More than 8 million Americans selected health plans in public exchanges during the Affordable Care Act's first enrollment period. But how many of them were previously uninsured? And does it matter?
Like other changes related to the ACA, it's not yet clear just how many uninsured Americans took advantage of the new options, but by some estimates, the law is starting to solve the problem and in the process creating a large, if challenging market, for established and new insurance companies.
Out of the 5.4 million individuals who enrolled through the 36 federally-managed exchanges, 5.18 million applied for (but didn't necessarily receive) tax credits and were required to list any current insurance coverage. Eighty-seven percent, or 4.5 million of them, indicated that they did not have coverage at the time of the application.
Largely due to how the question is asked, the responses don't show whether those 4.5 million were previously uninsured for long stretches of their adult life, whether they recently cancelled an individual policy, or, say, were on an employer-sponsored plan pre-recession and now have a different job. And federal health officials cautioned against inferring too much from that 87 percent figure.
But other estimates suggest that a large proportion, if not a majority, of new exchange plan enrollees came from the ranks of the nation's 58 million pre-ACA uninsured.
A national Rand survey in March, before the enrollment surge, estimated that about 35 percent of new exchange plan buyers were previously uninsured.
The Rand survey also estimated that much of the 8.2 million person increase in employer-sponsored insurance between September and March went to previously uninsured Americans, as well as many of newly-insured Medicaid beneficiaries. All in through mid-March, between exchange plans, group coverage and Medicaid, Rand estimated the national uninsurance rate declined from more than 20 percent to just under 16 percent.
Parsing insurer data
From the individual state exchanges and insurers, though, there are still a lot of unknowns.
New York's insurance exchange, NY State of Health, disclosed that 70 percent of the 960,000 New Yorkers who enrolled in either Medicaid and private health plans were uninsured when they applied, although they're not yet breaking that figure down by Medicaid or private plans.
Covered California, the largest state exchange serving the nation's largest state, has not yet estimated how many of the 1.39 million residents who bought private health plans were previously uninsured, and even California's largest for-profit insurer, WellPoint, isn't sure.
"Unfortunately we cannot tell you if a member was previously uninsured or not," WellPoint CFO Wayne DeVeyd said in a conference call with investment analysts probing the company for details on its 600,000 new public exchange plan members.
Aetna, meanwhile, knows that about 20 percent of its new members, including 230,000 from public exchanges, were previous customers. But, "We really don't have a good statistic on whether the balance of those people were insured or uninsured," CFO Shawn Guertin said in a recent conference call.
Insurers may be pleasantly surprised with the number of Americans who turned out for open enrollment -- 22 states exceed projections, according to an Avalere Health analysis -- but it may take a while to accurately code their new members' risks, and there may also be some utilization surprises.
As Cigna CEO David Cordani said in an earnings call, the early wave of exchange plan buyers "was older than our expectations. They bought a bit richer benefit plan than our expectations, silver was still the nucleus, but it's a bit richer benefit plan. And their medical utilization in the first month or so of experience was much higher than any of our book of business norms."
The Philadelphia Inquirer recently profiled such a member: a 57-year-old logger, uninsured since 2009 and suffering from heart problems, but not intending to buy a health plan under a law he fundamentally opposed. With his cardiac health worsening, though, a friend convinced him to buy an exchange policy (a silver PPO from Highmark Blue Cross, at $26 per month after subsidies) and he was able to have valve-replacement surgery only a month after the plan took effect.
Costs from new members with high utilization will be offset through the ACA's risk adjustment programs, thanks in part to the 2.8 million 18- to34-year-olds who purchased exchange plans, about 28 percent of the national exchange risk pool.
Whether the new members are a few years out from employer-sponsored insurance, getting health insurance for the first time in decades, young or old, accurately documenting their risk profile is one of the most important things health plans can be doing.
"In some ways, the worst case scenario for an insurer is to have a bunch of new risky people but not know those people are at risk because they haven't gone to the doctor yet and haven't submitted any claims," as Kate Jordan, an engagement manager at Civis Analytics, said.