Obamacare State Exchanges Continue to Perform Poorly

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Posted by Alexander Hendrie on Monday, September 21st, 2015, 1:02 PM PERMALINK

Earlier this month, the Centers for Medicare and Medicaid Services (CMS) released updated 2015 Obamacare enrollment numbers. 29 states and the District of Columbia lost enrollees leading to a net loss of over 238,000 Obamacare enrollees across the country between March and June. The majority of this loss was accounted for by enrollees lost by state exchanges – enrollees on these exchanges fell from 2.9 million to 2.7 million in that time period.

This outcome is bad news for the long-term sustainability of state exchanges. While both federal and state exchanges rely on paying enrollees to meet costs, the 37-state federal system has the scale to absorb lost enrollees. In comparison, state exchanges have just a fraction of enrollees to pool resources, yet face similar costs.

Poor performing state exchanges include Rhode Island and Vermont, which enrolled 32,451 and 33,306 individuals respectively. This poor performance means each state spent over $5,000 in federal funds for each enrollee on their state exchange. Given the low potential marketplace in both states, it appears certain to be an uphill battle to meet ongoing expenses.

Other poor performing states include failed exchanges Hawaii and Oregon.

Oregon received $305 million in taxpayer funds, but has since defaulted back to the federal system. Currently, the state has over 102,000 enrollees, meaning the state wasted almost $3,000 in taxpayer funds for each Oregonian currently enrolled on the federal system. The state is now under investigation for misuse of taxpayer funds and allegations that decision making was given to political consultants who were more concerned about the governor’s tough 2014 reelection campaign than the wellbeing of healthcare enrollees.

Similarly, Hawaii received over $205 million in federal grant money and the state enrolled just 8,802 individuals this year, meaning it spent a remarkable $23,329 on its failed system per enrollee this year. Unsurprisingly, this level of spending was not sustainable - the exchange recently announced it had no way of meeting operational costs and would transition its enrollees to the federal exchange.

Below is an analysis of the performance of each state exchange:

State

Total Federal grant $ for exchange[1]

2015 Enrollment[2]

Total spent constructing exchange per enrollee for 2015

California

$1,065,683,056

1,393,567

$765

Colorado

$184,986,696

122,976

$1,504

Connecticut

$175,870,423

92,213

$1,907

D.C.

$195,141,152

14,367

$13,582

Hawaii

$205,342,270

8,802

$23,329

Idaho

$105,292,525

85,981

$1,224

Kentucky

$289,303,526

88,904

$3,254

Maryland

$190,080,144

120,517

$1,577

Massachusetts

$233,807,787

156,448

$1,494

Minnesota

$189,363,527

49,066

$3,859

Nevada

$101,001,068

60,879

$1,659

New Mexico

$123,281,600

44,307

$2,782

New York

$575,079,804

370,058

$1,554

Oregon

$305,206,587

102,952

$2,964

Rhode Island

$152,574,404

32,451

$5,016

Vermont

$199,718,542

33,306

$5,719

Washington

$302,333,280

164,280

$1,900

Total

$4,594,110,697

2,941,074

$1,562

 

State Exchanges underlined have returned to the federal exchange

 

[1] http://www.gao.gov/assets/680/672565.pdf

[2] https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-09-08.html

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