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 Carriers don’t think Obamacare will be repealed but rather will evolve and are going forward in that fashion.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.”



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