States Could Tap Cloud Tech if SCOTUS Rules Against ACA Subsidies

June 13, 2015 in News

If the U.S. Supreme Court this month rules that subsidies through the federal health insurance exchange are illegal, affected states could leverage the cloud-based technology used on to set up their own exchanges, CIO reports (Patterson, CIO, 6/10).


The subsidies are being challenged in King v. Burwell (Kalish, Employee Benefit News/Health Data Management, 6/12). At issue in the case is whether subsidies can be made available for individuals with coverage purchased through the federal exchange, or whether the aid is available only for state-established exchanges (CIO, 6/10). If the Supreme Court rules that the subsidies are illegal on the federal exchange, 6.4 million U.S. residents could lose their financial assistance, according to an analysis by the Kaiser Family Foundation (Employee Benefit News/Health Data Management, 6/12).

Cloud-Based Alternative

According to CIO, all 37 states using the federal exchange have a cloud-based alternative to help them establish a state-operated exchange.

When first launched, it was plagued with various technical problems and was redesigned to operate as a software as a service (SaaS) application that runs on a computing cloud, called Amazon EC2 cluster. Because runs using SaaS — a software licensing and delivery model in which software is licensed on a subscription basis and hosted on a central network — the software can be customized and used legally on a separate computing cloud.

According to CIO, using the technology could help states transition to their own exchanges at a lower cost than designing a custom state exchange.

However, states must overcome various hurdles, such as obtaining a governor’s executive order or passing legislation, to make and sustain the transition.

Three states — Arizona, New Mexico and Oregon — already have transitioned to state-run exchanges using this method, CIO reports. HHS spokesperson Aaron Albright could not confirm whether additional states were seeking to do so (CIO, 6/10).

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