5 top reasons to relax about the Affordable Care Act enrollment number

Guest post courtesy of  Heather A. McCabe, assistant professor of social work at Indiana University.

Heather McCabe

Heather McCabe

We are nearing the March 31 deadline for people to enroll in insurance through health exchanges. As we do, many interested in this law are waiting to see what the final enrollment numbers will be. We hear words like “death spiral” and worry that health care will be unaffordable and unattainable.

Here are some reasons to rest easy:

  1. The numbers expected for the first years were estimates. We will know better in future years what actual numbers will be based on previous years’ enrollment — but the insurance companies knew this just as the government did. They knew this when they set their rates for this first year.
  2. The numbers do not tell us the mix. In other words, the proportion of high-cost enrollees to low-cost enrollees will have an impact on the future premiums in the program. It will be some time before we know what kind of claims we see by those enrolled and what proportion of enrollees are sicker versus healthier. Though age can be a proxy for costly, the actual mix of sicker versus healthier individuals will be the true driver of premiums.
  3. Kaiser Family Foundation recently completed a study of what would happen if enrollment by the “young invincibles,” those who are young, healthy and low cost, were less than anticipated. The study showed that in the worst case scenario (50 percent less enrollment by this group than anticipated) insurance premiums would raise by approximately 2.4 percent annually. Given the rising premiums over the last decade, a 2.4 percent increase should not bring the market to a screeching halt.
  4. The insurance companies are not depending on marketplaces for their solvency, or even the majority of their business. If there is a rocky start these first few years, they have their traditional markets making up the majority of their business. They also have risk corridors (love them or hate them) to ensure they can stay solvent.
  5. It is going to take time. Regardless of whether enrollment numbers hit 6 million as of March 31, it will take some time for the market to figure out where premiums should be set. This date and these numbers will not be the end game in premiums. In this time of immediate gratification it may be hard to wait and see, but change takes time. And changing a huge system with many competing interests takes a lot of time.

So sit back and relax. We are in this for the long haul. The numbers are but one indicator over time. Let’s talk again in a year or two and see where we are.

Heather McCabe served as a medical social worker at a pediatric tertiary care hospital for several years before returning to school for her law degree.  She also served as the director of the Public Health Law Program  and then executive director for the Hall Center for Law and Health at the IU School of Law – Indianapolis before coming to her current position. Her research is primarily in the areas of public health, health policy, health disparities, health reform, and disability related policy.  She is particularly interested in exploring the effects of multidisciplinary education and collaboration in her work.

 

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