14)
  • Maryland Health Exchange To Have Staggered Rollout. “But Maryland faces a daunting challenge in getting the website running in time for its full-scale debut. Not only does the state face the task of enrolling an unknown number of new applicants, but it must also get out the word to another 60,000 to 70,000 people who enrolled through the exchange last year that they must go through the process again this year to keep their subsidized coverage. Those people include many who experienced the agonizing system crashes, computer screen freeze-ups, and repeated sign-on attempts last year.” (The Baltimore Sun, 9.16.14)
  • Exchange Under Review For Possible Fraud. “Maryland’s health exchange—the connection to ObamaCare here—never worked as easily as the ads promised at launch. It crashed and was filled with technical problems.” (CBS Baltimore, 8.26.14)

Massachusetts (highly troubled)

Poor Management

  • Obamacare’s Big Dig: Whistleblowers Expose Massachusetts ACA Exchange, DOJ Issues Subpoenas. “The Associated Press has reported that the U.S. Attorney’s office has issued subpoenas to the Massachusetts Health Connector (the state’s insurance exchange). The subpoenas cover the period during which the website experienced major technical problems and mismanagement as the state transferred to an Obamacare (ACA) exchange under former Governor Deval Patrick (D-MA). This action preceded a June Boston Globe report that the Connector has been covering 6,000 enrollees on both Medicaid and the exchange, and will spend another $47 million to address some of the remaining technical issues…The impact on the integrity of the state’s Medicaid program and the state budget has been enormous and still is not yet fully understood” (Forbes, 8.12.15).
  • Report Slams Patrick Administration over Health Connector Fix Claims. “The Patrick administration may have exaggerated its progress in building a new Obamacare website to avoid losing federal funds — and even tried to hide gaping holes in the Health Connector portal — according to a local think tank that has released a bombshell report. The Pioneer Institute report contends the Patrick administration ‘vastly overstated’ the progress in building the massive website to the federal Centers for Medicare and Medicaid Services, and that project leaders failed to hold vendor CGI accountable for ‘shoddy work’ and missed deadlines…’Although the state knew as early as September 2012 that the project was behind schedule and off track, the UMass Medical team chose to conceal CGI’s deficiencies rather than remedy them,’ reads the report authored by health care expert Joshua Archambault of Pioneer…The Pioneer Institute estimates the Health Connector website disaster ultimately will cost taxpayers $1 billion.” (Boston Herald, 5.11.15)

Technical Glitches

  • Second Enrollment Period Plagued with Problems. “The Connector still does not have a fully functioning website and it barely limped through a second open enrollment in 2014. Amazingly, after the federal government insisted the state follow a dual-track plan in year two, with plans to potentially default to, they still let the state conduct a second open enrollment that remained deeply flawed. One only has to visit the Health Connector’s Facebook page to see the months of frustration by enrollees.” (Forbes, 8.12.15).
  • Massachusetts to Remain State Exchange — Most Need to Re-Enroll. “The Health Connector struggled with technological problems during 2014 open enrollment, and officials spent the spring and summer evaluating whether to fix its system or transition to After successful testing of a new vendor’s system, Massachusetts announced in August it would remain a state-run exchange. Given the problems with its old technology, Massachusetts Health Connector cannot process re-enrollments automatically. People who were enrolled in qualified health plans, temporary MassHealth coverage, and other coverage through Health Connector for 2014 must re-enroll for 2015.” (, 12.16.14).
  • Massachusetts to Abandon Exchange for Second Enrollment Period. “Massachusetts is throwing in the towel on its ailing health exchange website and will instead connect to the federal website with a unique plug-in, officials announced May 5. The state’s Health Connector website has been unable to enroll people seeking subsidized health insurance under the federal Affordable Care Act and also hasn’t functioned properly for those attempting to purchase unsubsidized health plans, Sarah Iselin, special assistant to the governor, has said. The state has been trying to fix its website, built by CGI Inc., but has decided it is unfixable and will shut it down.” (Bloomberg BNA, 5.7.14).
  • Flawed Health Website Too Broken to Fix. “Massachusetts plans to completely scrap the state’s dysfunctional online health insurance website, deciding that it would be too expensive and time-consuming to fix the overwhelming number of flaws. Instead, officials will buy an off-the-shelf product used by several other states to enroll residents in health plans, while simultaneously preparing to join the federal insurance marketplace if that product fails. The state’s insurance system needs to be ready by Nov. 15 for consumers to enroll in new health plans for 2015. If adoption of the new software, called hCentive, takes longer than expected, the state can connect to the federal marketplace for up to one year.” (Boston Globe, 5.5.14).
  • Obamacare Takes Over Romneycare, Ruins It. “Obama allegedly stole his idea from Romney’s somewhat successful (we can save that debate for later) implementation of state-wide health insurance reform. Thus theoretically, the shift from Romneycare to Obamacare should have gone smoothly. However, website malfunctions produced ‘unforeseen’ difficulties that in turn have embarrassed Massachusetts officials… The disastrous implementation meant that temporary ‘workarounds’ had to sloppily bandage up the health care wounds Obamacare caused. Temporary insurance and insurance extensions have been employed in order to prevent those who lost their original plans from going without coverage altogether.” (American Spectator, 2.18.14).
  • Disastrous Performance During Rollout. “Massachusetts is now home to the nation’s WORST-performing exchange. Jean Yang, the executive director of the Massachusetts Health Connector, wept at a board meeting, where it was disclosed that 50,000 applications for health insurance are sitting in a pile, and have yet to be entered into a computer system.  Each one of those applications requires two hours to process, adding to a mountain of work facing Connector staff as they scramble to prevent people from losing insurance, officials said.

