My take: What does the expanded enrollment mean?

Last Thursday, HHS released the final enrollment stats for health exchange enrollment for 2014:  here’s what we learned:

  • 8.1 million enrolled in a plan in the Health Insurance Marketplace—3.8 million (47% of total) since the end of February including 1.2 million in the much-watched 18-34 age cohort.
  • 54% are female; 28% are between the ages of 18-34; 63% are white, 17% black, 11% Hispanic, 8% Asian/other
  • 20% chose a bronze plan, 65% silver, 9% gold, 5% platinum and 2% catastrophic. Note: at the silver level, individuals who earn less than 250% of the federal poverty level — ($29,175 for an individual, or $59,625 for a family of four) — are eligible for assistance for out-of-pocket costs. 85% who picked an exchange plan qualified for a subsidy: 82% in the 14 state-run exchanges and 86% in the federally-run exchange.
  • Young adults 18-34 were 83% of those applying for the catastrophic coverage.
  • Enrollees might be sicker:  they are 47% more likely to use specialty medications,  27% more likely to use seizure medications, and 4X more likely to use HIV meds (ExpressScripts)
  • State success in enrollment varied widely: “states that were so enthusiastic about the law that they decided to run their own exchanges almost all fell short of targets the Obama administration had set” Louise Radnofsky, Anna Wilde Matthews “Sign Ups for New Health Exchanges Skew Older” Wall Street Journal May 2, 2014
  •  4.4M of the 8.1M were in 7 states: California (1.4M), Florida (983K), Texas (734K), New York (370K), North Carolina (358K), Pennsylvania (318K) and Georgia (317K). Of these, California and New York ran their own exchanges; the rest used Healthcare.gov

 

The report concluded “Over the course of the initial open enrollment period, consumer interest in the Marketplace was high, as measured by 98 million website visits and 33 million calls to the call centers”. And HHS calculates that in addition to the 8.1M enrolled through exchanges, 12.7M others are newly insured as a direct result of the ACA: 4.8M  through expansion of Medicaid and CHIP, 5M who purchased coverage outside exchanges (eHealthInsurance), and 3M newly covered via the ACA provision that adults under 26 are eligible for their parents plan.
 
Here’s what it means:
 
1-The enrollment push was successful. For at least a sizeable portion in the population, the fear of not having insurance outweighed the hassles with websites and enrollment, even in states where opposition to the ACA was strongest like Texas, Florida, North Carolina and Georgia.

2-Many states that ran their own exchanges underperformed. Most of these will opt for Healthcare.gov in the next cycle this November.

3-These newly enrolled may cost more than we think. The data from Express Scripts combined with the slightly older enrollment demographic suggest the costs for their care might be higher than projected originally.

4-The impact of the newly insured on health insurance premiums is unknown, but they’re likely to be higher than earlier estimates made by the companies.

5-The impact on hospitals and doctors is more predictable: many of the newly insured want/need services now,  most do not have existing relationships with doctors or hospitals, and many will be unable to pay their co-pays and deductibles.

6-The campaign 2014 political debate will now shift from “if we build it, will they come” to “they came, so what do we do about their care and the cost."The attention paid to the ACA on both sides will shift from how it expands coverage to how much it costs and saves.
 
The debate about reforming the health system is far from over. The impact of delivery system reforms-- medical homes, accountable care, bundled payments, avoidable readmissions, limits on physician self referrals, value-based purchasing, workforce retraining, meaningful use et al—have been sidelined by the drama playing out about enrollment. And the public’s mood about the ACA remains problematic: opinions for and against are strongly held and unlikely to change.
 
Increasing access and reducing costs were the two aims of the ACA. The results of the enrollment push combined with other coverage expansion efforts suggests the first is being addressed. Only time will tell about the second.
 
Paul

P.S. For a full  recap of industry and policy issues last week, go to www.navigant.com/pulseweekly. 

Source: ASPE Issue Brief: HEALTH INSURANCE MARKETPLACE: SUMMARY ENROLLMENT REPORT FOR THE INITIAL ANNUAL OPEN ENROLLMENT PERIOD For the period: October 1, 2013 – March 31, 2014(Including Additional Special Enrollment Period Activity Reported through 4-19-14)  May 1, 2014