The not-for-profit co-ops have said extremely sick newcomers sank their finances in the opening years of the public exchanges. Now, Blue Cross and Blue Shield insurers report they are experiencing the same medical claims environment.
People who signed up for a Blue Cross and Blue Shield plan for the first time after the Affordable Care Act's exchanges went live in 2014 had higher rates of disease and used more medical services than other insured populations, the Blue Cross and Blue Shield Association said in a report released Wednesday. Those new enrollees therefore cost more than those with employer plans or people who had individual-market Blues plans before the ACA went into effect.
The report, however, isn't really surprising. Before 2014, Blue Cross and Blue Shield insurers and other carriers across the country were able to underwrite their individual plans, meaning they could charge people more based on medical history and age. Their pre-ACA risk pools in the individual market therefore favored healthier, less expensive members. Employer plans have more mixed risk pools.
Many of the new ACA enrollees likely were denied insurance previously because of their costly health conditions or because coverage was prohibitively expensive. The ACA severely limited medical underwriting and banned insurers from rejecting coverage to people with pre-existing health conditions. And through the exchanges, people have bought more affordable coverage and immediately used the benefits to seek much-needed care.
The Blues data indicate that insurers were mostly flying blind when they were setting premium rates and creating benefit plans in the first two years of the exchanges, and the population had much higher medical spending than expected, even when compared with employer-sponsored plans. Building 2016 premiums and plans was the first time insurers used hard data on the new ACA population.
“There was really an unknown as to what the medical conditions and the costs would be of the newly insured people that would be covered by the ACA,” said Alissa Fox, a senior vice president and lobbyist at the Blue Cross and Blue Shield Association.
The trade group, which represents 36 Blue Cross and Blue Shield companies, many of which dominant the markets in their states, analyzed medical claims data for 4.7 million members who bought plans in the individual market and 25 million people who have job-based health insurance through the Blues. Individual enrollees include people who bought plans both on and off the ACA's exchanges. The Blues association did not provide the raw data that was used.
New Blue Cross and Blue Shield members with ACA plans had higher rates of depression, diabetes and hepatitis C compared with people who already had individual and employer coverage with the Blues, the report said. Because of their increased likelihood of a disease, ACA enrollees also went to the hospital and doctor more, and they filled more drug prescriptions.
For instance, new ACA enrollees had annual inpatient admission rates that were 38% higher than those who had Blue Cross coverage through their jobs and 84% higher than people who had individual coverage before the exchanges went live. Visits to outpatient centers were higher by 10% for ACA members compared with employer group members and 48% when compared to previously insured individual Blues enrollees.
Blue Cross and Blue Shield affiliates, such as Health Care Service Corp., have lost billions of dollars from its ACA membership so far due to higher-than-anticipated medical spending. Premiums were raised accordingly for 2016, leading some experts and executives to believe the exchanges may be more stable and less costly in the coming years.
The Blues association said it will use the data to help high-risk exchange members improve their health by taking their medications and seeing their doctors for preventive checkups. The group also will simplify its outreach so more people can better understand how to use their health insurance.
“We need to expand even more of our efforts to really target people with these conditions and make sure they are going to their appropriate providers,” Fox said.