New England Raking in $$$ for ACA Exchanges, $351 million and counting

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Josh Archambault, Director of Healthcare Policy at Pioneer Institute in Boston

Many supporters of the ACA contend that the Massachusetts health care law is the exact same as the federal version. (Some have even used colorful language to make this point.)

A proxy for how big the changes will be is the level of funding coming from the Federal government to bring the Massachusetts Connector into compliance with the ACA.


$48,236,271 and counting.

Or is that $57,131,300, with an award supplement to “accelerate changes in its current Exchange IT infrastructure.”

MA HHS grants so far.

To be fair $36 million of this money is for a New England regional exchange for Connecticut, Maine, Massachusetts, Rhode Island, and Vermont.

However this has not stopped the Federal government from separately awarding Connecticut, Vermont, Rhode Island planning, level one and level two establishment grants.

Exchange costs

Source: Author’s calculation from CBPP and HHS reports.

Exchanges are targeted at small business employees and individuals, and by default exclude all covered lives for Medicare, Medicaid, and most employees of large self-insured companies. The ACA chose public exchanges as the exclusive distribution channel for premium subsidies.

Given the $351 million price tag and counting, one is left to wonder why Congress didn’t give a refundable tax credit for insurance and let all employees utilize private exchanges (costing taxpayers zero planning dollars) such as NFP in Massachusetts, Bloom Health in the Midwest or HealthPass in NY.

Taxpayers are left to ask if they will, at minimum, receive $351 million in value from these exchanges in New England, as we have not included Massachusetts’ Level 2 application. And don’t forget to add the ongoing cost of the annual subsidies, and the annual assessments required to fund the operations of a public exchange in each state, roughly $40 million in Massachusetts as of today.

Find me on Twitter: @josharchambault

UPDATE: State officials have confirmed that the cost is $57 million so far, and a Level 1 a grant has recently been submitted for an additional $42 m. This would bring the MA total up to almost $100 million. A level 2 grant is also being discussed and planned.