Enroll­ment is drag­ging, but rates are still up, which may lead to more of a drag, as rate hikes should aver­age 8% vs. the 4% con­sumers were used to in the last two years. It doesn’t help that the churn rate on the exchange is 47%, and enroll­ment should be drop­ping over­all. Add to that the biggest chal­lenge – the exchange has to be ful­ly self sus­tain­ing in the fis­cal year
2016–17, as fed­er­al sub­si­dies are sched­uled to end. That’s not just a lit­tle num­ber – in its first fis­cal year the sub­sidy was 87% of total rev­enue ($324.5 mil­lion) and 47% in the sec­ond year ($157.2 mil­lion). That’s a big drop, not just a drop in the bucket.