High Exchange Costs

  • Temporary Medicaid Coverage after Massachusetts Health Exchange Website Failed Cost $650 Million, State Says. “The cost for enrolling people in temporary Medicaid coverage last year due to Massachusetts’ failed Health Connector website was $658 million, according to the Massachusetts Executive Office of Health and Human Services…Michelle Hillman, a spokeswoman for the Executive Office of Health and Human Services, said that figure represents the entire amount spent – not the cost to the state. Approximately half of the cost is likely to be borne by the federal government, although the final federal reimbursement amount is still unknown. The state also revealed that it has spent $281 million so far on the health insurance exchange websites. That is far above the $174 million that the website was originally projected to cost.” (Mass Live, 6.16.15).
  • Internal Documents Suggest $1B ACA Cost In Massachusetts. “The Patrick Administration could spend as much as $560 million in taxpayer dollars this year for free temporary Medicaid insurance plans for the hundreds of thousands of Bay Staters unable to sign up for Obama-care through the state’s disastrous website, according to confidential documents obtained by the Herald… Some 306,000 Bay Staters are on the temporary Medicaid plans, and many of them are making too much money to qualify under ordinary circumstances. But since last winter, the embattled state Health Connector has been enrolling them in these free plans because its glitch-infested Web portal blocked them from signing up for normal health plans. The state has promised that all of these people will gradually transition off the free plans by March 2015.” (McClatchy-Tribune Health Services, 10.11.14).
  • Exchange Costs Exceed $600 Million. “The cost to create a working website to sign people up for health plans under the Affordable Care Act — which the state botched and is feverishly trying to relaunch by Nov. 15 — is estimated at $616.3 million, according to Joshua Archambault, Pioneer’s health care expert. That includes hefty payments to Optum and hCentive, out-of-state contractors awarded emergency no-bid contracts earlier this year to fix and relaunch the portal.” (InsuranceNewsNet, 9.17.14).

Minnesota (financially troubled)

Solvency Concerns

  • Minnesota Lawmaker Says MNSure ‘Improperly’ Spending Tax Money. “MNSure, the state’s health care insurance exchange, faced tough questions in a committee meeting Wednesday about spending and alleged budget woes. State Rep. Matt Dean, chairman of the Health and Human Services Finance Committee, wants MNsure to explain why it is using tax dollars from the Health Care Access Fund to cover what he calls ‘budget shortfalls to stay operational. It is clear MNsure is using money from the Health Care Access Fund to cover bills they are unable to pay,’ Dean told 5 EYEWITNESS NEWS before the meeting. Dean added, ‘I do not know of any statutory appropriation allowing MNsure to use Health Care Access dollars for its budget. If that is what’s happening, it would be improper use of that money.’ The Health Care Access Fund comes from a 2 percent tax providers pay every time they visit a health care provider, such as doctors and dentists.” (KSTP, 2.2.16)
  • Premium Tax Shortfalls. Several states including Vermont and Minnesota are struggling to raise enough revenue through premium taxes. (Kaiser Health News, 12.2.15).
  • Exchange May Be Unsustainable. “‘This has been an abject failure from day one to present. If you’re denying that, your head is in the sand,’ said state Rep. Nick Zerwas. His colleague, Rep. Mary Franson, said: ‘We should have never gotten into the exchange. We should just move straight to the federal exchange and bypass the state of Minnesota.’…In the end, lawmakers ended their session leaving MNsure intact. But they voted to ask the feds to allow Minnesotans to get tax subsidies for health insurance regardless of whether they shop on the open market or through MNsure. The legislature also created a bipartisan task force to consider MNsure’s future. Republican Rep. Matt Dean says those relatively small measures make a big point.’ The final agreement I think that we have going to the governor right now acknowledges that there’s major trouble with MNsure, that the current situation is not sustainable,’ Dean said. Democratic Sen. Tony Lourey helped create MNsure. He likes the idea of letting Minnesotans shop outside of MNSure and still get subsidies, but, he said, ‘I’m not particularly optimistic that it would be approved by federal officials.  If it were approved, I think we would have to talk about then how do we structure the financing of the exchange.’… Meanwhile, with fewer people signing up for plans through MNsure than anticipated, revenue is way down. That coupled with federal money drying up by year’s end has MNsure moving to cut $2.5 million from its budget over the next three years.”(Kaiser Health News, 6.4.15).
  • Exchange Retools Following Financial Challenges. “In the Land of 10,000 Lakes, concern has been mounting that Minnesota’s state-run HIX is slowly sinking into insolvency exacerbated by downward revisions in projected enrollment and speculation that it could be supplanted by at some point. Federal dollars that have kept MNsure afloat will evaporate by the end of 2015, which means it must then rely on fees from private health plan signups to find more stable footing and consider hiking those charges if financial and enrollment problems persist.” (Employee Benefit Adviser, 4.27.15).
  • Dayton To Lawmakers On MNsure: ‘Look Before You Leap.’ “Gov. Mark Dayton says Republican lawmakers pushing major changes to the state’s health insurance exchange should look before they leap. That’s why the Democratic governor has proposed creating a task force to study the future of MNsure and health care in Minnesota. Dayton included $500,000 for that study in his revised budget unveiled Tuesday. The governor first made the suggestion in a letter to legislative leaders earlier this week. Some Republicans say that’s an admission that MNsure has been a bust. Dayton says that’s not the case. A committee in the Republican-controlled House passed a bill Monday to scrap MNsure and move to the federal exchange.” (CBS Minnesota, 3.17.15)
  • Media Is Deeply Confused Over Why Obamacare Is Collapsing. “Minnesota is one state that bought into Obamacare early on and runs its own exchange. While Minnesota has more flexibility to hire more bureaucrats and spend more on advertising the unaffordable insurance, Obamacare has cost the state’s taxpayers dearly. Lawmakers in Minnesota were forced to scramble last year to paper over astronomical premium increases in the state, which ranged from 50 to 67 percent in 2017. While lower-income Minnesotans could rely on federal Advance Premium Tax Credits to help cover the rate hikes, middle class individuals who earn too much to qualify for help were set to be steamrolled. More than 100,000 middle class Minnesotans who don’t receive federal subsidies had to be bailed out by the state – at a cost to state taxpayers now at nearly $800 million.“ (MacIver Institute, 11.3.17)

