Covered California Touts Early Enrollment, But There’s A Cloud on the Horizon

Covered California has signed up more than 34,000 new individuals for health benefits since open enrollment started Nov. 1, exchange officials said Thursday.

That’s about 2,000 a day and “very strong enrollment” for so early in the sign-up period that extends through Jan. 31, said executive director Peter Lee.

But there’s a cloud on the horizon. UnitedHealth Group lowered its profit estimates Thursday, blaming expected losses on individual business sold through state insurance exchanges. The company told investors it will evaluate the business next year — and decide whether to continue in 2017.

The announcement sets off speculation about the future of state health benefit exchanges at the core of the Affordable Care Act. It also raises questions about UnitedHealthcare’s presence in Covered California. One of the largest insurers in the nation, the company is participating in the California exchange for the first time in 2016.

Nothing changes for 2016, said UnitedHealthcare spokesman Tyler Mason. And no decision has been made about 2017.

Lee didn’t express concern about the news. No health plans have guarantees for 2017, he said. Covered California is an active purchaser and negotiates with health plans every year.

Moreover, “UnitedHealthcare lost money in a lot of other states where a lot of other plans lost money,” Lee said. “Not one of our plans lost money.”

Covered California has about 1.3 million members. Somewhere between 295,000 and 450,000 new members are expected to sign up in the third annual open enrollment currently underway.

The fact that 34,000 new consumers signed up between Nov. 1 and Nov. 17 says “word is out that the doors are open,” Lee said. Spikes are likely by mid-December— the deadline for coverage to kick in by Jan. 1 — and again in mid January, when the enrollment deadline draws to a close.

“We are essentially looking at a two-month camel,” Lee said. “I’m confident we’ll see strong enrollment.”

The numbers are unlikely to come anywhere near the first-year blitz of 1.4 million, however. People clamoring for insurance have signed up and there will always be a need to refill the pool. Individual circumstances change and roughly a third of the participants drop out of the program over the course of the year.

“That’s not a failure; it’s success,” Lee said. A survey of those who did leave shows 85 percent still have insurance, many of them through employment.

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