Several million young people purchasing subsidized exchange plans was greated as a positive development for all involved. But being young does not mean being free from chronic or acute illness, as early data on one insurer's new enrollees shows.
Blue Cross and Blue Shield of North Carolina garnered 232,000 members through the state's federally-managed exchange, about 70 percent of whom were not BCBSNC customers in 2013. That 232,000 is about two-thirds of the entire state's exchange enrollment and continues the company's dominant share, with more than 70 percent in the pre-ACA individual market.
But the new membership is skewing older and, even among the younger cohorts, appearing to be sicker-than-average, the company said in an overview of its enrollment
Of those 232,000, 25 percent are between the ages of 18 and 34 and 7 percent are kids younger than 18, while 40 percent are ages 34-54 and 29 percent are 55-plus.
That's a bit less than the 28 percent of 18-34-year-olds and 22 percent of 0-17-year-olds that BCBSNC was expecting, and it could pose some challenges, the company said.
"Early self-reported data indicates that BCBSNC's young ACA customers (ages 18-34) are less healthy and seeking more medical treatment than we typically see in this age group," the company said. The new individual customers who completed health assessments are also showing a higher percentage of chronic conditions like diabetes, depression and asthma.
The trends may be similar at other large insurers around the country. While BCBSNC may have been expecting 50 percent of enrollees to be kids or young adults and other insurers may been hoping for similar proportions, the new populations of insurance customers were always expected to have greater-than-average health needs and bring new waves of utilization.
"We did not expect for it to be profitable in the first year," as Cigna CEO David Cordani said of the public exchanges in a recent earnings call.
Pressure on premiums
For BCBSNC, though, having a lot of exposure with so many new exchange members may put upward pressure on future premiums.
"The frequency and types of care ACA customers receive and the conditions for which they are being treated are key factors that will determine future premiums," and "Some new customers may use their benefits early and then quickly drop coverage," the company said in a media brief.
The good news is BCBSNC is finding out about high-risk members early on. Like other insurers, BCBSNC has an incentive program for new members, offering individual plan members a $50 gift certificate to complete a health risk assessment and another $50 later for participating in a wellness program.
Now the insurer can start working on outreach for preventive and disease management services and comprehensively assign risk profiles -- because the Affordable Care Act's risk adjustment program "only works for an insurer if you have your risk coded," as Kate Jordan, an engagement manager at Civis Analytics, put it.
One "worst case scenario" 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," Jordan said in a recent interview.