Low Enrollment

  • Letter: MNsure is Way Over Budget, not Hitting Enrollment. “The Obamacare insurance exchange for Minnesota, MNsure, continues to be a huge disaster. The MNsure 2016 qualified health plan (QHP) enrollment is 85,690. This is an increase over the prior year and yet it is still less than 1.5 percent of the population… Additionally some cost has simply shifted, often to others finding it equally difficult to afford health care. The shifted cost in the form of a ‘reinsurance’ assessment for a family of four is reported at about $425 a year. However, even this amount is not adequate to reimburse the Obamacare insurance carriers for losses. And so the taxpayers will also pick up the difference of $3.5 billion to cover a two-year shortfall… The insurance industry surely can create affordable products providing more cost selection to the consumer to serve this less than 2 percent market segment in return for the benefit of selling insurance in Minnesota. Do it now and end MNsure.” (Woodbury Bulletin, 3.15.16)
  • Poor Enrollment Performance. “Following Minnesota is a curious move. Minnesota has signed up just 22% of those eligible for exchange coverage, 48th among all states and barely half the U.S. average of 42%, according to the Kaiser Family Foundation. The MNsure exchange also ranks near the bottom in its share of young-adult enrollees (24.2%) and near the top in its share of adults age 55 and up (33%). To top it off, PreferredOne quit the Minnesota exchange despite being its dominant insurer in 2014, hardly a vote of confidence. The Minnesota exchange woes likely reflect, in part, the Basic Health Program siphoning off the near-poor — especially the young and healthy.” (Investor’s Business Daily, 4.30.15).
  • Insolvency Concerns Exacerbated by Low Enrollment. “‘After the first year or two, getting the remaining uninsured is just going to get harder and harder,’ Erin Trish, Ph.D., a postdoctoral fellow at the Schaeffer Center for Health Policy and Economics at the University of Southern California, recently told the AP. ‘We’ve already got the low-hanging fruit.’” (Employee Benefit Adviser, 4.27.15).
  • Largest ACA Insurer Leaves Market. “PreferredOne, the insurer that sold nearly 60 percent of all private health plans on Minnesota’s Obamacare exchange, on Tuesday said it would leave that marketplace. PreferredOne’s plans were the lowest-cost options on that exchange, known as MNSure. PreferredOne’s decision is likely to have significant effect not only on its current ObamaCare enrollees, but also on people who will be shopping for plans for next year on the exchange, which is now left with just four insurers. The remaining players on the exchange are Blue Cross and Blue Shield, Health Partners, Medica and UCare…Those customers now face the prospects of higher rates if they want to remain in those same plans next year, as is their option, while existing customers of other insurers and new customers in the market will have fewer price options from which to choose” (CNBC, 9.16.14).

Technical Glitches

  • Insurance Group Worries MNsure’s Renewal System Not Ready For Nov. Enrollment. “Minnesota Association of Health Underwriters Board Chair Alycia Riedl says health insurance brokers who work with MNsure are nervous. Riedly says there is no computerized renewal system in place, and if it is not functional by the next MNsure open enrollment, Nov. 15, it could affect tens of thousands of people who are already enrolled through MNsure.” (KSTP, 9.22.14).
  • MNsure Trying To Fix ‘Life Event’ Changes Backlog. “State, county and health exchange officials tell the St. Paul Pioneer Press the MNsure system has made recording of ‘life events,’ including births, marriages and address changes, a slow and difficult process. In Dakota County, it took months for nearly 80 new moms to get their infants added to their insurance.” (The Associated Press, 9.2.14)
  • MNsure To Pay Deloitte $3M More For Health Exchange Repairs. “MNsure plans to spend another $3.16 million for help from a New York-based consultant with fixes to its troubled information technology system. The state’s health insurance exchange agreed this spring to spend $4.95 million for assistance from Deloitte in assessing problems with the MNsure system plus help managing the project. … The proposed changes wouldn’t alter the overall price tag for the state’s health insurance exchange, MNsure officials said, because the funds would come from within the $155 million in federal grants the state has already received” (St. Paul Pioneer Press, 7.30.14).
  • MNsure Report Finds Mixed Results, 399 Defects But System Secure. “The second phase of a consultant’s report sends mixed signals about the performance of MNsure’s information technology system. On one hand, MNsure has been failing to track all the defects with its website, with the new report tallying 399 open defects — much higher than the 60 to 162 defects that officials thought they had to handle. The finding prompted the consulting firm Deloitte to say problems with defect tracking could make it more difficult and costly for MNsure to implement fixes.” (, 7.16.14)
  • MNsure Chooses Deloitte As Lead Vendor. “Technical problems marred MNsure’s launch last October and persisted for months, frustrating thousands of people who tried to meet deadlines for enrolling for health care coverage set by the federal Affordable Care Act.” (The Associated Press, 4.16.14)
  • MNsure Error Rates Improve. The StarTribune reports (2.13.14): “Consumers are having an easier time getting through the MNsure website as a result of efforts to fix technology issues and beef up call center staff, officials at the state’s new online health insurance exchange said Wednesday. While the website remains ‘less than perfect,’ it is stabilizing, MNsure interim CEO Scott Leitz said in a measured progress report delivered to state lawmakers and an increasingly antsy board of directors in separate meetings.”

