Two years into Obamacare, health insurers are paying enough in fees for selling on the law's new insurance marketplaces to cover a majority of the costs to operate them, Obama administration officials said Monday.
The user fees now make up about 70 percent of the costs to run the marketplaces, said Andy Slavitt, deputy administrator of the Centers for Medicare and Medicaid Services. He said he expects that share to keep growing as more insurers choose to offer plans on the marketplaces where low-income Americans can collect health insurance subsidies.
And now that most of the exchanges' infrastructure is up and running, fewer funds are needed to buy expensive technology, Slavitt said. He said this year, CMS is asking for $200 million less to fund IT efforts in the budget President Obama released Monday.
"Getting the program to third, fourth year and the stabilizing of user fees, I think we’ll see a really sustainable path for funding the exchanges going forward," Slavitt told reporters on Monday.
Over the last few years, the administration has asked Congress for more funding to implement the 2010 healthcare law, but Republicans have objected. As a result, officials say they've had to shuffle funding from various sources to pay for setting up the exchanges, which proved a much bigger task than expected when most of the states opted to use healthcare.gov instead of running their own marketplaces.
Officials said Monday that they expect the fees from insurers to eventually fully fund healthcare.gov.
"The need for federal dollars to implement the exchanges will be less as the years go on," said Ellen Murray, Health and Human Services' assistant secretary for financial resources.