Tuesday, February 09, 2016

How Much Does That Website Cost?

Open Enrollment 3.0 is complete. Now the brain trusts of Obamacare are touting the great success of healthcare.gov in managing the people who signed up without issues this year. Before they get too excited maybe we should step back and take a look at what we are paying for this "experience".

The Federally Facilitated Marketplace (FFM) charges a user fee of 3.5% of the premium. With an average premium of $4,152 in 2014 each enrolled person was paying $145.32. That's a cool $785 million based on the ASPE figures of 5.4 million people enrolled.

One would think that as the number of users increased an economy of scale would make this more affordable. Unfortunately this isn't the case. Since premiums increased (I know, can you believe it?) and HHS has kept the user fee at 3.5% we have seen a higher cost per person to operate the exchange.

With an average premium of $4,896 in 2016 the new cost per enrolled person is $171.36. With 9.6 million enrolled in the FFM it is now costing $1.65 billion to operate the exchange.

By the way, thanks taxpayers. You are paying 67% of these costs.

Tell me again why we haven't abandoned this tire fire yet.
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