Poor Management

  • Audit Finds MNsure Missteps With Marketing Work. “Minnesota’s health insurance exchange failed to properly authorize over $925,000 in marketing work and didn’t update its contract with its vendor to cover it until after the job was done, Legislative Auditor James Nobles reported Tuesday. He also found that MNsure lacked adequate internal controls over premiums collected from insurance applicants and didn’t maintain proper inventories of equipment purchased with federal funds” (Associated Press, 10.28.14).
  • An auditor’s report (February, 2016) examining Minnesota’s Obamacare exchange found the exchange enrolled more than 100,000 individuals who were ineligible for the program. In all, the audit estimated an error rate of close to 50 percent, and the state overpaid up to $271 million over the five-month period that was analyzed by auditors.

Nevada (failed in 2014)

Shut-down Timeline

  • Nevada Still Manages Some Exchange Functions. Nevada, Oregon and Hawaii ran into technological problems with their enrollment systems and have shifted in the past year to using the federal site, but they still do other marketplace functions, including marketing and offering consumer assistance. Nevada and Oregon both posted solid enrollment gains in the second annual enrollment period that ended in March 2015 after switching to (Kaiser Health News, 12.2.15).
  • GOP lawmakers propose abolishing Nevada health exchange. “Several Nevada Republicans are trying to scrap the Silver State Health Insurance Exchange launched as part of President Barack Obama’s health care overhaul, saying the program is expensive, suffered a rocky start and is another example of federal overreach…Critics pointed to the major technical problems in the first few months of the program that prompted the state to prematurely cancel its $75 million agreement with contractor Xerox last year. Nevada then shifted from a state-run exchange to a federally supported exchange that uses the technical infrastructure of the federal HealthCare.Gov website, while the state is responsible for promoting the program to Nevadans and offering enrollment assistance. Jones argued that with the shift, the state’s involvement is duplicative. ‘We’re trying to get the state out of the business of what the federal government is already doing,’ he said.” (Washington Times, 4.6.15)
  • Exchange Abandoned for “Xerox is gone. The many glitches and issues that plagued the exchange last year forced the exchange board to find an alternative. While it remains a state-based exchange, customers will go through, the federal health insurance site. …’Last year we had a middleman being paid all the premiums and Nevada Health Link shipped everything off to the individual carriers. Next year we will be able to get rid of that a little bit, and have the carrier be paid directly from the IRS and the clients.’” (KSNV & MyNews3, 10.28.14)
  • Exchange Contractor Terminated. “The Silver State Health Insurance Exchange board voted unanimously Tuesday to end its relationship with Xerox, the vendor contracted in 2012 to build the exchange’s Nevada Health Link website. In place of Xerox, the exchange will adopt the federal exchange’s eligibility and enrollment functions for the sign-up period that begins Nov. 15, though it will keep its status and funding as a state-controlled system.” (Las Vegas Review Journal, 5.20.14)

Low Enrollment

  • 2015 Target Enrollment Cut by Nearly 60%. “Last month Nevada officials cut their target enrollment from 118,000 to 50,000 and conceded that meeting even the lower goal would be a challenge. That drew the ire of board members, who lashed out about the thousands of people who will remain uninsured after Monday’s deadline. ‘These are not numbers. These are people throughout the state who don’t have health insurance,’ said Lynn Etkins, an attorney and vice chairwoman of the board overseeing the Silver State Health Insurance Exchange” (Las Vegas CBS, 3.25.14).

Technical Glitches

  • Nevada’s Obamacare Program Called ‘Full Failure,’ ‘Catastrophe’. ”Overseers of Nevada Health Link have called that state’s program a ‘full failure” and a ’catastrophe.’ Some officials have suggested dumping Xerox, which was awarded a $75 million contract to develop the system. While Xerox remains on the job, a state board earlier this month approved up to $1.5 million to hire another tech firm, Deloitte Consulting, to assess the Xerox system and recommend fixes.” (Las Vegas CBS, 3.25.14)

New Mexico (failed in 2015)

  • State Abandons Exchange for in 2016. Kaiser Family Foundation reports that for 2016, New Mexico will have a Federally-supported State-based Marketplace: States with this type of Marketplace are considered to have a State-based Marketplace, and are responsible for performing all Marketplace functions, except that the state will rely on the Federally-facilitated Marketplace IT platform. Consumers in these states apply for and enroll in coverage through
  • State Operates SHOP Exchange for 2016. New Mexico continues to operates the Small Business Health Options Program (SHOP) marketplace (footnote 3).
  • Plans for State-Run Health NM Exchange Dropped. “The New Mexico Health Insurance Exchange board has decided to drop plans for building a state website for individual consumers and instead will continue using the federal website. Forging ahead with the technical work for a wholly state-based operation would be more costly and would not provide the same level of customer support as the federal site is able to deliver, said health exchange CEO Amy Dowd.” (Albuquerque Journal, 4.8.15)

New York

Fiscal Mismanagement

  • Watchdog: New York Misspent $150 Million in Obamacare Funds. “The inspector general for the Department of Health and Human Services said in a report Tuesday that New York didn’t follow federal requirements when handing out grants for setting up its Obamacare exchange. An audit found that New York allocated $93.4 million from August 2011 to March 2014 using a formula that overstated the population who would use the marketplace to find health insurance coverage. New York also gave $49.5 million to the exchange that should have gone to Medicaid and another nearly $6 million of enrollment assistance that was for Medicaid. Now the federal government wants the state to refund the $150 million that was misallocated to the exchange. ’The state agency misallocated these costs because it did not have adequate internal controls to ensure that it properly allocated costs,’ the audit said. (Washington Examiner, 11.22.16)

