Access Health CT’s board of directors adopted a 2017 budget that is about $2 million, or 6 percent, more than it forecast in 2016.
Board members for Connecticut’s insurance exchange unanimously approved a $34.6 million budget for the 2017 fiscal year, an increase over the $32.6 million forecast for this year, at their monthly meeting May 19 at the Legislative Office Building.
The budget increase is driven in large part by two factors: expiring federal grants and expenses related to a new call center, said Access Health CT CFO Steven Sigal, who presented the budget to board members.
“We have a lot of things changing in 2017,” he said. “The grants that we’ve been operating under, basically, have fully culminated and expired. We have one little piece left of one of our Level 1 (grants) that will expire in December.”
Like many of the state health insurance marketplaces formed in the wake of the Affordable Care Act, which requires all individuals to have health insurance, Access Health received federal grant money to help cover startup costs.
As those funding streams dry up, Sigal said, funds have to come from elsewhere.
“You’re seeing the machinations of not having grant funding anymore, to the extent that we had before,” he said as he outlined next year’s budget.
In 2017 the bulk of funding for the exchange – 94 percent – will come from assessments on private insurers and just 6 percent will come from grants, according to his presentation to the board.
In addition, Access Health has put out a request for proposals seeking a new vendor for its call center. As it awaits a new vendor, the budget has a placeholder for $18.8 million earmarked for the call center, part of which will go toward startup costs, according to Sigal.
Earlier in the meeting, Access Health CEO James Wadleigh Jr. said marketplace officials hope a new vendor will exponentially improve the performance of the call center.
Another line item showing an increase is the one devoted to salaries, which is slated to rise by a little less than $1 million next year, compared with this year. Sigal said most of that increase reflects temporary jobs that will be made permanent next year, as the marketplace adapts to meet its needs.
In an “anomaly” that other states don’t have, Sigal said the Connecticut marketplace’s budget also includes costs for an All Payer Claim Database, for operations as well as development and implementation.
A delay in the development and implementation of the database shifted expenses into 2017 that otherwise would have been funded by federal grants that have now expired. That grant money, Sigal noted, was used for other development and implementation expenses.
Despite the fact that Access Health’s budget will increase next year, the overall cost of operating the exchange is expected to decline. Under the 2017 budget, expenses will total $66.4 million, down 15 percent from the $78.4 million in expenses forecast for 2016.
But the two other components contributing funds to the exchange – federal grants and Department of Social Services reimbursements – are both expected to drop next year, leaving Access Health to pick up an increased share of the tab.
In 2017, according to Sigal’s presentation, DSS reimbursements are expected to total $29.7 million, down from $37 million forecast for this year, while grants are expected to total just more than $2 million next year, down from $8.8 million forecast this year.
The drop in overall expenses for the exchange are due to decreased development and implementation costs, Sigal said.