Last week the Washington Health Benefit Exchange board approved a $59.2 million budget for 2015. Legislators have only authorized up to $40 million for the exchange. The Seattle Times reports,
A consultant’s report estimated the exchange would enroll about 85,000 new individuals in private health plans through the exchange for 2015 coverage, for a total of about 233,000 by the time enrollment is over in February 2015. But most board members expect those people may be harder to find and enroll than enrollees were in the exchange’s first year, and many expressed reluctance to cut activities focused on helping people get through the process. . . .
Because the majority of people who obtained health insurance for 2014 through Healthplanfinder ultimately enrolled in Medicaid, the state has agreed that Medicaid should pay a share — from 35 to 37 percent — of some of the exchange’s operating expenses, based on enrollments.
The reimbursement from Medicaid is one revenue source for the exchange, and the latest figures estimate that at the agreed formula, that would bring from $20 million to $22 million to the exchange in 2015. About $6.4 million of that would come from the state’s general fund, and the rest from the federal government, which has to sign off on the calculation.
Other revenue sources for the exchange include its share of a 2 percent tax on all insurance premiums, calculated at about $22.8 million based on estimated enrollment for next year. The Office of the Insurance Commissioner collects the tax, which goes into the state’s general fund. Then the Legislature allocates to the exchange an amount based on policies it sold.
The third revenue source is an assessment on premiums. A per-member-per-month assessment of about $4 has already been “baked into” premiums for plans in 2015, said Bob Nakahara, the exchange’s chief financial officer, and amounts to about $10.6 million.
In every case, said board member Don Conant, the revenue streams are contingent on the number of people the exchange enrolls in health plans or Medicaid for 2015 coverage. “We have got to generate this revenue if we want to see it,” he said.
A lot of unknowns here. As the Seattle Times noted last December, the state estimated at the time that there would be 280,000 enrollees in private plans by January 2015, but that number has been significantly reduced, as noted above. Will even the new lower target be met? (The numbers cited above sum to only $55 million — enrollment would have to be even more robust than expected to hit $59 million.) How will the federal government respond to being asked to pay for a share of operating expenses? Will the state Legislature, already facing serious budget challenges, agree to spend millions more on the exchange than it had been expecting?