By Sara Hansard
Feb. 13 --Health insurers aren't alarmed by the relatively low enrollment of
young adults in the Affordable Care Act marketplaces, but the heavy
concentration of women over men might be a concern, industry consultants told
Bloomberg BNA Feb. 13.
“There's been improvement in the numbers,” James
O'Connor, a principal and consulting actuary in the Chicago office of Milliman
Inc., told Bloomberg BNA. “The most noteworthy thing, though, is the gender
In a report released Feb. 12, the Department of Health and
Human Services said that 55 percent of the nearly 3.3 million people who
selected qualified health plans in the marketplaces from the beginning of open
enrollment Oct. 1, 2013, to Feb. 1, 2014, are female and 45 percent are male.
The first open enrollment period under the ACA lasts until March 31.
“You would expect something closer to 50-50,” O'Connor said. “Probably
carriers may have assumed that more females would be coming in than males. But
probably not a 10-point difference.”
ACA bars insurers from discriminating against people based on gender as of
2014. Previously, women were charged more because their health-care costs are
considerably higher than men's, particularly costs for women between the ages
of 25 and 45, O'Connor said. “We see that a young female could be twice the
cost of a young male,” he said.
In contrast, costs for older men, in the
upper-50s or low-60s age bracket, are higher than for women of that age,
O'Connor said. Nevertheless, health-care costs for women between the ages of 18
and 64 are 15 percent to 20 percent higher than for men on average, he
“The gender is skewed more female than I'd expected,” said Caroline
Pearson, vice president of Avalere Health LLC and leader of the Washington
consulting firm's Health Reform Practice. “We were expecting about 53 percent
male just based on who's uninsured and eligible” to participate in the
marketplaces, she said, noting that men are more likely to be uninsured.
However, Pearson said men may be more likely to procrastinate in enrolling,
and the cost impact of the proportion of women to men in the marketplaces won't
be severe because women's higher health costs are primarily in child-bearing
years. “The child-bearing population is still a minority of exchange
enrollees,” she said. “It will limit the impact of a female-heavy mix on
pricing” of premiums.
The low portion of enrollees in the 18-to-34 age
group has received much attention as young adults are needed to keep health
costs, and premiums, low. The Feb. 12 HHS report said 25 percent of enrollees
in the first four months of the marketplace open enrollment period were between
the ages of 18 to 34, lower than the 40 percent target projected initially by
the Congressional Budget Office and the Obama administration.
Carlson, an actuary and principal in the Milwaukee office of management
consulting firm Oliver Wyman, told Bloomberg BNA that young adult enrollment so
far appears to be lower than young adult enrollment in the individual market
prior to 2014. In 2011, 28 percent of the individual insured market was between
the ages of 21 and 39, he said.
However, Carlson said, “While it appears the young population
is enrolling at lower rates, what's important is how it relates to what the
actuarial assumptions were.” Comments from some carriers reflect that
enrollees' ages fit with those assumptions, he said. The ACA prohibits insurers
from charging older enrollees more than three times what young people are
charged. Since older enrollees were previously charged as much as five times
more, that has meant premium increases for many young adults who don't qualify
for enough subsidies under the law to offset the difference.
Moreover, the share of people ages 18 to 34
enrolling in the marketplaces increased to 27 percent in January, a 3
percentage point increase over the previous three-month period, the HHS said.
“It's going in the right direction,” Carlson said.
In a Jan. 29
conference call on fourth quarter 2013 earnings, WellPoint Inc. Chief Executive
Officer Joseph Swedish said, “The average age of individual customers is
closely tracking expectations,” according to a transcript. “We anticipated that
exchange enrollees would generally be older than our legacy individual
customers. And our pricing assumptions for both on- and off-exchange products
reflected this view.” WellPoint is one of the most active health insurers in
the ACA marketplaces.
In Aetna Inc.'s fourth quarter 2013 earnings call
on Feb. 6, Chairman and Chief Executive Officer Mark Bertolini also said of
Aetna's exchange enrollment, “As it relates to the risk in the pool, the
demographics are about where we thought they would be,” according to a
transcript provided to Bloomberg BNA.
However, if changes were made to the ACA's risk adjustment
programs, that might cause problems for insurers, Carlson said.
Legislation that would repeal the risk corridors program, which provides
money to insurers who suffer higher than expected losses, has been introduced
in Congress by Sen. Marco Rubio (R-Fla.), and some House Republicans have
pointed to a recent Congressional Research Service memo as an indication that
Congress would have to appropriate money for the program . Republican
opposition to the ACA may make it difficult to approve an appropriation.
If money from the program isn't
forthcoming as expected by insurers, “It may make them more conservative in
their decision as to whether they want to be in the exchange or not,” Carlson
In an e-mail to Bloomberg BNA Feb. 13, Robert Zirkelbach,
spokesman for America's Health Insurance Plans, said, “Given uncertainty about
who will purchase coverage in the new marketplaces, the reform law includes
temporary premium stabilization programs to help provide stability and
predictability for consumers as these new reforms are implemented. Making
changes to these programs in the middle of open enrollment--after premiums have
been set and consumers have begun to enroll in coverage--would cause
disruptions in the market and higher premiums for consumers.”
Aetna earnings call, Bertolini said the company expects its marketplace
business “to actually have a negative impact on our earnings, and that's built
into our guidance for 2014.”
Aetna spokesman Matthew Wiggin told
Bloomberg BNA in a telephone interview that the risk corridors program and two
other risk adjustment programs--known as the “3 Rs”--were included in the ACA
to provide an incentive for plans to participate in the marketplaces. “The
issue that we're looking at is that if you remove the 3 Rs prematurely, it
could increase costs for taxpayers through higher premiums and costlier
subsidies,” he said.
surprise in the enrollment data is the low number of children under the age of
18 covered in the marketplace plans, O'Connor said. “It's coming in at 5
percent of the total,” he said. While some children are probably qualifying for
coverage under Medicaid and the Children's Health Insurance Program, “We
generally would expect more children coming in to the individual markets along
with the parents.”
While health-care costs for infants before the age of
1 is higher than for other ages, health-care costs for children are low on
average, O'Connor said.
It isn't clear what the implications are for the
low number of child enrollees, O'Connor said. In addition, he said, what isn't
yet known is “are we getting more unhealthy people than is represented in the
population. That's really a key to how successful the program will be.”
Insurers participating in the marketplaces must propose premium rates in May
for 2015, so they will have to rely on demographics rather than claims
experience, he said.
Pearson found some of the state data to be
unexpected. Republican-leaning states where opposition to the ACA has been
high--such as North Carolina and Florida--“are doing relatively well in terms
of enrollment,” she said. The marketplaces in those states are run by the
federal government rather than by the states themselves.
high enrollment there is “a good sign that it seems like the federal exchange
states are catching up,” she said.
Avalere published an analysis Feb. 13 titled “State Exchange Enrollment Widely
Variable Compared to Projections.”
To contact the reporter
on this story: Sara Hansard in Washington at firstname.lastname@example.org
the editor responsible for this story: Janey Cohen at email@example.com
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