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Life Health > Health Insurance > Health Insurance

On the Third Hand: Operations

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On the one hand, I have a lot of fun covering “public health insurance exchange enrollment activity.”

It’s a lot of fun to try to figure out how the various Patient Protection and Affordable Care Act (PPACA) exchanges have organized their activity reports to make detecting enrollment trends difficult or impossible.

Example: The federal government and many state-based exchanges publish cumulative totals, not weekly or monthly totals. So, anyone interested in month-to-month changes in activity has to get out a calculator or a spreadsheet, do a lot of subtracting last-period totals from the new totals, and pray to whatever powers protect us against math errors.

It’s a little like a cross between an easy form of Sudoku and skydiving.

Then there’s my carefully chosen term “activity level.”

I torture the English language because the exchange managers refuse to give us sales figures. They insist on telling us “how many people have selected qualified health plans” through the exchanges and may or may not have paid for the coverage.

The sneakiness seems all the more silly when I see some state-based exchanges reporting, in excruciating, accurate, transparent detail, how well or poorly they’ve done.

The sad thing is that some of those transparent exchanges — example: the Minnesota exchange and the Nevada exchange — have had their own startup problems. But I sincerely hope that, whatever turns out to be right or wrong about the theory of the PPACA exchange program, the transparent exchanges end up doing as well as any can within the system, just because they (or whomever wrote the Sunshine laws that govern them) have tried so hard to do the right thing.  

On the other hand, the obsession with the idea that the exchanges should enroll 7 million people in QHPs, and that each state should meet its enrollment goal seems absurd.

Folks came up with those projections with a long, arduous, intense process that was probably about as reliable as asking a Ouija board, or using March 23, 2010, as the natal date for PPACA and plugging that into a Web-based horoscope generator.

Many of the exchanges seem to have a whole bunch of enrollees, however that whole bunch of enrollees compares with the original projections.

Maybe many of the functioning but creaky exchanges would be better off focusing on making sure they’re answering calls within two hours, paying clean medical claims within six months, and getting scaffolding to hold up any mountains of paper claims that are higher than Mount Everest, rather than rushing to take on additional enrollees that they’re likely to serve poorly.

On the third hand, I understand that, actuarially, that suggestion is naive. The exchanges plans need more healthy young enrollees to hold down claims risk.

If, on the fourth hand, the exchanges and exchange plans go into 2015 with a reputation for having been horrible throughout 2014, what will that do to the 2015 enrollee risk profile? Nothing good, I suspect.

On the fifth hand: Some loyal readers who believe strongly in a rigorously free market in health care might say that, at best, my thinking stems from me being put under an evil spell by the PPACA pod people.

Possibly, but I think wanting the public exchanges to operate as smoothly as possible is good for people who hate PPACA and people who just want to sell private exchange services as well as for people who like the PPACA exchange program.

Florida and other states have had efficient, popular, well-publicized, Chamber of Commerce-endorsed exchange programs that went down the tubes fairly quickly due to anti-selection pressures. If those exchanges entered death spirals, chances are the PPACA exchanges will, too.

If you hate the public exchanges, why would you want to let them use, “Our vendors done us in,” as an excuse for failures that may well be baked in to PPACA?

If you think exchanges can work in this day of the Internet and smart actuaries, it seems to me that the best thing for you would be for the public exchanges to work well enough for you either to buy them, if you’re big, or compete with them or sell services to them if you’re small.

But, if public exchange managers are out there facing at least some of the regulatory obstacles you private exchange managers face, maybe they can help you communicate with regulators and clear the obstacles while staying bureaucratic enough to leave plenty of business for private exchanges.

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