Observations on Healthcare Exchange Enrollment

The biggest question that has surrounded the launch of the Affordable Care Act healthcare exchanges is whether they could attract enough “young invincibles” to make the enterprise financially sustainable. Or, would “adverse selection”  saddle the system with older, sicker customers whose healthcare costs would eventually drive the exchanges out of business? The Obama administration’s release of preliminary enrollment figures provides a first glance at the answer to that question.

What does the administration’s data tell us? The first thing everyone notices is that enrollment is trending older – 24% are between the ages of 18 and 34. Compare that to the adult American public where over 30% are between 18 and 34 or the uninsured population where more than 40% are in that age bracket. At the other end, a third of the enrollees are between the ages of 55 and 64. This sends up some warning flags that the exchanges may be getting more older (and sicker) customers than hoped for.

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Additionally, the federal data disclosed that 2.2 million Americans have signed up for insurance through the exchanges as of December 28th, 2013. That represents about 1% of the U.S. adult  population and 5% of the uninsured population (assuming all of the enrollees were previously uninsured). About 54% of the current enrollees are women and almost 80% of the enrollees qualify for federal subsidies to reduce their premiums.

Taken as a whole, this data indicate that the ACA exchanges still face challenges. Halfway through the open enrollment, they are less than halfway to the enrollment goal of 7 million set by the administration. Their current subscription mix is older, less affluent, and believed by many to be less healthy (NY Times). However, the data released by the Obama administration does not actually have any information on health status of enrollees.

But we do…!

The Reuters/Ipsos daily poll surveys about 350 people per day and about 2,500 each week. Since October 1st, 2013, we have included several questions in our survey about the exchanges; specifically, whether the respondent has visited an exchange and if they have successfully registered for health insurance coverage. Although we are talking about a minuscule proportion of the American public – about 2% – by interviewing so many people over the last three and a half months, we have accumulated a reasonably sized sample of Americans who have registered for insurance through an ACA exchange. So what are we seeing?

In addition to the questions about using the exchanges, we have a few other data points that should shed some additional light on the discussion. First off, we ask about health status of the respondent. Here is what that looks like among enrollees vs. all uninsured.

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Our data indicate that sicker people are signing up with the exchanges at a higher rate than non-sick people. This indicates that in addition to skewing older, the exchanges are currently skewing sicker. However, since we have tracked this since the launch of the exchanges, we also have trend data on this population, which is critical to understanding how this balance may shift over time.

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The sickest people signed up first; over time, more healthy people are signing up. This data strongly suggests that the earliest adopters – the individuals who fought through the worst of the Healthcare.gov snafus – were disproportionately suffering from major health issues. This makes sense  because you would have to be very concerned with your health to deal with that challenges of the first month of the federal exchange website.

However, every month since then, the health mix has become more balanced. In the first few weeks of January 2014, our data indicates that the exchanges are actually recruiting more healthy people than sick people. If this trend continues, the exchanges might be sustainable after all.

 

 

 

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