It’s open enrollment season—the annual period in which tens of millions of consumers wallow in the misery of health insurance choices and costs.So, let’s pause to reflect on the status of things—enrollment-wise—with employer coverage, Medicare, and the exchanges.
In particular, do consumers have better tools these days to help them choose insurance plans?
For people with employer-based coverage—about 150 million Americans—things are okay and stable, but not great. The latest report from the Kaiser Family Foundation, released last month and based on a detailed survey of 1,900 employers (small, mid-size and large), indicates that premiums rose on average a modest 3% in 2016—to just over $18,000 for family coverage.Workers paid 29% of that.
A similarly small increase in premiums has prevailed for several years and is expected again for 2017.
Almost all firms with 50 or more employees offer health benefits and the vast majority claim their coverage meets the ACA’s requirements for value and affordability.Overall, 56% of employers offer health benefits because hundreds of thousands of small firms either choose not to offer it or can’t afford it—especially the smallest Mom and Pop shops.
The Obama administration blew the doors off Obamacare’s enrollment expectations this week and scored big political points.
But in doing so, they may have set Obamacare’s expectations going forward at a level that can only undermine their credibility and that of the new health law.
What happens when the real number––the number of people who actually completed their enrollment––comes in far below the seven million?
What happens when the hard data shows that most of these seven million were people who had coverage before?
What happens when it becomes clear that the Obamacare insurance exchanges are making hardly a dent in the number of those uninsured?
Yesterday, the Los Angeles Times reported that the non-profit Rand Corporation estimated that two-thirds of the first six million people to enroll in Obamacare were previously insured––only two million were previously uninsured.
If all of the one million people who signed up in the last week were previously uninsured, that would mean that only three million previously uninsured people have purchased coverage in the government-run exchanges.
Rand also estimated that about nine million people have enrolled directly with the insurance companies, bypassing the government-run exchanges. But Rand also reported that the vast majority of those were previously insured.
If 20% do not pay, as has been the case since Obamacare launched, then the real Obamacare exchange enrollment number is about 5.7 million.
This morning, the tally of enrollees in health exchanges is between 6 and 7 million.
Many of these will not finalize their paperwork until April 15, and many more might not pay their premiums.
Nonetheless, given the underwhelming rollout of Healthcare.gov, and well-funded campaigns in some states to discourage enrollment, the number is impressive. But the rest of the story is more important.
In coming weeks, these questions will be answered:
How many of these new enrollees will actually pay their premiums next month and be insured?
Are the new enrollees healthy or sick and in need of medical attention? How will the delivery system respond to these needs?
Did the penalty induce enrollment, or were other factors more important to individuals? Was it the attractiveness of subsidies or something else?
How will employers that provide health coverage assess the viability of health exchanges in their benefits strategies? Can these exchanges serve as a viable marketplace for employee insurance purchases (and allow employers to shift purchasing responsibility to their employees)?
With the ACA exchange enrollment deadline almost behind us, this is a good time to take a look at the big picture.
Three years after the first baby steps of implementation, what has the ACA accomplished?
When we consider the ACA, we can think of two broad goals. The “easy” goal was expanding coverage to the uninsured. We say “easy” because regulators should be able to succeed by simply throwing money at the problem, and that is a task our elected officials seem particularly adept at accomplishing.
The “hard” goal was bringing down the rate of growth in health care spending.
This has proven to be a difficult task for policy makers, who have been trying (and failing) for decades and have often done more harm than good.
We first consider the goal of expanding coverage to the uninsured. From its onset, the ACA chalked up a small victory by requiring plans to continue coverage for dependents under age 26.
This provided coverage to as many as three million uninsured, albeit the healthiest members of the population. The lion’s share of the reduction in the numbers of uninsured was supposed to come from Medicaid expansions and private exchanges.
And here is where the problems emerge.
Medicaid ranks have swelled in the 27 states (including DC) that have chosen to expand the program. Republican leadership in other states continue to assert they will not expand Medicaid, but given the exceptionally generous federal funding for this expansion, we find it hard to believe that most of these states won’t soon join the expansion.
You’ll be hearing a lot about the number six point five million over the next few days.
Six point five million — or whatever the exact number turns out to be at the end of the day — being the number of people that the administration say signed up for Obamacare through the exchanges when open enrollment ends March 31st.
How meaningful the official numbers are will be open to debate. The bloviation factor will be in full effect. The critics will be downplaying the administration’s number, ACA supporters defending it. Data geeks-turned-media stars will explain what it all means.
Here’s a guide to some of the other numbers we should be talking about as we try to make sense of what’s really going on and what really happened during the Obamacare rollout.
