Colorado Exchange: 25K for Medicaid, 200 for Private Insurance

Colorado is one of 14 states operating its own ObamaCare exchange for health insurance. As a result, it has had more success enrolling people than the disastrous federal exchange. Still, Colorado’s relative “success” reveals a deeper problem with the new health care entitlement. So far, just 226 people have enrolled for private health insurance. At the same time, 25,000 Coloradans will be newly eligible for Medicaid benefits in January. 

Since the opening of the exchange in Colorado, 16,000 residents have used the system to enroll in the newly expanded Medicaid program. Another 9,000 adults without children were on waiting lists for the program. These individuals will also gain new Medicaid coverage next year. 

Medicaid, a shared federal-state health care entitlement, reimburses health care providers the least amount. Providers typically receive around 18 cents on each dollar billed. Medicare, the federal health program for seniors, pays 23 cents. Private insurers reimburse providers around 38 cents for each dollar billed. 

Pushing more Americans into the system through Medicaid not only increases the demand for health care services, but reduces at the margin the funds available to maintain that system. Either those with private insurance will have to bear a larger burden funding the system or the system will contract so that health care services are difficult to receive. 

Even if a magical pot of money were found to fund these services, it isn’t clear that having Medicaid coverage actually helps anyone. As my former colleague Nick Gillespie recently pointed out, a respected study out of Oregon found no difference in health outcomes from those on Medicaid and those uninsured. 

The problems with ObamaCare and future funding are not just confined to Medicaid, which is the dominant vehicle to provide new health coverage. Some percentage of the 226 Coloradans who have enrolled for private coverage will get federal subsidies to help purchase their insurance. The US Treasury, for the first time, will send premium payments to insurance companies to cover these subsidies. Medicaid and Medicare are already the fastest growing segments of the federal budget. These two programs, as well as the new health insurance subsidies, will likely soon consume all federal revenue. 

Math will prove to be the biggest obstacle to ObamaCare.