US Officials Brace for Huge Task of Operating Health Exchanges

The New York Times reports that the Obama administration is getting ready to set up and operate new health insurance exchanges in about half of the states, where local officials appear unwilling to do so. When Congress passed legislation to expand coverage two years ago, everyone assumed that states would set up their own exchanges.  But many are resisting, putting the onus on federal officials to do the job.

Our Perspective: Setting up and running a health-insurance exchange is no small task.  The Congressional Budget Office estimates that as many as 25 million people will gain coverage through the exchanges over the next decade.

And, as we reported in our July report Modeling the Impact of Pay or Play Strategies on Employer Health Costs, benefits purchased through an Exchange will be more expensive.  In fact, according to our analysis, if an employer were to eliminate group health coverage with no additional subsidy provided to employees to purchase healthcare through an Exchange, each employee would pay about $16,551 per year for Exchange-based coverage (see chart below):

 With stats like this, it’s easy to see where a government-run health-insurance exchange could become a political hot potato.  This will be an important issue to watch as the reform movement continues to take shape.