WA: Funding the Exchange in the 2013 budget

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One interesting point regarding the two health care budgets which came out in Olympia in the last 8 days is the question of funding the health benefit exchange.

While we’ve raised questions about particular approaches to exchange funding, those have been assuaged by the language in HB 1947.  That bill allocates premium tax collected from plans on the exchange to fund exchange operations.  It also collects premiums from Medicaid plans which collect premium from newly eligible beneficiaries.  If the exchange is short any funds after those collections, it can assess a fee on qualified health plans on the exchange to make up the shortfall in funding exchange operations.

That bill is moving forward and generally looks likely to pass.

Except it has to be funded in the budget.

And, while yesterday’s House budget provides full funding for the exchange at about $110m for two years, the Senate budget only funds half of that.  From the Senate budget (“Agency Detail”).

The amounts provided are contingent on the health benefit exchange developing a self-sustaining methodology under which revenues to the exchange from charges to health carriers, premiums paid by enrollees, and receipts from the state from appropriations do not exceed $26,000,000 annually. This funding level is about 50 percent of the Exchange funding request. (General Fund-State, General Fund-Federal).

Even with full funding, the exchange is planning on a challenging financial path to sustainability, as outlined in a recent staff presentation to the Exchange Board.