Flawed Eligibility Determination Process

  • State Audit Uncovers Inappropriate Medicaid Enrollments. With the enactment of the federal Patient Protection and Affordable Care Act in 2010, the State developed the New York State of Health (NYSOH) as a new online marketplace for individuals to obtain health insurance coverage, including Medicaid…The Department did not provide auditors adequate access to the NYSOH system. Due to this limitation and other audit scope impairments, we were unable to fully assess the adequacy of NYSOH controls over Medicaid enrollments and fully determine the extent to which improper enrollments may have caused Medicaid overpayments. Using other Medicaid data sources, we determined that a range of design and process flaws in NYSOH’s eligibility process permitted inappropriate Medicaid enrollments that resulted in overpayments totaling about $3.4 million since NYSOH’s implementation. We determined:
    • NYSOH enrolled deceased individuals and continued Medicaid coverage for individuals who had died after enrollment, resulting in Medicaid overpayments of $325,030;
    • NYSOH issued multiple CINs to individual recipients, resulting in actual Medicaid overpayments of $2,852,210 and potential overpayments of $188,131; and
    • NYSOH issued unreasonably high numbers of CINs for expected multiple births per pregnancy – in some cases up to ten per pregnancy. In a single case, unnecessary CINs permitted eMedNY to make $4,796 in improper Medicaid payments for nine of ten improbable ‘unborn’ CINs issued for one pregnancy (New York Office of the State Comptroller, 10.28.15).
  • Federal Audit Finds Shows Problems with Exchange Eligibility Process. “A federal audit of the state Obamacare health insurance exchange found several problems in verifying New Yorkers’ eligibility for enrollment or subsidies in the online market’s first open enrollment season, from October 2013 through March 2014… Federal auditors found NY State of Health was ineffective in verifying household income, which is used to determine eligibility for financial assistance; resolving inconsistencies in certain eligibility data; and checking that an applicant for private insurance was not eligible for coverage through another plan, such as a government plan like Medicare or, in the case of a federal employee living in New York, federal health benefits” (Times Union, 9.23.15).

“Basic Plan” Preferred Over Exchange Coverage

  • New York Undercuts ObamaCare Exchange. “New York is the second state after Minnesota to adopt a Basic Health Program for households up to 200% of the poverty level. It’s a government-managed health care option included in the 2010 reform law… One reason is that ObamaCare is not all that it’s been cracked up to be for low-income households… New York’s Basic Health Program will have zero deductibles and charge monthly premiums of $0-$20 for coverage that is more comprehensive than on the exchange. So it’s a no-brainer for the eligible near-poor. But there are several side effects from this approach.
    • Taxpayer Cost: More New Yorkers will sign up, and generally will claim a higher share of eligible subsidies than under the exchange. So the cost of the Affordable Care Act will rise.
    • Higher Exchange Premiums: An Urban Institute analysis in 2011 noted that if New York went the Basic Health route, its exchange could see higher premiums due to the relative youth of the low earners who would leave the exchange. That would spur a slight rise in the number of uninsuredas healthier people over 200% of the poverty level dropped exchange coverage.
    • Work Disincentive: Households with income just above the cutoff for New York’s program would have an incentive to earn less, making the ObamaCare subsidy cliff at 200% of the poverty level even greater.” (Investor’s Business Daily, 4.30.15).

Physician Concerns

“The problems highlighted in Kleinman’s testimony include:

  • Significant inaccuracies on insurer websites regarding which physicians are actually participating in these Exchange networks;
  • Vague communications with physician offices that fail to clearly specify that physicians are being directed to participate in Exchange products unless they opt out;
  • Failure to specify payments for care delivered to patients enrolled in Exchange products; and,
  • For many, discovering the payments for such care are grossly inadequate compared to other products offered by that insurer with whom the physician was participating” (Niagra Frontier Publications, 1.13.14).

North Carolina

Oregon (failed in 2014)

Potential Criminal Misconduct

  • ‘Cover Oregon’ Cover-Up. “A new House report exposes the calamity of implementing Obamacare in Oregon.

    • State law clearly established Cover Oregon as an independent entity. The governor and his political advisers’ involvement in Cover Oregon was inconsistent with Oregon law.
    • Campaign funds were used to assist the governor in his official capacity while handling Cover Oregon.
    • Cover Oregon became closely tied with all campaign activities, from polling to meetings.
    • The governor’s political operatives – none had technological experience – micromanaged many of the decisions that needed to be made regarding Cover Oregon.
    • Junking Cover Oregon and moving to was viewed as a way to ‘let the steam out of so much of the attacks.’
    • The Cover Oregon board was told the cost of moving to was $4-6 million. A slide showing moving the Medicaid system would cost $36 million was deleted.
    • After the governor complained about the ‘free independent expenditure campaign’ his political opponent was receiving because of Cover Oregon, his political advisers drafted letters asking the attorney general to sue. The letter was sent days later.
    • In sum, the committee says, ‘Cover Oregon failed for two main reasons: The state acted as their own system integrator (like, and the state tried to revamp its entire health care system, not just build an exchange.’

