Federal Taxpayer Cost Per "Pre-Effectuated" and Paid Enrollee


We've seen a lot of news stories trumpeting "enrollment" numbers from HHS with very little context to understand how many people have actually paid their premiums and how many have simply "selected a plan" in a shopping cart, which HHS refers to as "pre-effectuated enrollment."

We've also seen very little analysis of how much federal taxpayers have been forced to pay to build and market the new Obamacare exchanges.  Those costs have now totaled $6.9 billion ($4.9 billion in grants to states and $2 billion for the federal Healthcare.gov).  And that's not including an additional $1.4 billion HHS anticipates spending on Healthcare.gov in fiscal 2014.

Some of the states are performing absolutely miserably on a cost basis, such as Hawaii, which has spent over $44,000 of federal taxpayer money per "person who selected a plan," the District of Columbia, which has spent over $27,000 of federal taxpayer money per paid enrollee. All of the state exchanges are more costly to taxpayers than the much-maligned federal healthcare.gov.

The chart below was compiled from three sources: total federal grants to state exchanges based on CMS data compiled by Americans for Tax Reform, the latest HHS enrollment report, and a compilation of payment rate data from state exchanges compiled by CNBC. Where the state-reported "selected a plan" number reported by CNBC differed from the HHS report, the former was used.

Obamacare Exchanges: Federal Grant Costs Per "Pre-Effectuated" and Paid Enrollee
  Exchange grants from federal taxpayers "Number of Individuals Who Have Selected a Marketplace Plan" Exchange cost per "Individual Who Selected a Marketplace Plan" Reported Paid Rate Estimated Paid Enrollment Estimated Exchange cost per Paid Enrollee
Hawaii $205,342,270 4,661 $44,055      
Washington, D.C. $133,573,928 6,516 $20,499 75% 4,887 $27,333
Vermont $208,232,414 24,326 $8,560 59% 14,342 $14,519
Massachusetts* $179,036,455       12,965 $13,809
Oregon $305,206,587 38,806 $7,865      
Rhode Island $134,719,994 19,690 $6,842 83% 16,345 $8,242
Kentucky $253,698,351 54,945 $4,617      
Minnesota $155,020,465 33,722 $4,597 90% 30,350 $5,108
Maryland $171,013,111 38,070 $4,492 54% 20,558 $8,319
Connecticut $184,096,903 57,465 $3,204 92% 52,868 $3,482
Nevada $83,775,083 30,015 $2,791 70% 21,011 $3,987
Colorado $178,683,411 83,469 $2,141      
New York $429,065,407 244,618 $1,754      
California $910,605,370 923,832 $986 85% 785,257 $1,160
Washington $181,392,299 191,081 $949 57% 108,916 $1,665
Healthcare.gov† $2,001,616,000 2,621,086 $764      
*Massachusetts only reports paid enrollment.
†Federal Exchange actual obligations for FY 2010, FY 2011, FY 2012, and FY 2013 (as of 12/31/2013)

The average of the nine states reporting payment information is 74 percent. The cumulative payment rate across those nine states is just under 80 percent, which is in-line with national estimates from insurance companies.

Until better data is reported by the federal exchange, it is reasonable to reduce the official reported numbers by 20 percent to estimate paid enrollment -- and it is necessary to do so to track progress toward the original goal of seven million enrollees, which was a target for paid enrollment, not "pre-effectuated" or shopping cart enrollment.