This article originally appeared at Healthcare Dive on Feb. 25, 2015.
ACA enrollment dates for 2015 have veered significantly off course from the original plans, with extensions in many cases for people who were unable to enroll by the Feb. 15 deadline due to technical difficulties, and the announcement of a second enrollment opportunity to take place from March 15 to April 30 for those who are just learning about the tax penalty and who wish to avoid it for 2015.
How might these late enrollments affect insurers? According to health law expert Timothy Jost, they will most likely prove a benefit to the 2015 risk pool.
A low-risk pool?
Jost tells Healthcare Dive that those who have bypassed the first two opportunities to sign up for health coverage under the ACA are probably a group that is primarily healthy and low-cost.
He suggests the people who are most in need of coverage were likely those at the front of the line. At this point, he says, enrollees are likely to be healthier and younger.
“Presumably, people who have now sat out two enrollment periods are people in reasonably good health who are not in desperate need of health insurance,” Jost says.
Having said that, however, Jost adds that certainly some of the new enrollees will not be in great health, and beyond that, it’s possible that some people will discover a health issue between now and the next enrollment period, and rush to sign up as a result.
“There’s some risk to insurers from prolonging the open enrollment period, and there’s also the fact that they are going to have a harder time knowing exactly what their pool is for 2015 and projecting their rates for 2016,” Jost says.
So what should insurers expect from the late enrollments, and should they consider them an overall benefit or burden?
What issuers can expect
For the extensions to the current enrollment period, Jost suggests it won’t be a big deal to insurers either way. He says there is a maximum of about 150,000 people in line to complete enrollment, and probably not all of them will do so.
As for the newly scheduled second enrollment period, he suggests a likely outcome will be larger number of lower-cost enrollees. The impact could be significant given that an estimated 6 million Americans will soon be facing the tax penalty for their lack of coverage in 2014.
“I think that will be a benefit to the industry, and I may have missed it, but I haven’t heard the industry pushing back against this or complaining loudly about it, so I think they probably have the same assumption,” Jost says.
“What the proportion is between people in that group who are healthy as opposed to people in the group who either are unhealthy and just hadn’t realized what’s going on, or people in that group who become unhealthy, would probably be a bigger concern,” he says. “But it just seems to me that on balance, this is a plus for insurers and they should welcome it.”
Not everyone is so optimistic. Jim O’Connor, principal and consulting actuary at Milliman, stressed to Bloomberg that there’s no telling what the mix will be of healthy and sick enrollees, because giving people more time to enroll raises the risk that they will wait until they need it, increasing the potential for adverse selection. “It does have some potential for increasing costs,” he said, but it would likely be a “manageable change.”