The dozen ObamaCare exchanges run by the states are struggling financially and could be headed toward collapse over the next several years, according to a new report released Tuesday by House Republicans.
All of the active state-run exchanges are still relying on federal dollars, nearly two years after they were supposed to be self-sustaining under law, according to a lengthy report by Republicans on the House Energy and Commerce Committee.
Investigators blasted the Obama administration's oversight and management of the state exchanges as "a costly mess."
States have received a total of $4.6 billion in federal grants to launch their own exchanges, according to the report.
The use of those federal dollars is “entirely subject to the whims of state governments,” the report said, citing a decision by the Centers for Medicare and Medicaid Services to tweak its grant funding rules to help states with their operational expenses. The grants were originally intended to be used only for establishing the exchanges.
Facing higher costs and lower insurance enrollment than expected, Republican investigators said, several states have turned to “misusing federal grant dollars in order to stay solvent.”
States have long worried about how their exchanges would survive once the federal dollars supporting them ran out in 2016. Under the healthcare law, states that are not financially self-sufficient by 2016 are required to join the federal system, HealthCare.gov.
The report found that many state governments have repurposed their federal grants and some misused Medicaid funds to “cover the gap,” according to the 69-page report.
A total of 17 states opted to create their own exchanges during the launch of ObamaCare in 2013. By the next year, five of the original state-run exchanges had closed.
“It is likely that the remaining [state-based exchanges] will eventually opt out” of running their own [state-based exchanges] as well,” the report states.
Republicans have long argued that states should have to pay back the money if their exchanges are no longer operational.
The four state exchanges that have closed so far have “suffered no repercussions for wasting a combined $239 million federal dollars” on creating their websites, the GOP report states.