Obamacare enrollees older, sicker than insurer forecast

May. 08, 2014 @ 08:17 PM

Blue Cross and Blue Shield of North Carolina officials said Thursday that they found that the people who enrolled in the individual Affordable Care Act plans it sold on the online health exchanges were older and sicker than expected.

That may mean higher rates for Affordable Care Act plans in the future, said Barbara Morales Burke, the insurer’s vice president of health policy.

“(It’s) a concern when we think about future premiums,” she said.

The Affordable Care Act, also known as Obamacare, is the federal health law that requires most Americans to have health insurance. The roll-out of the online insurance marketplaces – where insurance companies sold plans that met certain requirements of the law -- was a provision of the act.

Blue Cross, the state’s largest insurer and the only company that sold Affordable Care Act plans statewide, saw fewer people enroll by May 1 than company officials expected.

Morales Burke said the insurer saw 232,000 people enroll by May 1 in the health plans that it offered through the federal online health marketplace in the state.

Ninety-one percent of those customers qualified for government subsidies to help them pay for he plans, she said.

And based on historical information, the majority were not Blue Cross customers last year.

Morales Burke said they expected 50 percent of enrollees to be 34 years of age or younger, she said, but they got 32 percent in that range.

About 69 percent of enrollees were between the 35 and 54, while the insurer expected 49 percent in that range.

It’s important to an insurance company to have healthy customers in the mix to balance out the cost of paying for customers with chronic conditions, she said.

“We need to have customers with low healthcare costs (to) offset claims of customers with high health care needs,” she said.

Morales Burke said an optional survey showed that the enrollees also had more chronic conditions like diabetes, depression, asthma, cancer and heart disease.

And because of the federal health law, she said the insurer can no longer charge those customers higher rates.

She said preliminary data also showed the enrollees were using more cardiology, obstetrics and gynecology, and orthopedics services, and seeking prescription drugs for mood and attention deficit disorders, HIV and infectious hepatitis.

“Blue Cross (Affordable Care Act) customers are older, have more chronic conditions than we anticipated than when we set rates for 2014 last year,” she said. “So when we set rates this year for 2015 ACA plans, those rates will need to be higher to reflect anticipated healthcare needs and usage of new ACA customers.”

She said enrollment differed from expectatons because the plans attracted a sicker population, and because the Obama administration’s change in policy to allowed customers to keep existing, non-compliant plans for two years. Morales Burke said the majority of the Blue Cross customers who were eligible to do so, did.

“We didn’t plan for (transition health care plans) -- the possibility of it didn’t exist,” she said. “They’re paying rates that match the plans they have.”

Adam Linker, health policy analyst for the N.C. Justice Center, a liberal-leaning Raleigh-based group that advocates for low-income people, pointed to another statistic in Morales Burke’s presentation – that about 91 percent of people who enrolled in ACA plans through Blue Cross got a subsidy to help pay for the cost.

He said the premiums are determined as a percentage of income, so even if the insurer’s rates do go up, the customer would not pay a larger share of his or her income.

Linker said his reaction to the raw numbers was that he thought they had a “pretty good age mix.” He also said that Blue Cross is still “dominating the market,” and perhaps the state’s high overall enrollment numbers would entice other insurers to enter the market.

Across North Carolina, 357,584 people enrolled in plans through the federally run exchange between Oct. 1, 2013, and March 31, according to the U.S. Department of Health and Human Services.

The state was one of the top in the nation for enrollment, exceeded only by California, Florida, New York and Texas.

David Ridley, faculty director of the health program at Duke University’s’ Fuqua School of Business, said Blue Cross got a less healthy mix than expected, but he asked if the population purchased higher-cost plans to help offset that.

In the call, Morales Burke said about 80 percent of its exchange customers purchased a Silver Plan. That level of plan comes with higher premiums than the Bronze plans.

Ridley also said he’s curious to see numbers from the other insurer that sold plans through the federal insurance exchange in the state -- Coventry Health Care of the Carolinas. Coventry sold plans in select markets. He said that even if other insurers enter the market, it’s “entirely possible” that Blue Cross would remain the only insurer in the less desirable parts of the state.

“I’m really curious about whether the mix of patients for North Carolina was less healthy, or if Coventry attracted a healthier population in part because Coventry was not in every county,” he said. “So just because of location they might have had a healthier mix, or maybe Blue Cross and Blue Shield’s strong brand name works against them if they attract a less health group of patients.”