FUDs: The number of people who are innocently living their lives thinking they have bought health insurance, but who, for one reason or another, be it technical glitch, bureaucratic incompetence or technicality – are going to wake up one morning not long from now and discover that they do not have health insurance.
And who one day soon will discover that they do not have health insurance. This is the group that causes people in Washington to lie awake at night; because they are going to complain – and complain loudly. While the talk from the administration to this point has been all tough, it seems logical to assume it will build an appeal mechanism that will allow FUDs back into the system. The early signs are that this is the case.
404s : The number of people / applications lost in the system, either as a result of the Healthcare.gov fiasco or because their application is sitting forgotten on somebody’s desk somewhere or on a laptop. Anybody who tried to log into Healthcare.gov at the height of the meltdown or who has gone back and forth with their insurance company over a bill gets it.
It is safe to assume that this is another number that keeps planners up at night. Let’s just say it is safe to assume that there are a lot of 404s.
CANCELS: The number of people who had their insurance plans cancelled by insurers on the grounds that they did not meet the standards set by the Affordable Care Act. In a way, being a cancel can be considered a badge of honor in the gamification of the healthcare system that is Obamacare.
UNCANCELS: The number of people who had their plans cancelled by the health insurers only to have them declared “uncancelled” by the Obama administration or their state. Nobody really knows how many uncancels there are. Don’t ask. Yes, it will take a really long time to sort out the uncancels from the cancels and the QHPs.
And you will probably want to shoot the person explaining it to you. In the gamification of the healthcare system, level ups go to people who have been cancelled, uncancelled and bumped.
BUMPS: The number of people who have been “bumped” out of network and are being forced to change doctors. What’s going on? In gamification terms, bumps make things more exciting. In real life, they suck. Getting bumped off a flight is annoying, getting bumped in the health care system is potentially life-threatening.
LIVES SAVED: As we speak Nate Silver or a smart person who looks and sounds a lot like Nate Silver is sitting at a computer in a darkened room somewhere trying to come up with a reliable quantification of the number of lives the Affordable Care Act has saved and will save by shielding people from the barbaric US healthcare system.
How would you go about coming up with that number? Would you look at people turned away from emergency rooms? Would you look at the number of preventable deaths under the old system? Would you total the number of deaths from cancer, heart attack and stroke? Compare mortality rates over the decade from 2004-2014 with those from 2014-2024? It will be long time before we have the data we need to really understand how well we’ve done.
You can forget the nonsense we’ve been hearing about Obamacare costing the lives of thousands of Americans by taking their health coverage away from them. There is a difference between losing your coverage temporarily because the system is in transition and losing it and knowing that you’ll never be able to get it back. Ever.
Calculated over decades to come the number of lives saved is likely to total in the thousands, if not the millions. And that will be the true test of the Affordable Care Act as a historical accomplishment for Barak Obama and his administration.
Since mid-December, we’ve brought you the latest data on public opinion of the Affordable Care Act (ACA) from the RAND Health Reform Opinion Study (RHROS), a new way to measure public opinion of health reform. The RHROS allows us to observe true changes in opinion by surveying the same people over time.
The trend of overall stability masking churn in individual opinion that we discussed last week has continued with our latest data. This week, however, we delve deeper to look at differences in opinion between two groups: those who had insurance in 2013 and those who did not.
Understanding how the ACA impacts these groups differently is particularly important. While the ACA is currently changing the landscape of health insurance, its impact should be especially pronounced for Americans who lacked access to insurance through their employer or government programs in 2013.
The following graph illustrates the opinions over time of all individuals who had insurance, regardless of the source.
This includes those who had coverage through their employer, purchased it on the private market, or received it through a variety of government programs, such as Medicare and Medicaid.
This group represents about 85 percent of the overall sample.
This graph shows opinion of the ACA among those who were uninsured in 2013:
At first glance, what’s striking about these two graphs is how similar they are—more on that in a moment—but there are actually some very important differences.
Rumors have been circulating in the marketplace all week that the administration was thinking of extending the individual health insurance policies that Obamacare was supposed to have cancelled for as much as three more years.
That the administration might extend these polices shouldn’t come as a shock. My sense has always been that at least 80% of the pre-Obamacare policies would ultimately have to be canceled because of the administration’s stringent grandfathering rules that forced almost all of the old individual market into the new Obamacare risk pool.
But with the literal drop dead date for these old policies hitting by December 31, 2014, that would have meant those final cancellation letters would have had to go out about election day 2014. That would have meant that the administration was going to have to live through the cancelled policy nightmare all over again––but this time on election day.
The health insurance plans hate the idea of another three-year reprieve. They have been counting on the relatively healthy block of prior business pouring into the new Obamacare exchanges to help stabilize the rates as lots of previously uninsured and sicker people come flooding in.
