Good was joined by Andy Slavitt, group executive vice president for Optum, the parent company of QSSI, the lead contractor for fixing HealthCare.gov. Slavitt indicated that the top priority is making sure that insurers have accurate and complete information about individuals who have enrolled in their plans. Problems with the 834 data forms that insurers rely on to enroll customers have become a paramount concern now that significant numbers of individuals are able to sign up for coverage. It has raised fears that when individuals seek to access medical care after Jan. 1, there will be no record of their insurance coverage.
“Now is the time to make sure everyone who thinks they're enrolled in a plan is indeed enrolled,” Slavitt said.
Conference attendees also received the most recent statistical breakdown of exchange participation from McKinsey & Co. Paul Mango, the research firm's director of healthcare systems and services, cautioned, however, that the available data were still miniscule, consisting of data on just 370,000 enrollees. That's barely 5% of the 7 million individuals projected by the Congressional Budget Office to enroll in coverage by March 31.
“How statistically significant this is, it's hard to say, because it's very early,” Mango said.
There are 282 insurers selling plans on the state and federal exchanges. That's down from 307 insurers in the individual insurance marketplace in 2012, a drop of 8%, according to the McKinsey analysis. Of those insurers, 80 are new to the individual marketplace. Roughly three quarters of those new entrants are either plans that previously only had Medicaid enrollees or startup nonprofit, consumer-governed plans established by the Patient Protection and Affordable Care Act.
McKinsey found little difference in pricing between legacy carriers and new entrants. In each instance, about one-third of their products were priced within 10% of the lowest cost products available. But Mango indicated that there is a “spectacular spread” in pricing for plans sold on the exchanges. That suggests insurers are dealing with a lot of unknown variables about who will ultimately obtain coverage through the exchanges.
Narrower networks is a clear trend for products sold on the online marketplaces. McKinsey found that 70% of plans available through the exchanges were either “narrow” or “ultra-narrow.” They defined that, according to Mango, as providing access to 14 or fewer of the 20 largest hospitals in a market.
Michael Leavitt, a former HHS Secretary under President George W. Bush who heads Leavitt Partners, a firm that consults on insurance exchange development, said trimming provider networks is necessary to reduce costs. Otherwise, he argued, “sticker shock” could cause the fledgling markets to fail because not enough customers will enroll. “The capacity to have narrower networks is fundamental to the success of reform,” said Leavitt, a former governor of Utah.
McKinsey also did some preliminary analysis of average premiums for newly enrolled exchange subscribers compared with assumptions about those premiums. Data were available only for the state-run exchanges in Maryland, California and Washington. The takeaway? Premiums were substantially higher than anticipated. Under the healthcare reform law, older subscribers can be charged up to three times as much as younger subscribers. “That leads us to believe early enrollees are skewed toward the aged,” Mango said.
