3 PPACA exchange enrollment shadows

Will the public exchange system gain steam -- or lose momentum? Will the public exchange system gain steam -- or lose momentum?

The Patient Protection and Affordable Care Act (PPACA) public exchange system seems to have rolled up to its first major open enrollment period deadline with good numbers.

The second annual PPACA open enrollment period started Nov. 15.

In most of the country, consumers who wanted to buy new private qualified health plan (QHP) coverage through a public exchange, or change existing QHP coverage, had to get their applications in by Dec. 15 to have the new QHP coverage take effect by Jan. 1, 2015. Open enrollment for coverage that takes effect sometime in 2015 ends Feb. 15. After that, people who want coverage will have to go through medical underwriting to buy temporary health insurance or apply for permission to buy major medical coveage through the PPACA special enrollment period (SEP) system.

The U.S. Department of Health and Human Services (HHS) says it had recorded QHP selection information for about 2.5 million people by the end of the day on Friday. Exchange managers said call center and website activity was high over the weekend.

The state-based exchanges have taken in QHP selection information for more than 1 million other people.

The QHP selection figures for the HHS exchanges include only people who used the HealthCare.gov enrollment system to buy coverage or change their QHP selections. Once HHS adds people who are keeping existing QHP coverage to the total, it may find that exchange QHP had already enrolled about 7 million people in QHP coverage as of Dec. 15.

HHS has said it hopes to have 9.1 million people enrolled in public exchange QHPs by the end of 2015. Some are suggesting the total could be closer to 12 million.

Executives at HealthCare.com -- a private insurance marketing company with a strategically named website -- have provided independent confirmation of the strength of interest in the major medical open enrollment period.

Many HealthCare.com products are supplemental products that can be sold outside the open enrollment period. But, even there, referral volume for the week of Dec. 5 was 60 percent higher than referral volume for the three-week period before open enrollment began, the company says.

Can the public exchange system stay hot?

Caroline Pearson, an analyst at Avalere Health, says the public exchange system may cool off in the coming months now that it has already attracted the easiest-to-reach prospects.

For a look at some of the reasons why the public exchange system might lose some of its current geyser-like steam, read on. 

Sleepy man

1. The demographics of the remaining uninsured people have changed

During the open enrollment period for 2014, and during the first part of the 2015 enrollment, public exchanges could get a large amount of business simply by opening their doors to people with serious health problems who had been shut out of the private major medical insurance market before Jan. 1, 2014, when PPACA medical underwriting restrictions took effect.

The exchange QHPs also had obvious appeal for older consumers, who often had a hard time qualifying for major medical coverage before the exchange system opened.

Now, Pearson says, more of the prospects are young adults. Healthy, young, uninsured adults may be skeptical about the need for health coverage and hard to reach through conventional advertising and public relations campaigns, she says.

See also: Insurers go for the bronze buyers

ripples on a pond

2. HealthCare.gov is no longer a good punchline

A year ago, HHS and the managers of the state-based exchanges were getting hundreds of millions of dollars of unpleasant, but potentially helpful, free publicity from the fact that the exchange enrollment systems worked poorly.

This year, there may still be some enrollment system glitches, but they are creating little ripples of consumer dissatisfaction, not giant waves of publicity.

Possibly because of a combination of a lack of HealthCare.gov glitch humor and shrinking federal funding, uninsured Americans' awareness of the exchange open enrollment period appears to be low, Pearson says.

She says the lack of awareness means exchanges may have to continue the difficult, expensive process of sending live humans out to tell uninsured people about their options, and about the penalty PPACA is to impose on the uninsured.

Scales

3. Many of the remaining uninsured people earn too much to qualify for big premium subsidies

More than half of the people who enrolled in public exchange QHP coverage people for 2014 reported very little income. They earned less than 250 percent of the federal poverty level. That meant they qualified for big PPACA premium subsidy tax credits, and for PPACA subsidies that helped cut out-of-pocket costs.

This year, many of the remaining uninsured people earn too much to qualify for big subsidies, Pearson says. 

For people who don't qualify for public exchange subsidies, the off-exchange products sold by traditional insurance agents and brokers may be a better value than public exchange QHPs. 

See also: 3 PPACA World field reports

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