The prospect of stiff new fees for using the federal Healthcare.gov online marketplace is causing several states to consider launching their own Affordable Care Act platforms, despite some previous attempts that cost hundreds of millions and ended in failure.
New federal fees of 3% of monthly premiums would affect Oregon, Nevada, Hawaii and New Mexico, who all switched to Healthcare.gov after abandoning plans to build their own exchanges because of technical problems.
Oregon, which moved to Healthcare.gov after spending over $300 million for a system that did not function correctly, is looking at licensing software from one of the states that have successfully developed their own platforms.
The Department of Health and Human Services has proposed the 3% fee, which would begin in the 2017 plan year, to cover the cost of running the website and related technology. It has discussed charging a reduced fee of 1.5% in the first year, to help states make the transition.
The new fee would be in addition to the 3.5% fee on premiums for states that use the Healthcare.gov platform. States that run their own exchange portals, such as California, New York, Connecticut and 10 others, don’t pay this fee, but may impose their own charges on insurance carriers.
The fee would increase insurance costs by $13 million in Oregon, $7 million in Nevada and $5 million in New Mexico. Officials in Hawaii have not yet calculated the cost.
The additional expense comes at a time when some insurance companies are reporting losses of millions more in claims than they anticipated on Affordable Care Act policies, and a sharp reduction in funds available from the federal government to cover these losses.
Oregon officials said the proposed 3% federal fee would essentially double costs for health insurance carriers. The state already charges the companies $9.66 per month for each of the 107,000 individuals they insure, which it says equals 2.9% of average premiums paid.
