Health Insurance

Could these guys help save Obamacare from the Supreme Court?

This might be a lifeline for states that want to keep Obamacare health plans affordable for millions of their residents.

The online health insurance brokerage GetInsured this week revealed it is offering to help states create their own Obamacare marketplace in just 60 days—for very little, if any, upfront costs.

Such a quick turnaround might soon become an attractive option for a number of states if the Supreme Court rules that customers cannot be given federal financial aid to help pay for their monthly health plan premiums—a potential outcome in the King v. Burwell case.

The marketplace opportunity we have is very strong regardless of King v. Burwell.
Chini Krishnan
CEO of GetInsured
GetInsured CEO Chini Krishnan
Courtesy GetInsured

But not every state on that federally run Obamacare exchange would necessarily want GetInsured's lifeline.

"If a state is on the [] platform today and desires to move from the ... platform, then that is something that we can accomplish very, very quickly," said Chini Krishnan, CEO of GetInsured. "As a practical matter, if King v. Burwell went against the administration, I think we would see a rush of states wanting to explore their options, quickly."

Read MoreObamacare's 'modest' price effect

Krishnan told that GetInsured is already in discussions with between three and six states—most of them now on—about using what his company calls its "Lean State-Based Marketplace Model."

GetInsured may have some competition from hCentive, a health insurance tech company whose own own Obamacare exchange platform was adopted by Massachusetts for enrollment this past season.

Rival has 'out of the box' solution

The CEO of hCentive, Sanjay Singh, last month told CNBC that other states could use that platform "out of the box," and, "We can guarantee them open enrollment for 2016."

Currently, 37 states use's platform in one way or the other to enroll residents in private health insurance plans—and at least 34 states' residents are at risk of losing subsidies. The remaining states and the District of Columbia run their own Obamacare exchanges, and their subsidized customers are not at risk.

Read MoreObamacare windfall: Big drop in uncompensated care

A ruling in the Supreme Court case, which could eliminate billions of dollars in tax credits for around 7.5 million customers, is expected in late June. That's less than five months before open enrollment in Obamacare plans for 2016 is set to begin, complicating the ability of affected states to implement a fix to keep subsidies flowing.

If the court rules for the plaintiffs, more than an estimated 8 million people would drop their individual insurance plans because they would become unaffordable without the subsidies, and because retail prices could significantly rise for the remaining nonsubsidized customers.

The plaintiffs claim the Affordable Care Act doesn't allow subsidies for customers of a federally run exchange, because there is no explicit language in the law authorizing such help. The ACA does explicitly say that the tax credits can go to to customers of exchanges established by a state, if those people earn between 100 and 400 percent of the poverty level.

The Obama administration argues the ACA allows subsidies regardless of whether the customer is on a federal or state exchange.

Just having the technology available doesn't mean that states can quickly and easily set up insurance marketplaces.
Larry Levitt
senior vice president, Kaiser Family Foundation

Although states that would be affected by the ruling are, in the short term, the most obvious potential customer for GetInsured's exchange platform, Krishnan has a bigger goal.

"We think the potential market is really, in the long run, all 50 states," said Krishnan, who touted his company's work setting up California and Idaho's state-run Obamacare exchanges as well as small-business health insurance exchanges in New Mexico and Mississippi.

Read MoreUninsured rate drops to lowest level yet

"The marketplace opportunity we have is very strong regardless of King v. Burwell," said Krishnan. He said GetInsured's platform would give consumers, insurers, brokers and administrators "a far better user experience" that will translate into higher enrollments.

No added cost to taxpayers

GetInsured would make its money from charging states a fee based on the number of customers maintained per month on the exchange it sets up.

Krishnan wouldn't disclose the percentage it would charge. But because the exchange's technology platform could be shared between states, "this is substantially more economical than what states are currently paying on the platform," which charges a 3.5 percent user fee, Krishnan said.

"The solution requires no federal grants or additional cost to taxpayers," GetInsured said in a press release.

Ariel Fernandez, left, sits with Noel Nogues, an insurance advisor with UniVista Insurance, as he signs up for health insurance under the Affordable Care Act in Miami.
Getty Images

When asked about GetInsured's idea, Dan Mendelson, CEO of the Avalere Health consultancy, said, "This is a strong platform, I've actually seen it." But he cautioned that, "in the end, the state has to want this."

"There's a lot of states that are just ideologically against the program" of Obamacare, Mendelson said. "Those states are not going to jump on this."

And in fact, many of the states on are there because their governors or legislatures opposed President Barack Obama's signature health-care reform law, and weren't interested in helping it get implemented by running their own insurance marketplace.

Read MoreThe kids aren't all right: 3.3M may lose insurance

Mendelson also expects there would be significant technological hurdles in integrating the data necessary for a state-based exchange to function in time for open enrollment. But, he added, "I think the federal government will be bending over backward to help these states get these plans to low-income populations" if it loses at the Supreme Court.

Political and technical barriers

Obamacare expert Larry Levitt, a senior vice president at the Kaiser Family Foundation, said, "Just having the technology available doesn't mean that states can quickly and easily set up insurance marketplaces in the event of a Supreme Court decision for the plaintiffs in King."

"There would be political barriers in some states that would stand in the way of them going along with Obamacare, no matter how easy it was to do operationally," Levitt said. "Even in states that wanted to set up marketplaces and keep subsidies to their residents flowing after a court decision, the process would take time and insurance markets would likely melt down in the meantime. Legislatures would have to pass laws to pave the way for new marketplaces. Staff would have to be hired and outreach plans would have to be put in place. It could happen with some transition period, but it couldn't happen overnight."

That said, Levitt expects "there would be a number of states motivated to set up their own marketplaces to maintain the subsidies. Those would likely include states that are currently working in partnership with the federal government to run the marketplace as well as those that have chosen to expand Medicaid. The politics in those states seem amenable to going along with Obamacare, at least to some extent."

And Levitt said that if a grace period was given to keep the subsidies intact until at least the beginning of 2016, "some states, though certainly not all, would likely act to stabilize the insurance market and keep the subsidies going."