Pennsylvania, Delaware to Identify as State-Based Obamacare Exchanges

There seems to be a trend in the United States of people formerly identifiable with one set of easily recognized characteristics deciding that they “identify” as having another set of characteristics.

This is also happening with Obamacare exchanges.

The Supreme Court will soon announce its decision in King v. Burwell, resolving the question of whether Obamacare tax credits can be paid in states using the federal exchange (healthcare.gov) or only in states with their own exchanges. Some states with federal exchanges are trying to “identify” them as state exchanges.

Pennsylvania is one. Delaware is another. But a federal exchange in such states is called a State Partnership Marketplace, and it’s not defined in the Affordable Care Act. The law defines clear blue sky between state and federal exchanges, and that tax credits can only flow through state exchanges. This difference was supposed to create the incentive for states to establish exchanges. It did not work. Indeed, the few states which established exchanges have suffered exploding operating costs.

States’ reluctance to establish exchanges has led to King v. Burwell. Previously, it led the administration to conjure up the notion of State Partnership Marketplaces as “hybrids” in an attempt to lure states into Obamacare. Basically, the federal government has always run the Delaware exchange, but Delaware had its own name on the website and took responsibility for some of the sales and marketing of Obamacare in the state. State Partnership Marketplaces have no greater claim to tax credits than healthcare.gov itself.

Pennsylvania has applied to run a state exchange “using the federal technology platform and infrastructure.” Delaware has made the same application. Both were “conditionally approved” by the Centers for Medicare & Medicaid Services on June 15. It appears that both exchanges have just decided to change their identity from that with which they were born.

We will see if the courts will accept these cosmetic changes.

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