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.