A Blue Cross Blue Shield Association report concluded that patients enrolled under the Affordable Care Act (ACA) were sicker and needed more care than people enrolled under traditional employer-sponsored plans. This report has increased concern about the possibility of big rate hikes in 2017, and about the possibility of insurers bailing on the ACA altogether.
The study looked at millions of ACA enrollees throughout the United States and reported that they have higher rates of expensive illnesses like diabetes, depression, high blood pressure, HIV, heart disease, and hepatitis C. ACA enrollees use more medical services than people enrolled in employer-sponsored plans too, with care costs 22% higher than for people insured through their employers.
Enrollment Statistics Encouraging Nonetheless
While these numbers may seem disheartening, it’s important to remember that when large numbers of previously uninsured people become insured, there is going to be some pent-up demand at first. Additionally, the Centers for Medicare and Medicaid Studies (CMS) has released statistics that indicate the ACA could be in better shape in 2016 and looking forward than headlines suggest.
For one thing, overall enrollment data between just December 13 and December 19, 2015, almost 4.1 million people selected a plan through HealthCare.gov. Seventy-eight percent of them were people renewing coverage ahead of the January deadline. This deluge of enrollees essentially doubled cumulative enrollment of the six weeks prior, bringing the total to 8.2 million by December 19, 2015.
What’s more, automatic renewals weren’t completely accounted for by these CMS statistics, so there could still be an increase in enrollment data based on automatic renewals in HealthCare.gov. Several states that have their own exchanges have later enrollment deadlines, potentially bumping the numbers even higher. The CMS numbers are for the 38 states that operate under HealthCare.gov and only through December 19.
Another important statistic is that larger numbers of younger adults (under age 35) enrolled under HealthCare.gov. In fact, young adult enrollment nearly doubled by the January coverage deadline for 2016 compared to the same period in 2015. Whereas in 2014, 670,000 young adults selected a plan under HealthCare.gov, this year there was a 50% jump, to 980,000 young adults. This is important because younger adults are usually healthier and less likely to visit doctors, making them less of a financial risk for insurers and potentially offsetting some of the costs of treating older, sicker patients.
Are People Abusing Special Enrollment Periods?
But Anthem, the biggest Blue Cross plan provider, says that it’s the so-called special enrollment periods that are causing many of the problems that are leading insurers to lose money under the ACA. Anthem would like the special enrollment periods to go away entirely so they can have more control over who signs up for coverage and when.
Since individuals can enroll in coverage regardless of pre-existing conditions, the opportunity is created for “adverse selection.” What that means is that people may wait until they’re actually sick or hurt before they purchase health insurance, and this causes problems in how insurance markets function. The ACA needs people, for the most part, to enroll when they are healthy.
The annual open enrollment periods are necessary for market stability, and when people can enroll anyway if they miss that window of opportunity, it upsets that market stability. Many special circumstances allow people to enroll outside the open enrollment period. For example, a newborn infant or someone who has lost their job (and health coverage) can enroll outside the enrollment period, and forcing these people to wait until the next open enrollment period could result in serious financial problems for affected families.
The problem is, the ACA offers a number of special enrollment periods, based on loss of coverage, childbirth, marriage, moving, or gaining US citizenship. These make sense, but some of these categories have sub-categories that are quite open-ended, such as one defined as “other exceptional circumstances.” Insurers claim that special enrollment periods are being abused, with people waiting until they have a health problem to enroll under a special enrollment period, and then dropping coverage once they’re better.
The CMS, however has promised to clarify and limit special enrollment periods, particularly those that could be open to abuse. One of the biggest complaints insurers have is that special enrollment period enrollees aren’t required to prove that they’re eligible for special enrollment. They simply have to check a box stating they are eligible. Though these forms are randomly audited, getting away with claiming eligibility for a special enrollment period has been fairly easy thus far.
Will UnitedHealth Bail on the ACA Next Year?
Anthem / Blue Cross is not the only big insurer unhappy with the expense of ACA enrollees. UnitedHealth, the nation’s biggest insurer, has lost about half a billion dollars during each of the years it has participated in the ACA exchanges.
Last November, UnitedHealth said it may exit the exchanges completely in 2017 due to higher than expected claims – particularly among the large numbers of people who signed up outside the open enrollment periods. UnitedHealth is the largest insurer to indicate that it may leave the program, but the company still had a profitable year due to the company’s other operations. In fact, its $5.8 billion in profits for 2015 were up from $5.6 billion the previous year.
How Has the ACA Affected Care Access and Quality?
Has the ACA affected access to care and care quality? Just over 16 million people are eligible to enroll in a healthcare marketplace plan. Of these, just over 12 million are eligible to enroll with financial assistance. Another 5.2 million are eligible for Medicaid or CHIP (the children’s version of Medicaid). So far, nearly 12.7 million people have enrolled in a plan under the ACA.
A national survey of ACA enrollees by NPR, the Robert Wood Johnson Foundation, and the Harvard Chan School reported that 72% of respondents said they get good value for what they pay toward healthcare costs. Yet a substantial number of people still have difficulty paying medical bills and accessing care.
The survey found that around 15% of people experienced at least one incident in the prior two years when they needed healthcare, but did not receive it. More than one-third reported not being able to find a doctor who accepted their health plan. Furthermore, emergency room use remains high, with one-third of adults saying they received care in an ER in the previous two years.
Are Employers Leaving Workers to Fend for Themselves Under the ACA?
When the ACA started, speculation was rife that employers would simply stop offering their employees coverage, forcing everyone onto the healthcare exchanges. That didn’t happen, however. Most companies – especially large companies – that offered coverage before the ACA have continued providing it.
The main reason is that health coverage is an important recruiting tool, and as the labor market has tightened a bit with economic recovery, companies feel they must offer health benefits to recruit the best employees. Plus, companies get significant federal tax breaks when they provide insurance. In other words, the employer-based system is doing fine in the post-ACA world, with around 155 million Americans having employer-based insurance coverage this year.
Despite high ACA enrollment and strong employer-sponsored health plans, there are still plenty of uninsured people in America, though the number of uninsured people dropped slightly from 2010 to 2013. Data from 2014 and early 2015 indicate substantial gains in both public and private insurance coverage and bigger decreases in rates of uninsured people.
However, in 2014, nearly half of uninsured adults said the main reason they were uninsured was because they couldn’t afford insurance, even under the ACA. Poor adults in states that did not expand Medicaid, and who remain ineligible for Medicaid coverage have been particularly affected. Low-income working families make up the majority of the uninsured, with 80% of uninsured people in a family with at least one worker. More than half had family income of less than 200% of the federal poverty level.
The future of the ACA is somewhat foggy. While enrollment numbers are up, and more young people have signed up, Blue Cross and UnitedHealth have been unhappy with their participation in the ACA, with UnitedHealth possibly exiting the ACA exchanges altogether in 2017. Throw in a presidential election and Congressional elections, and the coming years could bring substantial changes.
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