Reform Update: Questions linger for insurers, even as HealthCare.gov hums for consumers

Insurers have a seen a flood of enrollments in the days since the Obama administration announced that HealthCare.gov is largely functional.

Sign-ups topped 50,000 in just the first three days of December, according to an unnamed administration official cited by the Washington Post—about twice as many as in the entire first problem-plagued month of operations.

That's seemingly good news for insurers participating in the online marketplaces. But there's still significant concern over the federal exchange's back-end operations that are key to completing the enrollment transactions. And there's still very little known about the age and health profile of the consumers who are buying the plans.

Since the opening of the federal marketplace, there have been widespread reports of inaccuracies in the 834 reports that provide insurers with detailed information about new enrollees.

By all accounts, those problems continue to gum up the system. On Wednesday, the CMS, American's Health Insurance Plans and the Blue Cross and Blue Shield Association took the unusual step of releasing a joint statement addressing the issue.

“We are working together closely to resolve back-end issues between health plans and HealthCare.gov,” it said. “This is a very focused effort that is being driven by a team of experts from CMS, key outside contractors working closely with health plan representatives and overseen by CMS's general contractor, Optum/QSSI.”

But administration officials have repeatedly refused to provide any kind of metric for how pervasive the remaining problems are or how many erroneous forms have already been sent out to insurers. The continuing problems raise the specter that individuals who believe they have signed up for coverage could show up at the doctor's office after Jan. 1 and find out otherwise.

“There is a risk of chaos once people start to use services,” said Paul Ginsburg, president of the Center for Studying Health System Change. “What nobody knows is how quickly it can be fixed.”

With large numbers of people finally able to enroll, concerns will also turn to who is actually signing up for coverage and whether the risk pool is sufficiently balanced between sick and healthy individuals to provide a viable market for insurers.

The federal government hasn't released any demographic information for individuals that have signed up for coverage through HealthCare.gov. But some states have released initial data on who's actually purchasing coverage—and it shows that exchange enrollees are significantly older than the general populace.

In California, roughly a third of enrollees in October were 55 or older, even though that age group represents just 11% of the population. Likewise, in Minnesota, half of enrollees in October and November were over the age of 50. Just 23% were between ages 21 and 40.

The risk profile of the enrollees, Ginsburg said, could be a much a bigger problem for insurers than the data glitches. “Will the risk profile be somewhat in the range of what the insurers were projecting and what they set their rates on? Or will it be very different?”

UnitedHealth Group President and CEO Stephen Hemsley blames the ACA for significantly reducing revenue growth for the country's largest insurance firm. At an investment conference Tuesday, Hemsley said the company expects earnings per share to be between $5.40 and $5.60 for 2014. But that figure would be closer to $7 if not for taxes and cuts included in the federal healthcare law, by Hemsley's reckoning. In particular, he bemoaned cuts to the Medicare Advantage program that aim to bring enrollee costs in line with traditional Medicare. “Medicare Advantage has a couple difficult years ahead,” he told investors.

Dozens of misleading websites have surfaced across the country since the Oct. 1 opening of the state and federal online marketplaces. An analysis by the online security firm Cyveillance at the end of October found more than 2,500 domain names that included the terms “Obamacare” or “AffordableCareAct” in them. Most of these copycat sites are seemingly seeking to financially exploit confusion over the rollout of the federal healthcare law. But one such website—Coveringhealthcareca.com—was actually established by GOP state legislators in California. The domain name is similar to that of the state's insurance exchange, Covered California. Democrats have lambasted the site as an effort to mislead consumers, but Republicans say the website is a valuable source of information for consumers.

Follow Paul Demko on Twitter: @MHpdemko