HHS Issues a Briefing on the Health Insurance Marketplace
May 1, 2014: ASPE Issue Brief from DHHS
HHS took stock of the Health Insurance Marketplace (HIX), reflecting activity through April 19, 2014. With all the speculation and political spin reported, depending on the biases of the source, it is good to have some reliable statistics on what has transpired so far. While it is still premature to make any iron-clad predictions, the preliminary information gives us something more concrete than the assumptions used to create the product offerings in the first place. The key enrollment stats cited are:
- Over 8 million have selected a plan through the HIX marketplace
- 28% are young adults between 18 and 34, and 34% are from zero to age 34
- The march enrollment surge accounted for nearly 3.8 million
This study parses out how much enrollment came through the state-based market HIX versus the federally facilitated HIX (roughly, 1/3 and 2/3, respectively). The next question people usually ask is about how many have effectuated their insurance coverage by paying their premiums. While not definitive, the data from the large carriers range from 80% to 90%, which is a good start.
Still there are some important issues that must be addressed in order to gauge how successful the first round of ACA-driven changes will be in achieving the public policy goals that originally spawned the legislation.
- Is the proportion of subsidized enrollees close to what was assumed?
- How many people were previously uninsured and now have coverage?
- How many of the enrollees switched out of employer-based coverage to individual plans on the HIX marketplace?
- What is the verdict on the affordability of coverage so far?
- Have the enrollments conformed to the assumptions about which metal levels would be chosen?
- Is the proportion of younger membership fitting the projections needed to make the economics of the whole program work?
Take-aways: Inside the Marketplace versus Off-Market
The thing I find most interesting is that the proportion of people enrolling in HIX plans that are subsidy-eligible is around 85% (consistent with assumptions), while a large number of people that are NOT eligible for subsidies enrolled in “off-market” plans. The report cites the Blues Association number of off-market enrollments as 1.7 million, which just accounts for Blues affiliate plans. The Congressional Budget Office estimates the total off-market volume as 5.0 million, which when combined with the 8.0 million HIX marketplace number, totals 13.0 million.
Three different surveys (Gallup, Urban Institute and RAND Corporation) give estimates of the drop in the rate of uninsured (ages 18 to 65) at 2.7%, 3.0% and 4.7%. That translates into a reduction of uninsured level by 5.4 million, 7 million and 9.3 million. These off-market plans must be ACA compliant and their finances are all factored into the state-level risk pools so as to avoid selection bias between the marketplace and the off-marketplace plans.
Finally, among those selecting plans on the marketplace HIX, only 25% of members went with the bronze level and 65% went with silver plans. However, those numbers skew towards higher percentages with silver plans for those with federal subsidies, and more towards bronze plans for those without.
Smart Money Bets for 2015 HIX Marketplace
The clever people I have interviewed among conference speakers expect a few things to be true for 2015:
- There will likely be pricing and products that look a lot like 2014 plans since there is little credible claims data available upon which to price for 2015 bid deadlines, apart from pharmacy claims. So pricing is likely to be driven by book rates and overall product positioning strategy
- There is going to be an even larger enrollment than 2014 coming into the individual marketplace, whether on the HIX market or off-market
- Risk adjustment is going to take center stage in the pricing and product design disciplines, more so than in Medicare Advantage
- The first year that products can be priced using claims experience is 2016, so whatever true-up that needs to occur with happen in the 2016 cycle year