Early Experience With the Health Insurance Marketplaces

According to representatives of Milliman, the introduction of healthcare exchanges has been, for health plans, a harrowing experience.
Published Online: April 04, 2014
Early Experience With the Health Insurance Marketplaces
According to representatives of Milliman, the introduction of healthcare exchanges has been, for health plans, a harrowing experience due in large part to the year-end changes brought on by the Obama administration.  Charles Scammell, MBA, MPH, director, pharmaceutical practice, Milliman, New York, told Academy of Managed Care Pharmacy 26th Annual Meeting & Expo attendees that “few could have foreseen the operational challenges that occurred with regard to the deadline delays and the website challenges, much less the reported rush to enrollment that reportedly occurred in the last week of March.”
“So much has happened in the last few months, that getting the projected enrollment numbers right is very difficult,” he said. In addition, “getting an accurate enrollment count at this time., (early April) is a challenge given the last minute rush for enrollment for many. The data presented at the conference was through March 1, 2014 and has been sourced from HHS.1  According to HHS sources, in the period between December 31, 2013, and March 1, 2014, the online exchanges saw a 40% increase in visits. Some recent news clips have stated that another 20% may have enrolled this last week but it is tough to say how accurate that is at this time.

The breakdown between male and female enrollees reported by HHS is about 45% to 55%, which has not changed much since December 2013. HHS has also reported that the federal exchange seems to have a slightly higher percentage of male enrollees than the state run exchanges. One area of particular concern for underwriters is the age of sign-ups: “HHS has reported that here has been a recent uptick in the younger age group,” said Mr. Scammell “ but not as high a percentage as desired”

As reported by HHS, the silver plans have been chosen most often—64% of enrollees have chosen silver plans. Silver plans are generally less expensive than platinum and gold plans and because of the availability of subsidies, the silver plans have a higher actuarial value. For fully subsidized silver plan members the actuarial value can be close to 90%. Roughly speaking, those beneficiaries with full subsides are paying about 10% of the overall cost. HHS also stated in its March release that 83% of those who selected metal plans qualified for a premium subsidy of some type. HHS has estimated that roughly 25% of those who enrolled did not have previous insurance, which is a bit less than anticipated, but it is safe to say that the number of uninsured overall has decreased.
Mr. Scammell reported that, states like California that conducted an active marketing campaign to Hispanics and other low income groups, may have exceeded their sign-up goals. Those who did not actively market the exchanges likely fell short of the enrollment goals.

“Insurance companies are not in the gambling business and the movement into the exchange business has its risks. Many expect the exchange insurers will attract sicker folks on average but only with actual experience we will know for certain,” said Mr. Scammell.


1. US Department of Health and Human Services. ASPE Issue Brief: health insurance marketplace: January enrollment report for the period October 1, 2013 – December 28, 2013. http://aspe.hhs.gov/health/reports/2014/MarketPlaceEnrollment/Jan2014/ib_2014jan_enrollment.pdf. Published January 13, 2014. Accessed May 15, 2014.

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