Roughly 12.7 million Americans signed up for a health plan on the federal and state insurance exchanges by the end of the Affordable Care Act's third open enrollment, HHS said Thursday.
The preliminary enrollment numbers fall within the government's expectations of 11 million to 14.1 million. HHS officials continued to strike a positive tone Thursday, saying the ACA has paved the way for many people to get comprehensive medical coverage, but the government still faces criticism from large health insurers that are losing money on the nascent marketplaces.
“It's clear that marketplace coverage is a product that people want and need,” HHS Secretary Sylvia Mathews Burwell said on a conference call.
The 12.7 million figure likely will come down a bit throughout the year, depending on how many people pay their monthly premiums or switch to other forms of health coverage, but the CMS already incorporated some plan cancellations into its calculation.
As of Sept. 30, the marketplaces had 9.3 million paying customers. HHS predicts there will be 10 million total paying exchange members by the end of 2016. The Congressional Budget Office recently lowered its estimate of 2016 exchange enrollment to 13 million from 21 million.
During the past several months, insurance executives and state officials have publicly griped about the state of the exchanges. UnitedHealth Group opened the charge in November when it said it may exit the ACA's marketplaces due to heavy losses. UnitedHealth, which expects to lose approximately $1 billion on its 2015 and 2016 exchange plans, blamed several elements, including what it called loose rules for special enrollments. The for-profit insurer will make a determination in the next several months.
Aetna and Anthem also have voiced concerns, saying their margins are running below expectations and that the risk pool skews toward older, higher-cost patients. Other not-for-profit Blue Cross and Blue Shield insurers have anticipated sizable deficits for 2015, and North Carolina's insurance commissioner has questioned whether the ACA has harmed the state's insurance markets.
But in many areas throughout the country, especially Democratic-led states, the ACA's open enrollment has become routine. “People are pretty positive about it,” said Jim Moore, a Pacific University political science professor who follows the ACA in Oregon. “It's become a normal thing now.”
The same is true for smaller, regional insurers that prepared for the ACA's early hiccups. Michelle Zettergren, senior vice president of sales and marketing at ConnectiCare, said the 2016 open enrollment “went very well.”
The Connecticut-based health plan grew its exchange membership to approximately 52,000 people, or more than half of the state's total, according to preliminary numbers. Many switched from other plans, Zettergren said, indicating that people are shopping around to find better deals.
A vast majority of ConnectiCare's members enrolled in silver plans, Zettergren said, and most of those enrollees qualified for the ACA's cost-sharing reductions, which are available for silver-plan members who make between 100% and 250% of the federal poverty level. Most of the plan's enrollees are in their mid-40s, which the insurer expected, and it will offer plans again in 2017.
“Unlike the national players, we're focused solely on the state of Connecticut,” Zettergren said. “We had a mature marketplace prior to ACA, and it continues to be a mature marketplace for us.”
Aetna CEO Mark Bertolini believes the ACA exchanges can develop in one of two directions, he told investors this week. They can either serve as the conduit for a “Medicaid-plus” program, serving high-risk patients who earn less than 400% of poverty, or specific changes can make the individual market more attractive to younger, healthier people.
“That's yet to be decided and will be based on the kind of changes we make going forward,” Bertolini said. Aetna and a cadre of other large insurers have pressured the Obama administration to tighten special enrollments and cast aside proposals such as standardizing health plan options. Payers argue those measures lead to adverse selection and limit how they can control their own costs.
“You can be assured: We are contributing to the dialogue to form a long-term, sustainable and affordable marketplace,” Anthem CEO Joseph Swedish said on an earnings call last week.
The CMS has already eliminated several circumstances that qualify people to enroll in an ACA plan outside of open enrollment, and the agency touted that more young adults signed up for 2016 coverage thanks in large part to more marketing around the law's stiffer tax penalty. Roughly 2.7 million people ages 18 to 34, the target demographic for many insurers, enrolled this year.
“This risk pool is a better risk pool and will help in the long run,” CMS Acting Administrator Andy Slavitt said Thursday.
But those young adults still represent less than a quarter of the entire exchange population. Many have been turned off by the high deductibles and rising monthly premiums. Narrow provider networks have disgruntled others, although most people believe their choices of doctors and hospitals have been adequate.
“They're very savvy shoppers,” Sam Gibbs, executive director of AgileHealthInsurance.com, said of millennials. AgileHealthInsurance provides short-term medical plans, which usually last six or 12 months and don't have to follow the ACA's rules for underwriting or essential health benefits. Some young adults have chosen those short-term plans knowing they will still have to pay the penalty since they aren't ACA-compliant.
“They just do the math, and they figure it's more cost-effective for them,” Gibbs said.
AgileHealthInsurance and its publicly traded parent, Health Insurance Innovations, sold roughly 61,000 short-term policies and hospital indemnity plans as of Sept. 30. In some ways, their business models rely on young adults avoiding the exchanges.
Many executives believe it'll take at least another year or two before the individual marketplaces will have stable rates and broader enrollment. HealthPartners CEO Mary Brainerd told Modern Healthcare recently that her integrated system had 70,000 exchange members. As a provider and payer, she sees some of the concerns associated with the different benefit plans.
“The exchanges have started to feature much higher deductible plans with lower levels of coverage,” Brainerd said. “Whether or not that is the level of coverage we want, or hope people will have, is a completely different story. I worry about the balance between affordability and coverage adequacy.”