After spending more than $1 billion on startup costs, California’s state-run Obamacare health insurance exchange has failed to produce the expected returns and is rapidly running out of money.
Covered California signed up fewer people than was required for it to become self-sufficient, Lanhee Chen of the Hoover Institution says.
“Even spending all of the money they did on advertising, they still managed to sign up far fewer Californians than they expected,” Chen said. “In fact, they’ve signed up about 1.27 million people, when they expected to enroll 1.8 million.
“Covered California receives $13.95 for each enrollee into the program, so falling half a million enrollees short will mean financial strain for the exchange,” Chen said.
Covered California’s 2015–16 budget proposal outlines possible consequences of such a shortfall.