North Carolina ACA Plan/Insurer Update for 2016
June 2, 2015 Leave a comment
The News and Observer has a story on proposed rates for 2016 ACA plan offerings. Some quick thoughts:
- A fourth insurer is entering the N.C. ACA landscape; Humana will offer plans in the Winston-Salem and Charlotte areas. Blue Cross/Blue Shield is the only one to sell in all 100 counties. Consumers can choose from 4 insurance companies in some counties, and while BCBS NC remains the dominant insurer, the ACA has increased the number of companies selling indy plans in N.C. In some counties there are 4 choices. This wouldn’t have happened without the ACA.
- The top line headline has been proposed rate increases, with premium changes across the 4 carriers ranging from a 4.3% decrease to a 40.2% increase. For BCBS NC, increases range from 5% to 32%. Premiums rise when actual costs are higher than expected among the insured book of business, and they vary based on age, where you live, whether you smoke. You can only by insurance based on your own characteristics in the county where you live, so the sensible thing to do is to check out how much your premium would be when open enrollment comes.
- Premiums quoted in the story are actual premiums, and not what consumers pay. The ACA provides income based subsidies to defray the cost of insurance for persons with incomes between 100% and 400% of poverty. And around 90% of North Carolinians who are covered this year got subsidies, so most will be cushioned against these increases (magnitudes are big; avg NC premium ~$400/month, with subsidy ~$315/month).
- A key issue will be increasing enrollments of younger, healthier customers, which is key for the long term viability of any insurance market. It is likely that expanding Medicaid would help with the risk pool as well, at least by reducing the uninsured (persons in the so called coverage gap–below 100% and above 0% of poverty if a childless adult–are exempt from the mandate penalty).
- The following statement from the BCBS chief actuary is important (the bold is mine):
The company’s chief actuary, Patrick Getzen, said the ACA continues attracting people who had trouble getting insurance in the past: sicker, older customers who tend to run up medical costs. Getzen said 94.2 percent of Blue Cross’s ACA customers qualified for financial subsidies and nearly a fifth of them discontinued coverage after several months.
“Most of these customers purchased a plan, paid their initial premium, used costly health care services, then dropped their coverage,” Getzen said. “This is an unintended consequence of the way the law is written.”
He says “nearly a fifth” of their enrollees signed up, and later discontinued paying premiums. Then he says “most of these” (presumably those who disenrolled) used “costly health care services” before they disenrolled. Several points here.
- Disenrollment could occur because a person got a job and therefore insurance, transitioned into Medicare eligibility, or bad reasons, like signing up, getting care and then disenrolling.
- At least there is some magnitude of the number here, but this points out our need for better data with which to evaluate the functioning of the exchange in North Carolina (Nearly a fifth times “most of these” might be 0.18 x .66 ~.12 which when applied against the BCBS NC sign ups of 400,000 would be 48,000 people).
- A national estimate of disenrollment is that 1.5 Million on a base of 11.7 Million signed up as of February, 2015 which is 13%.
It would be lots simpler if we just had good information about how many people disenrolled. in what counties? What were their reasons and/or to what insurance status did they disenroll to (uninsured, Medicare, private, etc.)? And how much care did they use prior to disenrollment?
Many important questions. I wish we were collecting better data.