    As a result, in what may be the first allegations of criminal misconduct related to Obamacare, the committee wants United States Attorney General Loretta Lynch to launch a criminal probe and for Oregon’s attorney general to appoint a special prosecutor with a mandate to uncover what happened with Cover Oregon.” (US News, 6.8.16)

Shut-down Timeline

  • Oregon Still Managing Some Exchange Functions. Nevada, Oregon and Hawaii ran into technological problems with their enrollment systems and have shifted in the past year to using the federal site, but they still do other marketplace functions, including marketing and offering consumer assistance. Nevada and Oregon both posted solid enrollment gains in the second annual enrollment period that ended in March 2015 after switching to (Kaiser Health News, 12.2.15).
  • Oregon Abolishes its Hopelessly Bungled Health Insurance Exchange. “A bill dissolving Cover Oregon, the state’s dysfunctional health insurance exchange, has been signed by Gov. Kate Brown…In April, state officials voted unanimously to switch over to the federal health insurance exchange,, citing the high cost of trying to fix the problematic state marketplace” (Los Angeles Times, 3.7.15).
  • Oregon’s Transition to Federal Exchange on Track. “This summer, Oregon hired a tech firm, Deloitte Consulting LLC, to help transition Oregon to the federal exchange and to finish building the state’s Medicaid system. And earlier this month, officials cut all remaining ties with the state’s main technology contractor Oracle Corp. and decided to use another state’s Medicaid enrollment system instead of salvaging some of Oracle’s technology. That system won’t be ready until next year, so Medicaid-eligible residents will also use during the new enrollment period….In the meantime, a grand jury is investigating Cover Oregon, as is the federal Government Accountability Office and the inspector general of the U.S. Department of Health and Human Services. The state and Oracle Corp., the main technology contractor responsible for developing the exchange, are suing each other.” (NewsOK, 11.2.14)
  • Harsh Editorial Criticism. The Statesman Journal, (9.8.14) opined “Cover Oregon should disband. It is a failure. Its name should be permanently retired, to rest among the annals of worst-executed state projects. Its remaining work should be transferred to the Oregon Health Authority or other state agencies, providing a fresh start.” In the same week, an editorial in The Oregonian (9.12.14) asserted “the state-sponsored online service to help Oregonians buy health insurance has been a train wreck since failing, nearly a year ago, to launch successfully and as promised. It’s been a costly and serial embarrassment to just about everyone involved, none more so than Gov. John Kitzhaber, who separately championed a restructuring of care under the Oregon Health Plan and won the financial support of federal officials to do so.”
  • Oregon Dropping Health Exchange in Favor of Federal Marketplace. “Oregon, once considered to be at the forefront of the federal health care overhaul, created what is seen as the worst of more than a dozen state-generated exchanges, despite receiving$305 million in federal grants to fund its operations from 2011 on.” (, 4.25.14).
  • Oregon Dropping Online Health Exchange For U.S. Site. “Oregon’s exchange is seen as the worst of the more than a dozen states that developed their own online health insurance marketplaces. The general public still can’t use Cover Oregon’s website to sign up for coverage in one sitting” (The Associated Press, 4.25.14).

High Exchange Costs

According to the Los Angeles Times (3.7.15), at the time the governor signed a bill to dissolve the Oregon Exchange, it had cost the state $248 million. Modern Health reports that when the legislature approved the bill, Cover Oregon was facing a deficit of $2 million. At the same time, Time reported that Cover Oregon had received $305 million in federal grants to fund its operations from 2011 on. According to an AP report, “the state abandoned its troubled exchange in April after determining it was cheaper to switch to the federal site than to fix Cover Oregon.”

Technical Glitches

  • ACA Exchanges are Dysfunctional.  According to the LA Times “no Oregonian was ever able to enroll online in a private plan…because the state exchange never had a functioning website, forcing insurance seekers to file paper applications” (Freedom Works, 5.1.15).
  • Technology Fiasco. “When Oregon launched its insurance exchange portal last October, it turned into a technology fiasco. Cover Oregon was the only exchange in the nation that never fully launched and didn’t let the public enroll in coverage in one sitting. Instead, residents had to use a time-consuming hybrid paper-online application process to get health insurance. Six top officials connected to the Cover Oregon debacle resigned. The state abandoned its troubled exchange in April after determining it was cheaper to switch to the federal site than to fix Cover Oregon. Officials say they’ve taken steps to ensure a smooth new enrollment period, which starts on Nov. 15” (Associated Press, 11.2.14).
  • Tax Credit Error Results in Unexpected Tax Payments for Some Exchange Members. According to The Oregonian (9.24.14), “Early this month, The Oregonian revealed the existence of the erroneous formula, which had to do with the tax credits used by qualified individuals to reduce their premiums. Cover Oregon first noted the formula was wrong in January, but correcting it took a back seat to fixing the exchange’s technological problems, officials said.” According to an AP report (9.15.14), “Cover Oregon has identified 775 households that will owe money to the federal government because they were given tax credits that were too large.”
  • Exchange Still Malfunctioning at End of First Enrollment Period. At the time Oregon elected to abandon its Exchange, AP reported (4.25.14) “The general public still can’t use Cover Oregon’s website to sign up for coverage in one sitting.”

Poor Management

  • Oregon Should Have Been One of Most Prepared States. Mark Hemingway at The Weekly Standard (2.24.15) observed: “That Oregon ended up with the most disastrous of all the Obamacare exchanges—an impressive achievement, considering how bad the law’s rollout has been—has stunned America’s growing herd of health care wonks. Twenty-five years ago—long before Massachusetts created the template for Obamacare—Oregon began trying to implement universal health care coverage. The state should know more about its uninsured population and how to reach them than any other. But no one who’s watched developments over that quarter-century should be surprised that, once again, Oregon’s attempt to provide health care coverage to everyone in the state has culminated in a nationally embarrassing failure.”
  • House Oversight Committee Investigation. “A U.S. House oversight committee wants to take a closer look at outgoing Gov. John Kitzhaber’s 2014 re-election campaign and any involvement it may have had with Cover Oregon, the state’s failed health care exchange. In a Friday, Feb. 13 letter to Kitzhaber and his office, the Committee on Oversight and Government Reform ordered him to preserve and produce documents pertaining to Cover Oregon “so the committee can better understand the role of campaign advisers in decisions related to Cover Oregon… The letter was sent to the governor the same day he announced he would resign amid an ethics scandal swirling around him and his fiancée, Cylvia Hayes. The committee noted several media reports which raised concerns that the state’s abandonment of Cover Oregon in favor of the federal government’s website was based on politics, not on policy, “and campaign advisers working on your re-election campaign may have coordinated the state’s response to the Cover Oregon rollout” (KATU, 2.15.15).
  • 6 Officials Resigned. Six top officials connected to the Cover Oregon debacle resigned (Associated Press, 11.2.14).
  • GAO Audit RequestedIn a February 12, 2014 letter to the General Accountability Office, Reps. Fred Upton of Michigan and others ask auditors to review why Covered Oregon has been such a technological failure that it still is unable to enroll members despite the infusion of $304 million in federal funds and another $160 million in state funds. Architects of the site purportedly have known of these design flaws as far back as November 2011.

