Health insurance exchanges are looking more and more like stumbling blocks for payers, which are getting increasingly concerned about adverse selection from older, sicker patients.
In addition, the Obama administration's backtracking that will allow consumers to keep plans that don't meet ACA guidelines also appears to be drawing people away from marketplaces.
Insurance giant Humana issued a financial filing Thursday blaming the December state and federal regulatory changes for pulling younger, healthier individuals out of the risk pool. “The company now expects the risk mix of members enrolling through the health insurance exchanges to be more adverse than previously selected,” the filing said.
Yet Humana reaffirmed its 2014 financial projections, largely due to better-than-expected enrollment in Medicare Advantage and standalone prescription drug plans.
At the Oppenheimer Healthcare Conference last month, Regina Nethery, vice president of investor relations, said Humana has plans on the exchanges of 14 states where it already has a significant Medicare Advantage business.
But the technology glitches plaguing the federal and some state marketplaces could pressure the company's 2014 earnings if it sees greater adverse selection, she added. Individuals who already have chronic conditions were likely to have been the most persistent in signing up.
Lisa Carlson, director of planning and regulation for the health plan being offered by Sioux Fall, S.D.-based Sanford Health, is also concerned about older, sicker individuals creating an adverse risk pool. The average age of individuals who have enrolled in the plan through an exchange was 42—when it should be about seven years younger.
She pointed to glitches such as the inability to add a new baby to a plan or make any special election changes. “I just think about young consumers and their expectations for how they experience the internet and technology,” she said. “How sorely disappointed they were when they first signed up.”
Sanford executives also have been perplexed by uneven enrollment across its markets, despite seemingly similar demographics. In South Dakota, 490 people signed up for the plan, but in North Dakota, only 92 did.
Both states have defaulted to the federal exchange but only North Dakota opted to expand Medicaid. Still, Carlson could not pinpoint a reason for the difference.
Hospitals, meanwhile, are concerned that adverse selection through the health plans could affect negotiations for contracts for 2015 as insurers seek to price in more risk.
Follow Beth Kutscher on Twitter: @MHbkutscher
