The Honeymoon Period Is Over for Obamacare's State-Run Exchanges

The Government Accountability Office announced on Wednesday that it will look into the problems with the nation's five really bad state-run Obamacare exchanges.

The Government Accountability Office announced on Wednesday that it will look into the problems with the nation's five really bad state-run Obamacare exchanges. This marks the end of the period when, given how bad the federal exchange was, state exchanges (and the mostly Democratic leaders who advocated for them) were seen as an example of what states could accomplish if they embraced the law. And while that's still true — Kentucky, Connecticut, and California still deserve bragging rights for their exchanges — the inadequacies of the worst exchanges are more glaring than ever.

According to the Associated Press, the GAO will investigate how Massachusetts, Hawaii, Maryland, Minnesota, and Oregon used federal funds, whether the government can recoup any of those funds, and what can be done to prevent similar failures in the future. Last month a group of Republican representatives, including one from Oregon, requested the investigation. The next day Oregon's two Democratic senators echoed the request, because there is literally nothing to defend. Oregon's exchange, which, $210 million later has not enrolled a single person online, is objectively the worst healthcare exchange in the country.

Even Colorado, which hired a woman indicted for embezzlement in Montana to be one of its directors, has a better exchange. A bipartisan group of state legislators voted to move forward a bill to audit the exchange, make sure it will become financially self-sustaining by next year and, for obvious reasons, make sure background checks are thorough.

Exchanges that are working perfectly fine and not staffed with potential white collar criminals are also vulnerable to criticisms. California's exchange is being sued by a Republican state senator for not enacting the "if-you-like-your-plan" fix introduced late last year. “This lawsuit stands with consumers and puts a stop to this unchecked government abuse,” state Sen. Ted Gaines, who is running for state insurance commissioner, said in a statement Wednesday. Gaines' opponent, the incumbent Commissioner Dave Jones, supported adopting the "keep your plan" fix, and has urged Covered California to reconsider.

Gaines' timing may or may not have something to do with the fact that the administration announced the same day that states can allow insurers to offer non-compliant plans for two more years. But he's also benefiting from the fact that the bar for state-run exchanges is a lot higher now. Now that the federal exchange works it's no longer enough to just be functional.