Insurer Losses

  • After a Year of Losses, Many Oregon Health Insurers Seek Bigger 2016 Premiums. “Insurers used educated guesswork to set 2014 and 2015 rates, which in Oregon were lower than expected and some of the lowest in the country. Now, with a full year of cost and claims data under their belts, some insurers are essentially saying the Oregonians they covered turned out to be sicker and costlier than expected. ‘We base our rates on the actual costs of healthcare,’ wrote Moda spokesman Jonathan Nicholas in an email. ‘With more than 100,000 Individual members, Moda has the most complete data available on the care actually being received by these Oregonians. Our proposed rates reflect that.’ Several Oregon health insurers reported losing money last year, including Moda, PacificSource, HealthNet and LifeWise. That list includes some of the insurers planning some of the larger average premium increases, including Lifewise at 38 percent and PacificSource 42 percent” (The Oregonian, 5.1.15).

Rhode Island (considering shut-down)

Solvency Concerns

  • Shut-Down Under ConsiderationAccording to Modern Healthcare (1.10.15), “Colorado, Oregon and Rhode Island are considering abandoning their state-run exchanges and using the federal exchange because of financial struggles.”
  • HealthSource RI Seeks $14.5 million From State to Keep Exchange Alive. “Rhode Island’s state-run Obamacare program faces an uncertain future unless it can scrounge up at least $14.5 million in non-federal dollars for the next state budget year that begins on July 1. That make-it-or-break-it number is contained in a budget request submitted to lame-duck Governor Chafee that became public on Wednesday. The state-run health insurance exchange — known as HealthSource RI — put Chafee on notice that it anticipates spending a total of $27.68 million next year” (Providence Journal, 11.19.14).
  • Rhode Island Must Find Unexpected $4.6M to Fund Obamacare Exchange. “The head of Rhode Island’s HealthSource RI Obamacare marketplace revealed Thursday state lawmakers need to come up with $4.6 million to fund its operations in the next state budget, while urging them not to scrap the local system for the federal one. HealthSource RI executive director Christine Ferguson made the disclosure in a briefing with reporters. She said the federal government has asked Rhode Island to chip in $4.6 million toward the marketplace’s revised $55 million proposed budget for the 2014-15 budget year, rather than rely solely on federal dollars… Ferguson said Obama administration officials are ‘not pleased’ that the idea is gaining traction in Rhode Island. ‘They view us as one of the biggest success stories,’ she said, adding: ‘They are not happy about the idea of having made investments and then having us turn around and say, “Oh, sorry, we didn’t mean it.” That has implications to taxpayers as a whole. Nothing’s free’” (, 5.22.14).

Vermont (financially troubled)

Solvency Concerns

  • Lt. Gov. Phil Scott, Senators Explore Alternative to Vermont Health Exchange. “Lt. Gov. Phil Scott led a mini fact-finding mission to Rhode Island on Monday to learn more about components of the Connecticut health care exchange that could help Vermont save money. The cost of fixing the dysfunctional Vermont Health Connect website will be roughly $200 million, and maintaining the state’s health care exchange on an annual basis will be about $51 million a year. Gov. Peter Shumlin last month said he will pull the plug on the customized website if contractors can’t develop proper functionality for the site with deadlines at the end of May and in October. Since then, various alternatives have been floated, including moving the state’s system to the federal exchange.” (Vermont Digger, 4.9.15)
  • Vermont Health Website Could See $20M Shortfall. “Documents show Vermont Health Connect has an $11 million budget shortfall. It could incur an additional $8.5 million in expenses for which no funding source has been identified. The information was contained in a ‘situation summary’ dated Oct. 23 that was obtained by Vermont Public Radio. Vermont Health Care Reform chief Lawrence Miller says he’s hopeful the state won’t suffer the kind of shortfall projected in the document. He says it’s too early to know what kind of fiscal condition the project will be in at the end of the year. Miller says he had ‘reasonable confidence’ the federal government would cover the shortfall, but there’s a chance ‘there would be some exposure to the state.’” (Associated Press, 10.31.14)
  • Vermont: The Next Failed Obamacare Exchange? “Vermont’s Obamacare exchange still does not work, more than two years after launching. Despite receiving over $200 million in federal funds and more in state funding, the system shows no sign of improvement and may be in a death spiral toward collapse. As reported by Erin Mansfield of VTDigger news, the system is beset by basic functionality problems…the system must be able to accurately process personal information. If this isn’t happening – as Vermont’s exchange has failed to do to date – the entire system breaks down as the federal government cannot tell what level of subsidy an enroll should receive, if they are eligible at all, and if they have maintained coverage or need to pay the Obamacare individual mandate tax. For taxpayers, this means billions more in wasted money through incorrectly paid subsidies. For the more than 30,000 on Vermont’s exchange – this problem has led to dropped coverage, incorrect billing, and a host of other confusing problems.” (Americans for Tax Reform, 2.2.16)

