Inside Baseball: Observations on Obamacare, Enrollments and the Exchange

National healthcare consultant and columnist Bob Laszewski makes some interesting observations in his most recent column at Health Care Policy and Marketplace Review.  After making the rounds with insurance carrier executives, actuaries and others involved with the Obamacare rollout, here are some of the things Laszewski reports:

On Enrollment Numbers. About half the enrollments in the exchange are made up of folks that already had insurance and about half were previously uninsured. Other conventional polls indicate that the ratio is closer to two-thirds previously insured and one-third previously without insurance.

On Demographics and Risk. The average age of those enrolling is still high (not enough from the 18 -34 demographic). Actuaries indicate that the overall numbers  may present an even bigger issue: Is enrollment via the exchanges large enough to get the right mix of healthy and sick people to balance the risk?

On Enrollment Attrition. About 15% – 20% of those counted as enrolled have not paid even first month premium. Something to watch over the course of the rest of the year is how many new enrollees will simply allow their policies to lapse. If that happens, with open enrollment closed until next year those numbers are not likely to be replaced.

On Consumer Satisfaction. Carriers report hearing a lot of dissatisfaction from consumers about their new health plans especially when compared to what they had before.

On 2015 Rate Increases. While there will be some variation within and across states, generally, rate increases for 2015 are expected to be just under 10% on exchange plans. A number of factors contribute to this projection: Lack of claims data to analyze.  Rate increases greater that 10% are subject to regulatory review. And, Obamacare reinsurance protects carriers from underwriting losses until 2016.

Our bottom line. Waaaayyyyy more questions than answers. The answers aren’t likely to come for quite some time (years). Carriers don’t think Obamacare will be repealed but rather will evolve and are going forward in that fashion. No one has a handle on Obamacare costs at this point and won’t until enrollments stabilize, more claims data is available for analysis and the $20 billion federal reinsurance backstop for insurance carriers expires in 2016 or when as Laszewski states “the training wheels come off.”

Hobby Lobby Politics – will the “brand” win or lose?

Have you been keeping up with the controversial Hobby Lobby case in the Supreme Court of Sebelius v. Hobby Lobby? The company has taken a very public position against certain provisions of The Affordable Care Act, specifically as it relates to covering contraception for women. They cover male contraception in the form of vasectomy, but take issue with providing contraception for women. David Green, founder of the very successful family-owned retail chain, wants the court to expand the Religious Freedom Restoration Act of 1993 so that businesses like his can opt out of certain provisions of Obamacare on religious grounds.

Whatever your political or religious views on contraception, consider what politics and religious views can have on your company’s brand. Mary Buffett, writer for The Huffington Post does an excellent job of laying out the facts and the potential toll this case may have on the successful brand name Hobby Lobby has made for itself over the past several years. Why Hobby Lobby Loses Even if it Wins at the Supreme Court.

Open Enrollment is Over. So Now What?

Media outlets have been buzzing since Tuesday about the passing deadline of open enrollment and what the next phase of implementing the new health care system will bring. There is a lot of “noise” about whether the 7.1 million number of new enrollees reported by the White House is an inflated number, mostly because many believe there is a large percentage of enrollees who have yet to pay for their insurance. Also, there is a great deal of speculation that insurance companies will raise their rates next year along with reports that indicate the implementation of the new health care system will weigh heavy on large employers, causing their expenses to rise [additionally] by nearly 6% [over and above what they would already spend] over the next ten years.

Kaiser Health News offers a round up of commentary from several sources in
Open Enrollment is Over — What’s Ahead for the Health Law Now?

Meanwhile, Marketwatch by Wall Street Journal reports ADP just released it’s 2014 ADP Annual Health Benefits Report. This is their second annual report, based on actual, aggregated health benefits data from U.S.-based companies with 1,000 or more employees. According to a press release by ADP, “…the report provides employers with benchmarks to better gauge the effectiveness of their current strategies and to help plan for changes on the horizon.”

The data was collected by a survey of employees (anonymous) from a group of employers spanning from 2010 to 2014. Key findings of the report include:

  • Premium increases are leveling off
  • Employers are contributing slightly less
  • Overall participation is steady, but varies with age
  • Costs vary by state

You can download a free copy of the ADP report here.

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