More Americans who rely on the Affordable Care Act’s exchanges for health insurance coverage are keeping their plans longer throughout the year, which raises questions about what’s fueling that trend.
Health insurance giant Centene reported the same trend a month ago after releasing its second quarter results. Then federal health regulators spotted the same pattern in their most recent analysis of exchange enrollment.
In 2018, monthly enrollment peaked at 10.5 million enrollees in February and slipped to 9.2 million by December, “meaning a higher percentage of individuals stayed in their plans throughout the year compared to 2017,” CMS said.
When the exchanges launched nearly six years ago, it was expected that a high rate of low-income enrollees would churn, or switch coverage during the year as their circumstances changed either through securing employer-based coverage or losing eligibility for either Medicaid or marketplace subsidies.
Though the prediction of churning did play out, it wasn’t as high as initial expectations. In 2015, nearly 25% of low-income individuals surveyed in three states reported switching coverage in the trailing 12 months, according to a report in Health Affairs.
Now, it seems the tide is shifting as members stick with exchange plans longer, month over month, leading to speculation about whether the population that remains is sicker.
“Look, enrollment is a month-to-month decision for people,” Sabrina Corlette, a research professor at Georgetown University, told Healthcare Dive, noting it’s a decision they weigh against rent, food and other necessities. “I would expect that those who prioritize paying that premium either have been using, or expect to use healthcare services and need access to doctors, hospitals, drugs and medical devices.”
Corlette reviewed insurer rate filings for 2020 and found that some insurers are preparing for a smaller and sicker pool of enrollees.
“The individual market has contracted in recent years and that trend is expected to continue. This will lead to greater market-wide average morbidity as relatively healthier members opt to forego coverage,” Asuris Northwest Health explained in its 2020 rate filing to state regulators.
But some policy experts caution that without more data, it’s hard to pinpoint the underlying cause or how concerning it really is.
“There could be economic factors like a broader reliance on gig-based jobs that make people able to stay in the individual market longer. Or it could be that with a stronger economy people are less likely to need to buy individual market coverage to fill gaps in employment. If that’s the case, it might not be all bad news,” Cynthia Cox, a vice president at Kaiser Family Foundation, told Healthcare Dive.
Six years ago, the exchanges launched as a place where consumers without employer-based coverage could shop for health insurance coverage. Over time, prices have increased yet a majority of the consumers on the exchange qualify for financial assistance to help them afford coverage, which in turn shields them from the brunt of premium hikes. For those without assistance, costs are now out of reach and unsubsidized enrollees continue to leave the marketplace in droves. Over a two-year span, unsubsidized enrollment fell by 24%.
Others have warned certain policy decisions could drive healthy enrollees away who are seeking cheaper alternatives. For example, President Donald Trump’s administration has expanded short-term health plans, which do not have to comply with the ACA’s coverage requirements. And the individual mandate was essentially repealed by eliminating the actual financial penalty. The mandate was an important tool to attract younger and healthy enrollees to the marketplace.