Technical Glitches

  • In Vermont, Frustrations Mount Over Affordable Care Act. “Vermont stands as a cautionary tale. Despite an eventual cost of up to $200 million in federal funds, its online marketplace, or exchange, is still not fully functional, while disgust with the system is running deep among residents and lawmakers alike…’It’s just been a spectacular crash, really,’ said State Representative Chris Pearson, a member of Vermont’s Progressive Party. ‘We’ve gone from this vision of being the first state to achieve universal health care, to limping along and struggling to comply with the Affordable Care Act.’… ‘There’s a backlash against all things health care reform because Vermont Health Connect has been such a bad experience,’ said Trinka Kerr, the chief health care advocate at Vermont Legal Aid, which gets several hundred calls a month from people who have encountered problems with the exchange, including billing errors and even delayed access to care. ‘Sometimes they’ll say, ‘I’ll just go without insurance.’… Pointing out that Vermont’s was not the only state-based exchange to still be struggling, he added, ‘I talk to my colleagues elsewhere and, good God, this just wasn’t set up for success.’” (The New York Times, 6.4.15)
  • Security Fix Need Led To Health Site Shutdown. “Vermont’s top health care reform official says the state’s health insurance website was taken down temporarily because security upgrades did not keep pace with a schedule agreed to with federal officials. Health care reform chief Lawrence Miller told lawmakers Thursday the only way to complete the upgrades was to close down the web portal and complete the improvements” (Associated Press, 9.21.14).
  • Governor Temporarily Pulls Plug On Troubled Health Care Exchange. “The web portal Vermont Health Connect has been plagued with problems since it went live last fall as the state implemented its health care exchange. Tuesday morning, Governor Peter Shumlin, a Democrat, announced that the website had been shut down in order to complete operational, technical, performance and security improvements prior to the November 15th open enrollment” (WAMC Northeast Public Radio, 9.16.14).
  • Vermont Health Connect Backlog Returns Due To New Technical Problems. “On Oct. 1 of last year, Gov. Peter Shumlin summoned reporters to the Statehouse to celebrate a Vermont Health Connect milestone. Shumlin said his team had finally worked through the backlog of people waiting to have changes made to their policies. Even more importantly, he said, no one would have to deal with long waits again… As of Tuesday, however, the backlog is back up to about 3,000 customers… ‘Well I think we’re beyond being surprised at the technical difficulties anymore,’ Gustafson says. He says the latest round of technological hiccups underscore the need for the type of independent assessment of Vermont Health Connect that Blue Cross has been calling for…The state is spending about $45 million a year to operate Vermont Health Connect. The federal government covers about 60 percent of the cost.” (Vermont NPR, 1.19.16)
  • Lawmakers Demand Independent Assessment of Vermont’s Health Exchange. “Calls to pull the plug on Vermont Health Connect grew louder on Friday despite more than $200 million already invested in the troubled health care exchange…’We can give Vermonters what they want, which is just health care they can count on,’ Scott said. ‘They want to be able to pay for it, and they have been paying for it, and their checks have been returned. They have been showing up at the pharmacies and providers and finding out they don’t have insurance,’ he added. Benning offered a lengthy timeline of the exchange’s shortcomings, including a demand from Blue Cross Blue Shield that the state reconcile $3 million to $5 million in past-due premiums for 2014 alone…Another problem is VHC’s backlog in processing customers’ change in circumstance requests. In July, Gov. Peter Shumlin’s health care reform team reported a bottleneck of 6,500 changes needing to be made to customer accounts. Despite a claim in October that the backlog was eliminated, health care officials report a new backlog of  5,700 requests as of Jan. 25.” (, 2.19.16)

Washington (financially troubled)

Solvency Concerns

  • Growing Deficits. Washington’s exchange is facing a $4.5 million deficit this year with a budget of $59.2 million. This deficit is projected to increase to $5.5 million next year even with a larger budget of $75.7 million” (Freedom Works, 5.1.15).
  • Washington State’s ObamaCare Exchange Faces Funding Shortfall. “The state has enrolled 160,000 paying customers in ObamaCare exchange health plans but that’s more than 50,000 short of goal, which has led to an extension of the enrollment deadline and a request that the Washington State Legislature fork over $125 million to fund the exchange” (Fox News, 3.12.15).
  • Health Benefit Exchange Asks to Spend $147M in ’15-17, Close Budget Shortfall. “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 beyond what its current revenues can support, health care regulators said in a meeting of an advisory committee to the exchange’s board of directors last Thursday in Olympia.” (Washington State Wire, 11.10.14)

Low Enrollment

  • Exchange Lost Enrollees Between 2014 and 2015. “Washington retained even fewer people than California—just 62 percent. Total enrollment actually fell by two percent—Vermont was the only other state that lost enrollees. Since enrollment is so much lower than previous expectations, Washington’s exchange is facing a $4.5 million deficit this year with a budget of $59.2 million.
  • Enrollment 24% Below Target. “The state has enrolled 160,000 paying customers in ObamaCare exchange health plans but that’s more than 50,000 short of goal, which has led to an extension of the enrollment deadline” (Fox News, 3.12.15).

Technical Glitches

  • Washington State Health Exchange Reveals Enormous Website Glitch – Tax-Credit Calculations are All Wrong. “Everyone who signed up to purchase a health-insurance policy during the first three weeks of operation got a wrong number when it came time to calculate the federal tax subsidy that would be applied to their premiums. That affects 4,600 people who have already signed up for subsidized health coverage. It also affects anyone else who did any window-shopping at the Washington Healthplanfinder website and who qualifies for a tax credit – some 8,000 applicants in all. The news from Olympia means anyone who thought they were getting a great deal on health insurance better take another look” (Washington State Wire, 10.25.13).

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