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Feds say individual health claims fell 0.1% in 2015

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Health claim costs for people with individual major medical coverage written under the new Affordable Care Act rules may have fallen a little between 2014 and 2015, Obama administration officials say.

Administration officials make that case in a new analysis based on reports health insurers filed with the ACA risk-adjustment and reinsurance programs.

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The officials look at U.S. claim costs for individual enrollees on a “per member, per month” basis.

For the country as a whole, the average level of claims per-member, per-month costs fell 0.1 percent, the officials say.

For the 10 states with the biggest growth in enrollment in ACA-compliant individual health policies, average costs fell 5 percent, the officials add.

The officials who refer to the ACA public exchange system as “the Marketplace” program, go on to say that there are signs typical individual health enrollees may be getting healthier.

“Nearly all states saw continued growth in Marketplace enrollment in 2016, suggesting continued improvement in their risk pools,” the officials say.

Thanks to new Centers for Medicare & Medicaid Services efforts to tighten enforcement of applicant eligibility rules, “we expect the Marketplace risk pool will continue to grow and improve going forward,” the officials say.

The analysts prepared the report for the Center for Consumer Information and Insurance Oversight, part of the Centers for Medicare & Medicaid Services (CMS).

The CMS insurance oversight office runs the exchange enrollment system, and it oversees ACA exchanges in the states that run their own state-based exchange programs.

The insurance oversight office is now struggling to persuade health insurers to sell plans for 2017 through and state-based exchange systems.

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For a look at two industry reactions to the new CMS analysis, read on:

Marilyn Tavenner (Photo: CMS)

Marilyn Tavenner (Photo: Centers for Medicare & Medicaid Services)

Marilyn Tavenner

Marilyn Tavenner is now the president of America’s Health Insurance Plans, a major trade group for health insurers.

She previously was the head of CMS.

Tavenner did not contradict the new CMS individual health market claim numbers, but, in a statement, she called the CMS assessment of the market “overly optimistic.”

“The reality is that the risk pool has not significantly improved,” Tavenner said in a statement. “That is a serious concern.”

The challenges driving up premiums include problems with the health of exchange plan enrollees at the local level, and problems with enforcing the special enrollment period rules, Tavenner said.

Regulators, exchange managers and insurers developed the ACA enrollment period system, or limits on when people can buy individual health coverage without showing they have what the government classifies as a good reason to be buying coverage, to keep healthy people from seeing the ACA ban on medical underwriting as a chance to wait until they get sick to pay for coverage.

Insurers have complained that enforcement is weak and that, in practice, applicants who come in through the special enrollment period process tend to have very high medical claims.

CMS has said will now require many applicants to document their reasons for requests for open enrollment periods. But CMS has said will let applicants get coverage in force for a few weeks while the applicants are submitting the documents.

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AHIP wants to verify documentation for some types of special period requests, such as requests based on a permanent move of residence or less of access to other major medical coverage, before consumers can enroll in coverage.

Elephant (Photo: Wikimedia Commons)

Jeff Adams says insurers and Centers for Medicare & Medicaid Services analysts may be looking at different legs of the same elephant. (Photo: Wikimedia Commons)

Jeff Adams

Jeff Adams, an independent, Canandaigua, New York-state based health actuary who was once the chief actuary for a Blue Cross and Blue Shield carrier, said he would like to know more about the data and methods the CMS officials used when they prepared their analysis.

But he said he thinks it’s possible that, in spite of widespread insurer complaints that individual health enrollees have been much sicker than insurers had expected, the CMS analysis could be correct about what happened to the overall individual health market population risk level between 2014 and 2015.

“I don’t think the population would be getting worse,” he said in an interview. “It’s possible it might be getting a little better.”

But, even if the underlying health level of enrollees was stable between 2014 and 2015, insurers still face the problem that the initial lack of knowledge about how ACA programs would really work, some insurers’ optimism about the exchange program and regulatory pressure led to serious coverage underpricing in many markets in 2014, Adams said.

The prices insurers filed for 2017 are the first insurers created with access to solid experience data for individual health business written under the ACA rules, he said.

Because of all of those constraints, Adams said, insurers face may make getting prices up to break-even levels difficult even if the CMS officials are correct and average health status of the enrollees is improving.


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