Health Care, Linda Gorman, Obamacare

The Colorado health exchange costs federal taxpayers $1,427 per enrollee

A May 2014, report from the law firm Mehri & Skalet estimates that the Colorado health exchange is costing federal taxpayers $1,427 per enrollee. That was before its director, Patty Fontneau, got the $14,000 bonus, and a 2.5 percent salary bump that raised her salary to $195,314 a year and sweetened an already generous retirement plan. Only exchange directors in California and Connecticut make more.

In California, the exchange cost is $758 per person. In New York it is $1,158 per person. In Washington, it is $1,630 per person, in Connecticut it is $2,077 per person.

icon_blog_noteOn average, it has been more expensive for states to run state exchanges than to join the federal exchange, something that critics of the Colorado effort warned would be the case. The average cost per enrollee in all of the states that use the federal exchange is an estimated $922 per enrollee. All of the states with the lowest cost per enrollee are in the federal exchange. In Florida, the average cost per enrollee is $76, in Texas it is $102, and in Georgia it is $240. The average cost per enrollee for the state do-it-yourself projects is $1,503.

So far, the federal government has spent $7.394 billion building health exchanges to deliver subsidies for the purchase of its poorly designed coverage products. By 2019, the Congressional Budget Office estimates that federal exchange premium, cost-sharing, and insurer risk corridor subsidies will cost $127 billion a year, $6,240 per person enrolled. This does not include the amount that the states will collect in order to run the state exchanges.

Recall that public support for the Obamacare health exchanges was whipped up by people complaining that the US system was broken because people were getting health care without paying for it and those costs were unfairly added to private insurance premiums. In 2009, researchers at the Urban Institute estimated that the cost of uncompensated care was $63 billion a year. They warned that unless Obamacare passed, annual uncompensated care costs would inflate to at least $107 billion, possibly going as high as $141 billion, by 2019.

Instead the Democrats passed Obamacare. It is working so well that $127 billion a year will be added to tax bills to cure a problem that the private sector was handling for $63 billion.

Linda Gorman directs the Health Care Policy Center at the Independence Institute, a free market think tank in Denver.


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