Friday, January 24, 2014

ACA Update

Charles Gaba (@Charles_Gaba on Twitter) is doing a great service for all of us by keeping meticulous track of ACA signups at If you follow Charles on Twitter, you will get regular updates.

QHP means Qualified Health Plan(s), so Private QHP Enrollment is, from the media's perspective, the key number. The original target was just over 7 million, set by the CBO and agreed to by the Administration. This is where the famous 2.7 million young adult (18-34s') target came from: roughly 40% (38.6% exactly) of the uninsured are young adults (18-34s'), so this percentage was selected as the target for this group, i.e., 2.7 million young adults out of an overall goal of 7 million.

The media have latched onto this 40% number as a make-or-break target. Not so. Kaiser did a study and found that even with 25% young adults in the final mix, this would most likely only move premiums up a couple of points for the following year. And in any case, what really matters is what percentage did the insurance companies use in making their pricing decisions. If, for example, insurance companies, on average, estimated young adults to be 25% of the risk pool, then achieving 25% would not cause any premium spike (results to date: 24%).

But here's a question I don't have the answer to: Is the 7 million target for QHP signups on the Exchanges only, or a combination of on and off-Exchange signups? Charles assumes it's the latter, and gives us the 30,000 sliver of off-Exchange QHP sales to add to the 3 million current Exchange total. CBO's Enrollment Chart shows 7 million for Exchanges alone; 9 million for Medicaid; and minus 2 million for the Non-Group market, giving a 14 million reduction in the uninsured in 2014. So there's no way to tell from the CBO chart how many total QHPs are estimated for 2014.

Why does this matter? First, bragging rights. If we use Charles' approach and hit 7 million combined QHP signups, with 1 million coming off-Exchange, did we hit our target or not? Much more important, though, is (and this I do know) the risk pool is based (state-by-state) on the total number of QHPs sold in any particular state, whether sold on or off the Exchange.

I spoke to Larry Levitt at the Kaiser Foundation and asked him how many QHPs are likely to be sold off-Exchange in 2014. He said: 2 million in the first half and 4 million by the end of the year. If Exchanges hit 6-7 million, as now seems quite possible, we still have an estimated 4 million additional people to put into the 2015 risk pool. And all of these will have come from the Non-Group/Individual market, where everyone was carefully screened to weed out likely health risks. 

My conclusion: the 2015 Private QHP risk pool will be well-balanced, and we will (over the full 50 states) see no significant premium increases for next year. Conservatives will be deeply disappointed!

My last forecast was 5 million on the Exchanges, 7.5 million for Medicaid by March 31.

My forecast now: 7 million - Exchanges; 10 million - Medicaid

If we do this, and none of the Medicaid numbers are renewals (Charles is screening them out), and the CBO is right, that 2 million of the Exchange signups come from the Individual market, then the ACA will have reduced the uninsured by 15 million by mid-year, versus the 14 million CBO target. And the CBO target is for all of 2014, not just through 3/31/14.

The ACA ship is gathering momentum. I believe she is unstoppable. Even if we hit the 7 million target, even if premiums stay flat for 2015, and even if the next wave of cancellations (small-group policies for small business) results in only muted outcry, Republicans will not be able, I believe, to acknowledge this. If Democrats are very savvy, and run good, fact-filled campaigns, we could make a dent in the GOP House in November, while we hold the Senate.

Go Blue!!

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