All eyes were fixed on final 2014 HIX enrollment numbers in the waning days of March and what they would mean for adverse selection and future monthly premium pricing. But such data has eclipsed significantly important details about the post-health care reform marketplace that have been largely overlooked.
Case in point: It has been estimated that millions of Americans who aren’t eligible for HIX subsidies chose health insurance options off the exchanges, including young and healthy adults who are most desirable in any insurance risk pool.
The potential implications of this phenomenon are worth noticing. While only about 25 percent of those between the ages of 18 and 34 signed up for coverage on public exchanges, according to the federal government’s most recently released enrollment figures, about 40 percent of that same age group bought off-exchange plans in the fourth quarter through the online comparison-shopping site eHealth. A survey of eHealth customers found that 63 percent mistakenly thought that they could only enroll in HIX plans through government exchanges.
Health insurance carriers also say that a fair number of new signups do not involve HIX options. WellPoint, for example, recently reported that about 20 percent of the roughly one million customers it expected to enroll new plans nationwide would be off the exchanges. The number was even higher for Highmark, which noted that approximately 30 percent of 133,000 members who enrolled as of the middle of last month chose coverage outside the exchanges.
The trend is understandable. Jay Jensen, a managing member of Insight Benefits Group, LLC, says carriers that have shunned the HIX model are able to offer competitive pricing off the exchanges by targeting healthier customers with higher incomes who are going to have a better claims experience than unhealthy lower-income earners who could trigger adverse selection.
His employee benefits and risk management firm has partnered with two Web-based entities, Quotit and Norvax, to help employees shop for health insurance on or off the exchanges with the help of licensed professionals.
Consumers may barely notice any differences between HIX and off-exchange options, aside from whether they’re eligible for federal subsidies. The same plans available on public exchanges often can be purchased off those exchanges through a local health insurance agent, according to Brian Mast, vice president of communications for eHealth Inc. “In some cases there may be more options outside of exchanges because certain carriers have opted out of state exchanges, but are still offering ACA plans,” he says.
Whatever the final enrollment numbers for both HIX and off-exchange options turn out to be, industry analysts surely will comb through every detail for the most accurate picture of how the new online marketplace might evolve.
Clare Krusing, a spokeswoman for America’s Health Insurance Plans, says the focus needs to be broader than just the number of people enrolling and also include, as suggested, the age and health status of enrollees. Another critical point is that the impact of enrollment will vary by state. “What may happen in Illinois with this risk pool isn’t going to have the same impact as, say, California,” she says.
Shutan is a Los Angeles freelance writer.
This story first appeared at HIX.
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