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Life Health > Health Insurance > Health Insurance

5 reasons to shrug off the 2015 HHS exchange plan forecast

By Allison Bell

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An arm of the U.S. Department of Health and Human Services (HHS) has just come out with a new commentary on how many U.S. residents might get public exchange plan coverage in 2015.

The second annual Patient Protection and Affordable Care Act (PPACA) open enrollment period is set to start Saturday and end Feb. 15, 2015.

Analysts at the HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE) have suggested that the country could end up with 9 million to 9.9 million paid exchange qualified health plan (QHP) enrollees in 2015. Originally, analysts at the Congressional Budget Office (CBO) suggested that the exchange QHPs might have 13 million enrollees in 2015. 

QHP enrollment will probably be lower than the CBO predicted in the coming year because employers and purchasers of individual exchange are moving toward the public exchange system more slowly than expected, the ASPE analysts say. They point out that the CBO analysts assumed the PPACA exchanges would take about three years to expand to their full size. In the real world, the ASPE analysts say, big new health programs seem to take about five years to ramp up to their full size.

Edmund Haislmaier, a senior research fellow at the Heritage Foundation, said the CBO numbers were soft to begin with. “The new projections from HHS are still optimistic but more realistic,” Haislmaier said.

Rep. Darrell Issa, R-Calif., chairman of the House Oversight & Government Reform Committee, said in a statement that he believes HHS is just trying to move the goal posts to lower expectations. 

For insurance agents and brokers, knowing just how many consumers will get QHPs from the exchanges, PPACA-compliant plans off-exchange, or PPACA plan alternatives off-exchange could be helpful.

If you’re a producer, should you focus mainly on offering PPACA exchange assistance services and gap-filler products for exchange users; off-exchange PPACA plans; or products meant to help consumers with old, grandfathered and “grandmothered” PPACA-free major medical plans keep those PPACA-free plans as long as possible?

Or, will PPACA plans of all kinds be such a nightmare that you need to figure out how to persuade consumers to swallow hard, pay the PPACA penalty to be imposed on the uninsured or underinsured, and buy a medically underwritten short-term health insurance policy with a flexible network and a modest deductible rather than a policy that offers unlimited benefits for liver transplants but little help with paying to fix broken arms?

So, can you use the HHS crystal ball to shape your own marketing and resource planning?

For ideas about why relying on that crystal ball might not be a great choice, read on.

Fearful

1. HHS has motives to come up with predictions that are on the low side.

HHS analysts themselves actually estimated in mid-2013 that the exchange system would attract only 4.3 million enrollees, and they did not think at the time to bother to try to distinguish between consumers had signed up for coverage and those who had paid.

officials then spent months explaining why they hoped the PPACA exchange system still could possibly overcome enrollment system glitches well enough to attract the 7 million enrollees that CBO analysts had projected the exchanges might attract.

Once HHS officials found, in April, that more than 7 million people had chosen exchange QHPs, they then spent months dealing with critics who asked whether the consumers had actually paid for their coverage. Once HHS officials reported that the vast major of the consumers who had signed up for coverage had paid for coverage, they then had to deal with questions whether all of the paid enrollees were still enrolled, or whether some had dropped out and let the number fall to less than 7 million — even though, again, HHS itself had not created the 7 million figure.

Another reason for HHS to keep volume estimates on the low side is that a somewhat lower enrollment level might reduce the value of official exchange regulation and exchange paperwork burden estimates.

Computers

2. The real enrollment numbers will depend on variables that are difficult or impossible for HHS to forecast or control.

How well 2015 exchange QHP open enrollment goes might depend heavily on how well public exchange enrollment systems work. Exchange program managers at HHS, and at the state-based exchanges, seem to have been even quieter this year than they were before the start of the first open enrollment period.

That might be a sign that the exchange information technology managers are busier testing system, or warier of provoking glitch gods by making confident predictions about how well their systems will work, but it might be a sign that enrollment system glitches are still a thing.

HHS, for example, began letting small businesses in some states start testing the Small Business Health Options Program (SHOP) section of the HealthCare.gov site earlier this month. Early users reported encountering frustrating glitches, and HHS temporarily pulled the system down to try to fix it.

Man looking at a chalkboard full of question marks

3. It’s not clear whether the historical numbers we have now are any good.

The Centers for Medicare & Medicaid Services (CMS), the HHS division in charge of the PPACA exchange system, now says the HHS-run and state-based exchanges had a total of 7.1 million of paid QHP enrollees in October, with the number down from a total of 8 million paid and unpaid enrollees in April. CMS says the enrollment total was lower because of a combination of normal attrition and the failure of some consumers to pay their first-month premiums.

But CMS has still not published SHOP enrollment figures, and it could be that the October numbers will be subject to further changes as more information about what happened with the “special enrollment period” (SEP) enrollments that occurred after the end of the first annual open enrollment period comes in.

Uncertainty about current enrollment numbers could affect the accuracy of any projections.

Mitch McConnell

4. It’s hard to know whether the public exchange system will even operate in its current form for a full calendar year.

One reason to think that 2015 exchange QHP enrollment could fall much lower than the ASPE analysts expect is that the Republicans now control the Senate as well as the House. Another reason is that the ability of the HHS-run exchanges to offer PPACA premium subsidy tax credits in PPACA-loathing states has survived mainly because on appeals court panel found that the PPACA premium subsidy provision is so poorly written that HHS can interpret the provision however it wants to interpret it.

In theory, it’s possible that the entire public exchange system could disappear in a mountain of shredded paper before the end of 2015.

Wall Street sign

5. Early insurer, broker and consumer interest in the 2015 exchange open enrollment period seems to be strong.

A reason to think that 2015 exchange QHP enrollment could be much higher than the ASPE analysts are predicting is that publicly traded insurers and publicly traded hospitals love the program.

When the Supreme Court said it would look into whether the HHS-run exchanges can really offer PPACA premium subsidy tax credits in states that hate PPACA, investors tanked the health insurer stocks. During conference calls with securities analysts, the insurance company executives seem to be more interested in figuring out how to shift small-group and off-exchange individual business onto the exchange than in complaining about exchange system glitches.

Hospital executives have been telling securities analysts how grateful they are for what PPACA has done to lower the number of uninsured patients coming through their doors, and some are talking about their efforts to persuade more patients to sign up for exchange coverage.

Managers of Maryland’s exchange — which switched from using a glitch-prone state-run enrollment system to using HHS IT systems — said volume has been strong since a window shopping feature opened on Saturday.

Managers of Nevada’s exchange are also seeing strong interest. The exchange there also suffered enrollment system glitches, and the managers considered switching to the HealthCare.gov system. Brokers have sued in connection with allegations of problems with collecting commission payments.

But in spite of the problems, about 500 Nevada brokers have gotten certified as exchange brokers for the 2015 open enrollment period, and the exchange managers have seen strong interest in re-enrollment e-mails. About 33 percent of the exchange QHP users who received a re-enrollment e-mail in early October opened it, and 17 percent of the recipients opened a second re-enrollment e-mail sent in early November, exchange managers say. The exchange managers say those e-mail rates are high.

Image: The Wall Street sign. (AP photo/Jason DeCrow)

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