Covered CA Sees First Enrollment Decline Despite Influx of New Enrollees

Enrollment in health plans sold by Covered California, the state’s health insurance exchange, dropped 2.2 percent this year even though the nonprofit managed to attract 432,484 new customers, a 3 percent increase over last year.

Peter Lee, the exchange’s executive director, said in a Wednesday morning news conference that enrollment decreased from 1.55 million in 2017 to 1.52 million in 2018.

He said the decrease, the first since Covered California started operating in 2013, was caused in large part to elimination of a key type of government reimbursement program for insurers, which forced the exchange to recommend that higher-income policyholders re-enroll off exchange.

During a joint conference call with several other state health exchange leaders, Lee said he was not concerned about the first decline in the total number of Californians that Covered California represents because there were plenty of new policy buyers coming in and many of them were on the younger end of the age spectrum, an important factor in keeping premium increases low.

“The biggest issue of all isn’t a big number of growth or decline; it’s are we getting healthy people in,” Lee said.

According to an analysis released by the National Academy for State Health Policy, other states, most whose health exchanges are run by the federal government, saw significantly larger enrollment drops this year. Louisiana, for example, reported a 23 percent decrease. Overall, states whose exchanges are run by the federal government reported a 5.2 percent average enrollment decrease compared to flat enrollment in states that run their own exchanges or operate in a “hybrid” arrangement with the federal government.

States with larger enrollment declines have generally attributed the reduction to the Trump administration’s decision to cut back on marketing efforts and shorten the 2017 open-enrollment period, which ended more than a month earlier than it did in California.

Double-digit premium increases in many states are also blamed for decreasing enrollment in many locations. The president’s late 2017 executive order to eliminate special “cost sharing reduction” payments directly to health insurance companies are blamed for the price hikes.

Unlike states that have generally opposed the ACA since its inception, Covered California brokered a deal with its carriers to add a surcharge to most of the silver plans it sells when the federal CSR payments were eliminated.

Those who make little enough to qualify for federal income-based subsidies are not hurt by the price hike. They just receive larger subsidies from the feds to cover the difference.

However, the minority of Covered California’s customers making enough that they don’t qualify for government help would have to pay full freight if they stayed in the exchange.

However, all of the plans Covered California sells are also available off-exchange either directly from health insurance companies or through qualified health insurance brokers. And, because they’re not on the exchange, there is no cost-sharing surcharge.

This fact put Lee in the strange position during open enrollment this fall and winter of urging his wealthiest customers to flee Covered California and buy off exchange.

He put the bulk of the enrollment decline that Covered California saw this year down to the intentional decision to this shift of higher-income enrollees to off-exchange plans, reducing the number of re-enrolling customers by about 3 percent.

A much bigger challenge, the elimination of the Affordable Care Act’s Individual Mandate, which requires most Americans to buy health insurance or pay a tax penalty, looms in 2019.

Though many predict the effects of this change will be significant reductions in enrollment starting next year, Lee said state-based exchanges such as Covered California have significant advantages. He said they’re still able to promote themselves in the communities they serve and doing so can bring in larger numbers of healthy people whose enrollments are necessary to counterbalance the expenses generated by those who are sick and generating big medical bills.

Source Link