With enrollment of the previously uninsured running so badly thus far, getting this relatively healthier block in the new risk pool is all the more important. The administration’s now doing this wouldn’t just be changing the rules; it would be changing the whole game.
Republicans, and a few vulnerable Democrats, had essentially called for this last fall when legislation was floated in both the House and Senate with the “If You Like Your Policy You Can Keep It,” proposals. At the time, the administration and Democratic leaders rightly said if this sort of thing would have been made permanent it would have a very negative impact on what people in the new pool would pay––and on their already high deductibles and narrow networks.
At the beginning of this post I asked, Is Obamacare unraveling?
First, as I have said before on this blog, the law’s reinsurance provisions will mean Obamacare can keep limping along for at least three years. And, even making this change won’t alter my opinion on this. It will just cost the government more reinsurance money to keep the carriers whole.
By asking if it is unraveling, what I really wonder about is the whole sense of fairness in the law and the expectation that everybody needs to get the Democrat’s definition of “minimum benefits” whether they want them or not.
More bad news on Healthcare.gov. This from Sunday’s WaPo:
“Tens of thousands of people who discovered that HealthCare.gov made mistakes as they were signing up for a health plan are confronting a new roadblock: The government cannot yet fix the errors. Roughly 22,000 Americans have filed appeals with the government to try to get mistakes corrected, according to internal government data obtained by The Washington Post. They contend that the computer system for the new federal online marketplace charged them too much for health insurance, steered them into the wrong.” insurance program or denied them coverage entirely …”
Not good. The newspaper reports that consumers who call the 1-800 help line “are (being) told that HealthCare.gov’s computer system is not yet allowing federal workers to go into enrollment records and change them, according to individuals inside and outside the government who are familiar with the situation.”
When envisioning what public insurance exchanges of the future can and should look like when it comes to technology and structure, one only needs to look at the successful private exchanges that have paved the way over the past several years.
This experience has taught those who administer private exchanges that open enrollment—the phase that the federal government’s Health Insurance Marketplace is struggling through currently—is only the beginning. Public exchanges could benefit from lessons already mastered by private exchanges—starting with open enrollment but extending to even more complex technology-based transactions.
There are 10 scenarios that vendors must be able to handle.
1. Life Events. In today’s individual Health Insurance marketplace, consumers can generally add or drop coverage for themselves or their dependents anytime they want. In other words, it’s a relatively “rule-free world.” In January 2014, that world changes to look more like the current group health marketplace in which many rules are defined by the federal government’s existing tax code (e.g., Section 125) and HIPAA requirements, and consumers must select and “lock in” their coverage once a year for the following 12 months, unless they experience a qualified life event.
As a result, each qualified life event – e.g., marriage, divorce, birth of a child, loss of spouse’s coverage and many more – must be configurable within the Exchange technology to enforce the appropriate rules. For example, if a person gets married, is that person allowed to drop coverage or change plans and carriers? How about with the birth of a child? Or with a loss of spouse’s coverage? For a truly scalable Exchange technology, thousands of scenarios must be configured in advance to enable consumers to make enrollment choices online without administrator involvement.
A THCB reader writes in with a question and a pretty disruptive suggestion. @NorCal Exchange writes:
“I’m a small business owner. I’m also a card-carrying Democrat. Frankly, I’m pretty pissed off about the way things have gone with this roll-out so far. This was our one chance to get health reform right. And from what I can tell, we’ve totally screwed it up. Here’s one more thing a lot of the media coverage is missing. Even though THCB readers understand how open enrollment works, I’m guessing a lot of ordinary Americans don’t realize that under the new rules once they’ve applied for coverage they’re basically stuck with what they’ve got until the next enrollment period. This was a pretty big change in the first place. With all of this insanity, I’m guessing people are probably not reading the fine print and don’t know they’re locked in.
My prediction: there are going to be a lot of really unhappy people in the early part of 2014, when people realize what they’ve gotten themselves into. Why not allow people to change their plans? If you want an Amazon.com for healthcare, make the market for health insurance the same way as the market for anything else. If people decide to upgrade their coverage let them. If they get pissed at UnitedHealth’s customer service, let them cancel their policy and switch to AETNA or CIGNA. If I’m an idiot and don’t want preventative coverage let me build my own plan. If I’m worried that my daughter might get cancer let me add the Mayo clinic to my network. If my kid plays sports, let me add better ortho coverage. Yeah. Yeah. I know. This will turn the traditional underwriting model upside down. And a couple of health plans may even go out of business. But so what? My business may end up going out of business. These guys are smart. They’ll figure out twenty new ways to make money and they’ll end up thanking us for disrupting their precious monopoly …”