With the third Open Enrollment Period (OEP) having come to a close, the Affordable Care Act (ACA) has cause to celebrate. The Dept. of Health and Human Services (HHS) estimates that 12.7 million Americans signed up for coverage. This number includes beneficiaries from all 50 states and the District of Columbia. And, it falls right within the Obama administration’s earlier enrollment estimates . Additionally, the number of millennials (18-34 year olds) grew over last year, which is welcome news.
But not everyone is happy with the current state of the Obamacare exchanges. Multiple large insurance carriers have experienced heavy financial losses, which they blame on the 2016 exchange plans, and the system, in general. There have been rumblings and reports that they may be forced to leave the ACA’s Marketplace. And while this may simply be normal business dealings, should the carriers leave, consumers could feel the pinch. There may be fewer plans left, while those remaining could skyrocket costs, even as the quality falls.
Sign-ups increasing, but carriers unhappy
Despite the record enrollment, many large health insurers claim that with the way the Marketplace is set up, they’re losing money. For instance, last November, UnitedHealth Group, the nation’s largest insurer, revealed that it was considering leaving the Marketplace. They revealed losses of about $1 billion from their 2015 and 2016 exchange plans. While UnitedHealth Group hasn’t announced its final decision, among the reasons it gave were the flexibility surrounding special enrollment periods (SEPs).
Many big insurers, such as Aetna and Anthem, say that their risk pool is attracting too many older, sicker beneficiaries. This causes their costs to increase, while their profit margins drop. Instead, they prefer younger, healthier members, who typically don’t utilize their coverage as much, if at all. There are also issues with the proposed standardized health plan options, as companies feel that such measures may limit their ability to set prices.
Millennials boosting Obamacare
The government understands the carriers’ concerns. The CMS has already canceled certain SEPs allowing consumers to purchase plans outside of the normal enrollment period. And as Jan. 19, 2016, memo shows, more are planned for elimination.
The agency also announced that this latest OEP saw enrollment of 2.7 million millennials (18-34-years old), compared to 2015’s 2.5 million; 33 percent of these were new consumers. This is the target age group for most insurers, and these figures show that millennials are continuing to purchase coverage. “This risk pool is a better risk pool and will help in the long run,” stated CMS Acting Administrator Andy Slavitt.
However, millennials only make up less than a quarter of the entire Marketplace population. And some don’t want coverage, due to the high deductibles and monthly premiums and smaller provider networks. As a result, some are turning to short-term medical plans, which usually last six or 12 months. These plans may also not be ACA-compliant, as they don’t provide essential health benefits. Regardless, some young consumers prefer to pay the tax penalty for being uninsured, rather than more expensive plan premiums.
The carriers feel that it will be another year or two until the individual marketplaces have stable rates and broader enrollment. But not all carriers are unhappy with the ACA’s current state. The membership of the Connecticut-based health plan ConnectiCare plan grew to about 52,000 people; more than half of the state’s total. According to Michelle Zettergren, ConnectiCare’s senior vice president of sales and marketing, many enrollees switched from other plans. “Unlike the national players, we’re focused solely on the state of Connecticut,” said Zettergren. “We had a mature marketplace prior to ACA, and it continues to be a mature marketplace for us.”
