Some Important Notes Regarding Today's HC.gov Announcements
- As noted ad infinitum, the 462K QHPs selected (aka "total" enrollments) do not mean paid enrollments. As I've noted many, many times before, the first premium payments for January aren't even due for a month and a half and even then, many insurance companies allow a grace period. Most people don't pay their cable or electric bill until just before it's due, so for the love of God, don't start with the "But how many have PAID???" nonsense until around mid-January (and even then, that will only apply to those whose policies start on January 1st. Don't start huffing & puffing about 1st premium payment rates for the total 2/15/15 number until at least March 15th or so, m'kay???)
- Also on the subject of Paid QHPs: The Graph has two sections: Total and Paid. The fact that the Paid number is very close to the Total does not mean that I'm saying that many people have paid already, it means that based on a mountain of evidence from last year, I'm quite confident that between 85 - 90% (roughly 88% overall) of all enrollees will eventually pay at least their first month's premium.
- Final payment note: Based on the 2014 trends, it looks like roughly 88% of total enrollees pay their first premium. After open enrollment ended, around 9,000 people per day were still being added to the total, while around 11,000 per day were being dropped from the total due to life changes, failure to pay, immigrant/citizenship data problems and so forth. Assuming the same holds true in 2015, then assuming my estimates prove correct, the numbers should end up something like:
- 12.0 million total enrollments by 2/15/15
- 10.6 million of those pay at least their first month's premium
- another 2.4 million should be added via qualifying life events by next November
- of those, around 2.1 million will pay at least their first month's premium as well
- that would mean around 14.4 million total enrollments by the end of 2015, of which around 12.7 million should pay their first premium
- however, 2.5 - 3 million will likely drop (or be dropped from) their coverage by a year from now, which would leave roughly 10.0 million still enrolled by the end of next year.
Again, these are all sheer speculation. The total could be different; the payment rate could be different; the off-season additions could be different; the number who drop their policies could be different; and the number who get dropped could be different.
Case in point: This year around 112,000 people were dropped due to immigration/citizenship data discrepancy problems. Hopefully in 2015 the databases and process for verifying legal status will be streamlined and more up to date, which should mean fewer dropped later in the year.
- I just got off the phone with Dan Mangan of CNBC, and we discussed whether the fact that the new enrollments vs. renewed enrollments being roughly 50/50 so far is a good or bad thing. I could go either way on this, really. Assuming 610,000 total in the first week, further assuming around 890,000 total as of today and further yet assuming that the 50/50 ratio held true for most of the state exchanges as well as the federal exchange, this suggests that roughly 440,000 people have renewed their existing policies and another 440,000 or so have added themselves to the tally.
So, would it be "better" to have, say, a 90/10 ratio at this point, or a 10/90 ratio between renewals & new additions? Well...
- There are around 6.7 million current enrollees nationally. If these people do nothing, one of three things will happen:
- Most people will be auto-renewed to their existing policy, which is good...except that some of their tax credits will change, which could be good or could be bad, since most people don't understand how the tax credit calculations work. In short, even if nothing has changed at their end (income, dependents, etc.), they could see their tax credits increase or decrease by substantial amounts.
- In Maryland, they'll be auto-renewed to their existing policy...except without any tax credits, even if they qualify for them, which will understandably upset people.
- In Minnesota, if they're enrolled through PreferredOne, they'll be auto-renewed on the same policy...but will not only lose their tax credits, they won't even be enrolled via the MNsure exchange at all anymore.
- In Idaho, they'll be auto-renewed to their existing policy...except that the exchange has warned that some of the data may not have transferred over from HC.gov accurately, which means there could be a miscalculation on their premium or tax credits.
- Finally, in Massachusetts, Nevada and Oregon, they'll lose their policies completely, because the current data couldn't be transferred over to the new platform at all.
In other words, in my opinion, the more people manually, actively renew or re-enroll the better. That way they won't be in for a rude awakening when that first premium bill is sent--or at tax time, assuming they aren't set up for the credits to be applied monthly.
So, in that sense, it would be better to have more people renew/re-enroll early.
On the other hand, it's also very heartening to see that at least 220,000 (and more likely double that, around 440,000) people who are brand-new to the ACA exchanges have already chosen to jump in for Year Two. This suggests that the 8.02 million who enrolled as of last April (and the 6.7 million who are still enrolled as of now) is not the "ceiling" or "cap" whatsoever. After all, the Kaiser Family Foundation estimates that the total pool of potential ACA exchange QHP enrollees is over 28 million people. No one is expecting it to get that high, of course (even the CBO isn't projecting more than 25 million at most, and they aren't expecting that for several more years), but this at least demonstrates that there's a substantial number of people who missed the cut last year and want in this time around.
So, all that being said, I guess a 48 new/52 renewal split for the first week is probably just fine.
- Another note on the New-vs-Renewal number: From the actual press release:
New Consumers: New consumers are those consumers who are selecting a plan for the first time or whose plan selection in 2014 was terminated, because, for example, they failed to pay their premium or gained coverage through employer-sponsored insurance. In addition, because Oregon and Nevada consumers now use the Federally Facilitated Marketplace platform, they are considered new enrollments.
That's an important twist, which also makes it a bit futile to try and parse out the new/renewal percentages. For the record, as of early November, Oregon had roughly 77,000 people enrolled for 2014 and Nevada had roughly 32,000 as of mid-October, so that's up to 109,000 people who could theoretically be considered "new" enrollees even though they're already on ACA exchange coverage right now.
- The Biggest Question that I've been asked so far today is whether today's news changes my projection of 12.0 million total (10.6 million paid) by 2/15/15 or not. The answer is, no. I didn't drop it when the #DentalGate story broke last week (reducing the number of potential renewals by 393,000), and I'm not raising it this week due to the HC.gov data. That doesn't mean that I won't change it up (or down) in the future, but for the moment my targets are all still the same:
- 7 million QHPs as of 12/15/14
- 8 million QHPs as of 01/15/15
- 12 million QHPs as of 02/15/15 (of which I expect 10.6 million to pay their first premium)
In any event, I've updated The Graph, and the numbers are now large enough to actually start to see the curve. I've left my prior projection line so you can see where I thought it was curving for the moment.