New estimates suggest that Colorado’s ObamaCare exchange is in trouble — mostly because up to 25% of their current enrollees plan to drop coverage.
Colorado’s health-care exchange is expecting nearly twice as many people to drop or decline to pay for their policies, resulting in $1 million less in revenue this fiscal year. In April, the staff projected 13 percent of people will drop or not pay for policies in fiscal 2015, but now they are expecting about 24 percent to drop their policies, according to the latest model. Because Connect for Health Colorado collects a fee on every policy sold through the exchange, the new model expects revenue from that fee to drop from $7.9 million to $6.9 million this fiscal year. According to the revised estimates, Connect for Health expects 35,800 of its 152,200 individuals covered with exchange policies this fiscal year to drop coverage. Next year, it expects 37,400 of 175,000 to drop.
Connect for Health Colorado is facing the fiscal reality that its federal funding which has been subsidizing it — will go away as time goes on. But don’t worry, Coloradans — guess who will pick up the tab? You guessed it — with increased costs on your health care plans!
The exchange is moving from a heavy reliance on federal government grants to being self-funding. The board in June approved $13 million in new annual funding for the next two years that will be raised from a $1.25 monthly assessment on small group and individual health insurance policies in the state. Connect for Health also collects a 1.4 percent administrative fee on its policies. The fee could rise to as high as 3 percent by fiscal 2017.
Interestingly, the Connect for Health board was unable to explain why they expect such a significant drop in enrollee projections this year. Normal churn is expected in every health plan’s yearly cycle — but a loss of 25% of enrollees is something Connect for Health Colorado is going to have to explain to the state’s taxpayers sooner rather than later. Follow Kristina and the FGA on Twitter