BY GAIL WILENSKY, PHD ON JANUARY 29, 2014
With all of the ink that has been devoted to the Affordable Care Act (ACA), especially since the October 1 launching of the state and federally run insurance exchanges, remarkably little is being reported about what’s happening now that coverage for those newly enrolled in private insurance or Medicaid has begun.
As of the end of 2013, survey information indicated 2.2 million people had signed up for private insurance through the insurance exchanges. On January 24, the US Department of Health and Human Services (HHS) reported an additional 800 000 had signed up in January. But we know surprisingly little about these individuals and even less about how their attempts to use their ACA-related insurance are playing out.
What Information Has Emerged So Far?
Two important pieces of information have recently emerged about the 2.2 million individuals who signed up by the end of 2013.
First, slightly less than 25% of these enrollees are in the 18- to 35-year age range. The Obama Administration hopes that by the end of March, when the enrollment period ends, 38% to 40% of all enrollees will be in this age group. More than half of the people who signed up by the end of 2013 are aged 45 to 64 years, an age group that tends to be sicker and more expensive to cover than younger adults.
The administration has said that even with relatively fewer younger enrollees than had been hoped for, there are enough younger people already signed up to prevent an insurance premium “death spiral”—an increase in rates (causing fewer people to sign up for insurance) that can occur if sicker individuals enroll in disproportionate numbers. If the current distribution of enrollees persists, its effects on 2015 premiums will become clearer in a few months when next year’s premium bids are due.
It’s not surprising that older and sicker people, who are likely to realize they need (and want) health insurance, would make more effort to obtain coverage than younger people, who tend to be healthier and less frequent users of health care. This scenario is not unexpected. In Massachusetts, when the state rolled out its health insurance exchange in 2007, younger and healthier individuals were more likely to wait until the end of the enrollment period to sign up for coverage.
The second finding, which was not expected, is that the majority of people who have signed up for coverage appear to have already been covered. However, good information about the characteristics of the people receiving coverage through the exchanges is sparse.
According to a mid-January Wall Street Journal article, insurers, insurance brokers, and consultants have estimated that at least two-thirds of their customers were previously insured. The article cited reports by several health insurance agencies that reported only 20% to 35% of their enrollees had been previously uninsured. A survey by McKinsey & Company reported even more discouraging findings. Based on a sample of consumers eligible for the exchanges, McKinsey reported only 11% who bought new coverage under the law had been previously uninsured.
If such figures are even approximately correct, they would suggest that substantially reducing the number of uninsured individuals in the United States may be harder and take longer than had been assumed. As of 2013, the Congressional Budget Office had estimated that by 2016, the ACA would reduce the number of uninsured persons by at least 25 million.
In contrast to the challenge of enrolling people in private insurance through the exchanges, HHS reported that 6.3 million people are eligible either for Medicaid or the Children’s Health Insurance Program—a figure that reflects the number of people who have been “deemed eligible” for such coverage by the federal government rather than the number of people who have actually been enrolled. Some of these individuals had been eligible but not enrolled in these programs before the ACA, but it is unclear how many people are in this category. It is the states that do the actual Medicaid enrollment, and as with the private exchanges, the transfer of information from the federal government to the states has been plagued with problems.
What Is Unknown About the Newly Insured?
Very little is known or has been made public about the economic status or demographics of the people who have enrolled in plans through the health exchanges. Nor has the administration made available information about how many enrollees have actually paid their premiums. Without payment, individuals will not be entitled to use medical services.
Part of the problem is that both the federal government and many of the private insurers have been moving the due date for premium payment, initially set for mid-December. The administration subsequently pushed the date to late December and then pressed insurers to extend the date until January 10. A few insurers have reported they will accept premiums as late as the end of January.
Almost nothing is being reported on how many people have been trying to use their new coverage or what has been happening when people attempt to do so, whether it’s through Medicaid or insurance purchased through the exchange. There have been a few anecdotal reports of “newly insured” individuals having difficulty proving that they are actually covered or figuring out whether their physicians are affiliated with their insurance plans. Part of the difficulty appears to reflect problems arising when federal exchanges attempt to transfer information about the enrollees to the insurance companies. The surge in enrollments that occurred in late December has undoubtedly made the transfer of accurate information even more difficult.
I’m surprised by the lack of reporting on what is happening when people try to make use of their ACA-related insurance. I’m also surprised by the apparent lack of a surge in appointments or use of health care services by the newly insured. I would have expected that previously uninsured individuals would have a pent-up demand for at least some types of health care services, such as visits to doctors, various types of preventive tests and screenings, and prescription drugs.
But if that’s happening, we aren’t hearing about it.
About the author: Gail Wilensky, PhD, is an economist and Senior Fellow at Project HOPE, an international health foundation. She directed the Medicare and Medicaid programs, served as a senior adviser on health and welfare issues to President George H. W. Bush, and was the first chair of the Medicare Payment Advisory Commission. She is an elected member of the Institute of Medicine.
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