Blog note, Health Care, Linda Gorman

More Perspective on the Colorado Health Benefits Exchange

Before Obamacare, health insurance premiums for older adults were about 6 times as high as those for the youngest adults. Obamacare supporters disliked this for ideological reasons, so they arbitrarily decreed that the older people should have premiums only 3 times as high as the youngest adults.

Premiums for the youngest adults went up, making health insurance a bad deal for them. This is reflected in the age distribution of enrollment in the Colorado health benefits exchange for the period October 1 to November 30, 2013. The original data are here.

At the end of November, total enrollment was 9,980. By December 9, enrollment was 15,074, about 177 more people than the number of Coloradans who had their policies canceled by the state and the federal government.

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The exchange has been financed by $177,683,424 in federal tax money. It has collected $15,000,000 in reserves from CoverColorado, the state insurer that used to provide subsidized policies to people who were uninsurable. It is being dismantled under Obamacare, and Connect for Health Colorado expects to collect an additional $8,500,000 from it in the spring of 2015.

icon_blog_noteIn 2013, Connect for Health Colorado collected almost $44 million in grants. Expenses for 2013 were almost $27 million. It expects to have about $29 million remaining from its grants by the end of 2014. With all that free tax money sloshing around, it should come as no surprise that exchange president and CEO Patty Fontneau wanted yet another raise from her current salary of $190,550. Chief Operating Officer Lindy Hinman and Chief Financial Officer Cammie Blais both make $164,800. In 2009, those salaries gave them household incomes that were higher than 90 percent of the households in Colorado.

Even if current enrollments double by the end of the year, the taxpayers will have spent about $900 per enrollee this year. Compare this to the Lewin Group’s estimate of $239 million in uncompensated care for the whole state in the mid-2000s, at a time when people were claiming that there were roughly 700,000 uninsured people. This works out to roughly $350 in uncompensated care per uninsured person.

Under Obamacare, taxpayers are spending $900 to enroll an uninsured person, and then spending even more to subsidize his health insurance. It would be a lot less expensive to repeal Obamacare.

Linda Gorman is health care policy center director at the Independence Institute, a free market think tank in Denver.

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