Late Enrollments Destabilizing Market, Insurers Say

10925179_lDive Brief:

  • The Obama administration’s promotion of special enrollment opportunities for purchasing ACA health plans outside the regular open enrollment period is leading to abuse of the system and raising costs, insurers report.

As The New York Times notes, the administration has designated more than 30 special enrollment categories and in 2015 emailed millions of people to urge them to see if they qualified to sign up past the regular deadline.

  • However, the government did not do enough to check the true eligibility of the late enrollees, insurers and state officials argue.

Dive Insight:

In light of these concerns, the administration recently posted a notice in the Federal Register seeking evidence from insurers on potential abuse of special enrollment periods, and insurers responded. Overall, their feedback suggested significant numbers of those utilizing special enrollment opportunities have done so because they waited until they were sick, and many go on to drop their plans after receiving services.

While the trend is problematic, consumer advocates argue any tightening of controls should not place undue burdens on consumers, and overall, people are unlikely to be consciously gaming the system so much as failing to understand it.

Among the feedback:

  • The Blue Cross and Blue Shield Association reported those who signed up through special enrollment are utilizing up to 55% more services than their regular enrollees.
  • Aetna reported on average, their special enrollment enrollees keep plans for less than four months vs. eight to nine months for regular enrollees.
  • UnitedHealth reported more than 20% of their ACA plan customers last year came in under special enrollment and utilized 20% more healthcare than regular enrollees.
  • Anthem said their enrollees from special enrollment periods are more than twice as likely to drop their plans after a short time than regular enrollees.

“This practice,” the Times quoted Anthem VP Anthony Mader, “is harming the stability of the exchange markets and resulting in higher premiums.”


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