IUPUI Professor Says Relax about ACA Enrollment Numbers
March 26 2014 – As the March 31 deadline approaches for enrollment in the health exchanges offered by the Affordable Care Act, many experts are concerned with the number of people that have enrolled and what it will mean for the cost and sustainability of the plan.
A local professor is saying, despite the lower than projected number of enrollees, there’s no cause for great alarm. Heather A. McCabe is an Assistant Professor at the Indiana University School of Social Work, adjunct professor at both the Indiana University Robert H. McKinney School of Law and the Richard M. Fairbanks School of Public Health. McCabe issued the following statement on why the nation should “relax about the Affordable Care Act enrollment number.”
We are nearing the March 31 deadline for people to enroll in insurance through health exchanges. As we do, many interested in this law are waiting to see what the final enrollment numbers will be. We hear words like “death spiral” and worry that health care will be unaffordable and unattainable.
Here are some reasons to rest easy:
The numbers expected for the first years were estimates. We will know better in future years what actual numbers will be based on previous years’ enrollment — but the insurance companies knew this just as the government did. They knew this when they set their rates for this first year.
The numbers do not tell us the mix. In other words, the proportion of high-cost enrollees to low-cost enrollees will have an impact on the future premiums in the program. It will be some time before we know what kind of claims we see by those enrolled and what proportion of enrollees are sicker versus healthier. Though age can be a proxy for costly, the actual mix of sicker versus healthier individuals will be the true driver of premiums.
Kaiser Family Foundation recently completed a study of what would happen if enrollment by the “young invincibles,” those who are young, healthy and low cost, were less than anticipated. The study showed that in the worst case scenario (50 percent less enrollment by this group than anticipated) insurance premiums would raise by approximately 2.4 percent annually. Given the rising premiums over the last decade, a 2.4 percent increase should not bring the market to a screeching halt.
The insurance companies are not depending on marketplaces for their solvency, or even the majority of their business. If there is a rocky start these first few years, they have their traditional markets making up the majority of their business. They also have risk corridors (love them or hate them) to ensure they can stay solvent.
It is going to take time. Regardless of whether enrollment numbers hit 6 million as of March 31, it will take some time for the market to figure out where premiums should be set. This date and these numbers will not be the end game in premiums. In this time of immediate gratification it may be hard to wait and see, but change takes time. And changing a huge system with many competing interests takes a lot of time.
So sit back and relax. We are in this for the long haul. The numbers are but one indicator over time. Let’s talk again in a year or two and see where we are.
Professor McCabe serves as the Chair of the Law Section of the American Public Health Association. She has served as a medical social worker at a pediatric tertiary care hospital. As well as providing direct care, she has served in the policy arena as the Executive Director for the William S. and Christine S. Hall Center for Law and Health at the Indiana University Robert H. McKinney School of Law.