The biggest problem with the exchanges reflects a basic insurance rule: Insurers need healthy, premium-paying customers to balance claims they cover from the sick. Insurers have struggled in many markets because people who couldn’t get coverage previously due to a condition were among the first to sign up when the exchanges opened a few years ago. Healthy customers have been slower to enroll.Insurers say they’ve also been hurt by customers who appear to be waiting until they become sick to buy coverage. The companies blame liberal enforcement of the ACA’s special enrollment exceptions
This is a topic that cries out for in depth research and more information. The critical question that needs answering is how are those who apply for coverage outside of annual open enrollment able to time a serious illness or accident in order to plan when to buy coverage for it as this analysis prepared for America’s Health Insurance Plans and the Blue Cross Blue Shield Association suggests? While the analysis shows significantly higher medical utilization among those who enrolled in individual plans outside of open enrollment periods, it does not definitively demonstrate that these individuals waited until they needed medical care before enrolling. They could well simply be in poorer overall health compared to those enrolling in the open enrollment period and also have difficulty managing their household finances.
The urgency of the issue relative to the individual health insurance market reforms and the viability of the state exchanges as well as simple logic demand an answer. It makes no sense, for example, that an applicant for coverage could know in advance they were going to suffer a costly care event such as a heart attack or stroke, a bout of appendicitis or kidney stone and purchased coverage to take effect shortly before the event.
Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email