Dive Brief:
- Oregon dropped its exchange, Cover Oregon, last spring and switched to the federal website to enroll residents in health coverage. But with a new fee on the horizon for some states using federal exchanges, Oregon is considering running its own exchange, but with different software.
- Aaron Albright, director of CMS' Media Relations Group, told the Associated Press a lower fee of 1.5% (the proposed fee is 3%) is being considered for 2017 to help states adjust. There is already a 3.5% fee on premiums in states that use the federal exchange.
- The new fee could be a big setback to insurers who lost millions in claims from setting their rates too low over the past two years. In addition, insurers will not get money previously promised from the federal government to cover claim costs that were higher than expected.
Dive Insight:
A state-run health insurance exchange has seen its share of bad press in Oregon. Cover Oregon used an incorrect formula to award the tax credits to the policyholders, resulting in errors in premium subsidies.
According to the Associated Press, Oregon residents enrolling in 2016 will see some of the highest rate increases in the nation. The 3% fee costs carriers $13 million a year, Patrick Allen, director of Oregon's Department of Consumer and Business Services, told the Associated Press.
The state is considering using exchange software with a "demonstrated track record" instead of developing an exchange website from the ground-up. Allen said the cost of the software would be covered through an assessment on premiums.
Other states where insurers may be charged a federal fee -- New Mexico, Nevada, and Hawaii -- all raised concerns about it being excessive. If necessary, New Mexico officials said the federal fee may cause them to consider dropping the federal platform.