HealthSherpa Sees Strong Individual Major Medical Activity

The head of HealthSherpa, a web broker and insurance enrollment services company, says sales of individual major medical policies for 2019 look great to him.

George Kalogeropoulos, HealthSherpa’s chief executive officer, says in a recent commentary that good rates and strong consumer demand helped the company generate strong gains in Affordable Care Act public exchange plan enrollment activity for the first week of the open enrollment period for 2019 coverage.

“More than 75% of HealthSherpa enrollees have a monthly premium, after subsidy, of less than $75,” Kalogeropoulos says.

HealthSherpa helps other brokers with public exchange plan enrollment, as well as selling exchange plans directly, and about 28,000 brokers are using the company with help with ACA exchange plan enrollment this year.

(Related: HealthCare.gov Gets Off to a Slow Start)

The 2019 open enrollment period started Nov. 1 in most of the country and is set to run until Dec. 15 in most of the country.

HealthSherpa — which is formally known as Geozoning Inc. — says its first-week enrollment volume increased to 32,889, up 23% from the total for the comparable period a year earlier.

The company accounted for about 8.8% as many plan selections as the federal government’s HealthCare.gov ACA exchange enrollment and account

HealthSherpa averaged about 1.4 people per application, compared with about 2.0 people per application at HealthCare.gov.

The median list price of the coverage sold has decreased 6%, to about $888 per month.

For applicants who qualify for the ACA premium tax credit subsidy, the average “net premium” — or full premium minus the subsidy amount — has fallen 35%, to about $47 per month.

What HealthCare.gov Is Seeing

HealthCare.gov enrollment activity was lower in the second week of the 2019 open enrollment period than it was in the second week of the 2018 open enrollment period, but the second week looked a lot better than the first week.

In the first, short week, the average daily number of applicants selecting plans through HealthCare.gov was down 18%, and the total number of people on track to get covered was down 21%.

In the second week, the number of applicants selecting plans fell 8.2%, year-over-year, to 876,788.

What Is an ACA Public exchange?

Drafters of the Affordable Care Act wanted to create a family of “health insurance exchanges,” or web-based supermarkets for health coverage.

An ACA public exchange provides tax credit subsidies that people can use to pay for health insurance from private health insurers.

The Centers for Medicare and Medicaid Services (CMS) — an arm of the U.S. Department of Health and Human Services (HHS) — set up HealthCare.gov to provide or administer ACA exchange programs in states that are unwilling or unable to run their own exchange services.

For 2019, HealthCare.gov is providing exchange plan enrollment services in 39 states.

HealthCare.gov and other public exchange programs often talk about “enrollment activity,” rather than coverage sales, because, for many applicants, the premium for the first month is not yet due.

Many exchange programs count a transaction as a sale only many the application has paid the premium for coverage for at least one month.

Exchange programs’ enrollment “activity” figures may include both people who have already paid for at least one month of coverage and people who have selected plans but have not yet paid for the coverage. In the past, public exchange programs have reported that, in the past, roughly 85% of the people who selected ACA public exchange plans “effectuated” the plans by making at least one premium payments.

What is an ‘Open Enrollment Period’?

The ACA blocks health insurers from considering personal health factors other than age and location when issuing coverage, and personal health factors other than age, location and tobacco use when pricing coverage.

Regulators, insurers and ACA exchange programs have created an “open enrollment period” system, or limits on when people can buy individual major medical coverage without showing they have a good excuse to be doing so, to try to scare healthy people away from waiting until they get sick to pay for coverage.

To buy individual major medical coverage outside of the annual open enrollment, consumers must show they qualify to apply for coverage through a “special enrollment period.”

Consumers can buy many other types of health insurance products that fall outside the scope of the ACA major medical insurance rules, such as short-term health insurance, at any time of the year.

— Read ACA Public Exchanges Lurch Back Open, on ThinkAdvisor.

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