The Supreme Court could potentially shut down Obamacare subsidies for enrollees in 37 states — that is, those states that currently rely on the federal exchange — if it rules against Obama in June. And if it does, many believe it will compel those states that have resisted establishing their own exchange to finally do so.
But, no so fast. The Washington Post reported last week that Obamacare’s state exchanges aren’t doing so hot:
Nearly half of the 17 insurance marketplaces set up by the states and the District under President Obama’s health law are struggling financially, presenting state officials with an unexpected and serious challenge five years after the passage of the landmark Affordable Care Act.
Many of the online exchanges are wrestling with surging costs, especially for balky technology and expensive customer call centers — and tepid enrollment numbers. To ease the fiscal distress, officials are considering raising fees on insurers, sharing costs with other states and pressing state lawmakers for cash infusions.
Some of the state exchanges are in truly dire straits. For example, Oregon spent $200 million to develop an exchange only to abandon it because of “pervasive and intractable technical problems.” Meanwhile Vermont spent $400,000 per uninsured resident to develop its exchange — or more than enough to buy a pre-Obamacare plan for everyone for an entire year — only to consider abandoning ship, as well.
If the 37 states currently relying on the federal exchange rushed to set up their own marketplaces following King v. Burwell, we would surely see more of the same.
Oh, and let’s not forget the “risk corridors” built into Obamacare:
The program uses a large tax on insurers who make windfall profits to cover other insurers’ large losses. But as Bloomberg reported Friday, too many of the insurers are losing money and not enough are making bank. As Bloomberg noted, “There may be just $1 in the piggy bank to cover every $10 in claims at an Obamacare program designed to spread risk among insurers.”
Obamacare isn’t working, and it can’t work as is, no matter what the Obama administration wants you to believe.