Five Obamacare State Sites May Cost Millions to Fix or Abandon

Wednesday, 04 Jun 2014 08:40 AM

By Melanie Batley

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Five states that launched their own Obamacare marketplaces may need to spend as much as $240 million to fix their faltering sites or close them entirely and switch to the federal marketplace, according to an analysis by The Wall Street Journal.

Maryland, Massachusetts, Minnesota, Nevada, and Oregon could be using state funds, remaining federal grants or request new funds from the federal government, prompting debates among state lawmakers about public spending priorities.

GOP lawmakers in Washington say they don't want another dollar spent on the failing systems, which in total have already been given $700 million in taxpayer funds.

"I don't think more money will solve the problem," Wyoming GOP Sen. John Barrasso told the Journal. "We should stop the bleeding."

Oregon has already been allocated $225 million of federal funds for Covered Oregon, which is on the brink of collapse. It would take another $41 million to upgrade the exchange or migrate to, according to Journal estimates.

Minnesota has spent or been allocated $141 million for its exchange and may need about $5 million more. Massachusetts was given close to $135 million and would need another $121 million to stay afloat or switch over.

Maryland had $118 million in federal funds for its faltering exchange and may need another $40 million or $50 million to make things right, while Nevada received $52 million and might need another $25 million, the figures show.

Democrats are sensitive to the political implications of the options facing these states: closures of state exchanges could confirm GOP criticism of Obamacare failures, while spending more federal funds on failing systems could also make Democrats vulnerable to political attacks in an election year.

"We are supporting states' efforts to operate marketplaces that work for consumers and taxpayers in the most cost-effective ways possible," Aaron Albright, spokesman for the Centers for Medicare & Medicaid Services, told the Journal.

"We are closely monitoring how grant money is being spent and working to ensure that all consumers can gain new health coverage options offered in the marketplaces."

In total, 14 states built their own exchanges for 2014 using an estimated $4.7 billion in federal funds. The healthcare law stipulates that state marketplaces must financially sustain themselves after their first start-up year and would not allow grant requests for 2015.

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