Gov. Mary Fallin's critics still haven't forgiven her for turning down a $54 million federal grant to set up a state-run insurance exchange. These exchanges, mandated by Obamacare, will supposedly help the uninsured obtain subsidized coverage. Fallin concluded that federal regulations would make the exchange state-run in name only. She opted to instead let the federal government have sole responsibility for its creation and maintenance.
Rising costs associated with state exchanges indicate that Fallin made the right call. In Colorado, officials accepted $61 million in federal grants to set up an exchange. The Denver Post now reports Colorado officials may request an additional $125 million in federal money, meaning the total startup costs could near $200 million.
Officials say $14 million will be needed to hire “navigators” to walk new insurance customers through the subsidies, $14.4 million will be required for marketing, $33 million is needed to build and staff a customer call center, and more than $50 million will be used for hardware, software and technology management.
As we recently noted, Federal Health and Human Services Department (HHS) budget documents show the agency now expects to spend $4.4 billion by the end of this year on grants to help states set up insurance exchanges, nearly double the amount projected just one year ago.
HHS is also seeking another $1.5 billion to help set up federally run exchanges in states that do not establish their own.
Colorado state officials are already preparing for increased state expenses tied to operating the exchange. The Colorado Senate has passed a bill allowing a fee to be charged to citizens using the exchange. The price is currently nominal, but that can certainly change.
State exchanges' costs keep rising; their alleged benefits remain uncertain at best. Fallin's decision means Oklahomans' state tax dollars won't be diverted from core government functions to prop up increasingly expensive exchanges.