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Life Health > Health Insurance > Health Insurance

ACA exchanges hungry for off-exchange prospects

By Allison Bell

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Managers of the Affordable Care Act public exchange system are hoping their plans will peel more than 1 million consumers away from off-exchange major medical plans.

Analysts at the Office of the Assistant Secretary for Planning and Evaluation, an arm of the U.S. Department of Health and Human Services, are predicting that the public exchange system will attract about 1 million to 1.2 million new 2017 enrollees who now have individual major medical coverage purchased outside the ACA exchange system.

The HHS analysts included the off-exchange policy replacement forecast in a set of ACA exchange enrollment projections for 2017.

Related: 5 things to know about Centene’s earnings

The open enrollment period for 2017 is set to run from Nov. 1 through Jan. 31. HHS analysts are estimating the exchange system will get exchange plan selection information from 13.8 million people by the end of the open enrollment period.

The analysts are predicting that 9.2 million of the plan selectors will be existing enrollees that the exchange system retains, 3.5 million will be previously uninsured people, and 1.1 million will be people who had off-exchange individual coverage this year. Earlier, analysts at the same HHS office noted in a separate commentary that many people with off-exchange individual coverage could qualify for ACA exchange plan premium tax credits.

Health insurers and managed care companies covered about 7.5 million people through individual off-exchange policies in 2015, according to Portland, Maine-based Mark Farrah Associates.

The firm estimated ACA exchange plans covered about 13 million people in 2015.

If the HHS forecasters are correct about 2017 exchange plan sales, and insurers are now covering about 7.5 million people through off-exchange policies, then the ACA exchange plans could capture about 23 percent of the people with off-exchange individual coverage.

ACA exchange plan managers have focused mainly on helping consumers find the cheapest plans. (Image: Thinkstock)

ACA exchange plan managers have focused mainly on helping consumers find the cheapest plans. (Image: Thinkstock)

A need for safeguards

In the past, consumer groups and state insurance regulators were skeptical of efforts by insurers, and insurance agents and brokers, to replace in-force coverage, especially in the life and annuity markets.

Related: GAMA President Challenges Industry To Stop Rampant Replacement

Regulators have used the term “twisting” to refer to high-pressure efforts to replace in-force coverage from one issuer with in-force coverage from another issuer.

Regulators have acknowledged that replacing an existing policy might be the right thing to do in some cases, but they have emphasized the need for safeguards, in part because of concerns that policyholders might lose hard-to-analyze sources of value, such as a guaranteed right to convert one type of policy to another type, in connection with a shift from one policy to another.

Managers of the HHS HealthCare.gov exchange enrollment and account administration, and of state-based exchange enrollment systems, have started to add tools consumers can use to compare exchange plan out-of-pocket costs and provider networks as well as premiums, but the main focus of HealthCare.gov is on helping consumers find the cheapest plan, and this year, on helping consumers find the cheapest plan within a new standard options plan product category.

Representatives for the Washington-based National Association of Health Underwriters and the Baton Rouge, Louisiana-based Health Agents for America have argued that consumers who buy coverage on the own, without help from a licensed agent or broker, may not always understand whether an exchange plan they are purchasing offers kinds of benefits or provider networks that they expect to get.

Related:

NAIC Considers Annual Market Conduct Statements

Replacement Regulations Spark Agent Concerns

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