ACA Open Enrollment #1 in the Books
April 03, 2014
With the first annual Affordable Care Act open enrollment in the books (although the end of open enrollment is still something of a moving target – more on that later), everyone is examining, discussing, applauding and challenging the numbers. And there are a lot of numbers to consider: How many people signed up for health insurance coverage during open enrollment? How many of them went into Medicaid? How many of them are young, healthy people vs. older, less healthy people? How many of them either have paid, or will pay, the premium needed to actually obtain the coverage? How many of those who signed up were previously uninsured? And the list goes on and on.
Issues and opinions abound about what the numbers really mean, but the announcement from the White House on April 1 is that at least 7.1 million people have signed up for health insurance through the exchanges, meeting the goal set months ago by the administration. As we all recall, the open enrollment road started out particularly bumpy on October 1, 2013, with the HealthCare.gov website unable to fulfill its promise of a smoothly operating insurance marketplace. The technical problems caused a significant delay and required many repairs and changes to the website. It was not until December 2013 that substantial numbers of users could shop for and buy insurance on the federal website without lengthy wait times and other problems. And even after the consumer experience began to improve, insurers expressed concern that the information they were receiving about enrollees was inaccurate or duplicative as a result of the federal system’s administrative deficiencies. The fact that the enrollment goal might have been reached is, therefore, noteworthy.
But what do the numbers mean? First, most agree that it will take some time before we really know how effective the many provisions of the ACA have been when it comes to insuring the previously uninsured and what the cost to the country is for that coverage. The numbers show many people who have gained coverage for health care services in the past few months are in state Medicaid programs. Twenty-eight jurisdictions have or are planning to expand their Medicaid programs in some fashion under the ACA. In addition, the efforts to reach out to that “expansion population” have resulted, to a degree, in more people coming into the traditional Medicaid program (the so-called “woodwork effect”). In West Virginia, well over 90,000 people have been enrolled in the expanded Medicaid program. The long-term implications of adding more people to the Medicaid rolls is a concern at the state level when it comes to budgets and trust in the federal government to meet its significant matching obligations to fund those programs under the ACA. In addition, while the law is called the “Affordable” Care Act, many would point out that the care itself is no more affordable than it ever was; the difference is that we now subsidize premiums for lower-income people with taxes and penalties collected under the new law. Data analysis through mid-March for West Virginia shows that 86 percent of people who enrolled through the exchange did so with the help of subsidies. While there are initiatives imbedded in the ACA to reduce the cost of medical services over time, the results are not immediately ascertainable.
There is much debate right now about how many of the 7.1 million people were previously uninsured, or whether they were just moved from one form of coverage to another. In West Virginia, Highmark (the only carrier offering products on the exchange in the state) announced that a total of 20,131 people have purchased ACA-compliant plans, with 14,839 through the exchange and 5,292 buying directly from Highmark. The company also said 63 percent of the total number were new members, meaning they were either previously uninsured or were insured with a different carrier. There is also a great deal of debate about how many of the 7.1 million have paid premiums, and whether this calls into question the accuracy of that number. After all, if premiums are not paid the coverage will not be issued. Highmark’s announcement acknowledges that not every enrollee has paid the first month’s premium. To be fair, those who signed up towards the end of open enrollment will not have a payment due yet so it is difficult to say how dramatically premium payment will ultimately affect the numbers.
As mentioned above, the open enrollment “deadline” is a loose term. The Obama administration has stated that consumers who tried to enroll before March 31 without completing the process will have additional time to do so. Some of the state-based exchanges have extended their open enrollment deadlines as well. These extensions could change the final open enrollment number and delay for weeks or months the most meaningful analysis of the demographics. However, setting politics aside, it does appear that more people are obtaining coverage for health care services under the law, which is a good thing.
As we continue forward with implementation, it is also critical to understand how administratively challenging it has been for the insurance industry to put the ACA changes into effect, often with little guidance from the administration. Affordability remains hugely important, and insurers stress that we cannot lose our focus on this point. Insurers cannot design products that meet consumer needs and remain affordable if state legislatures create an increasingly restrictive statutory environment. High value provider networks will reduce cost and improve quality of care. Innovative benefit design that provides consumer choice will help keep coverage affordable. Legislation imposing restrictions on provider contracting and limiting product design will not lead to affordable products that meet the needs of today’s consumers. While we await further analysis of the successes and failures of the ACA, we should keep in mind that, at the end of the day, the goal is more high-quality, affordable coverage.