UPDATE x2: OK, how many people will HAVE to shop around this fall?

Wed, 08/17/2016 - 4:56pm

UPDATE: Wesley Sanders (via Twitter) pointed out that technically speaking, the headline above isn't quite accurate: In some cases, the enrollees in question will be automatically "mapped" to a different plan if they fail to actively shop around and pick a new policy themselves. So I suppose a more accurate headline would be "How many people will NOT have the same policy as of January 1st no matter what?"

See here for Louise Norris' excellent primer on how "plan mapping" works, when it applies and when it doesn't.

This is the most relevant part for this entry:

Can you be mapped to a new carrier?

The HHS guidelines indicate that an exchange cannot map enrollees to a plan offered by a different carrier. So if your health insurance carrier is exiting the exchange or pulling out of the individual market altogether – as is the case with 12 CO-OPs in November and December – the exchange generally won’t automatically re-enroll you in a similar plan from a different carrier. (New York State of Health made an exception for CO-OP members who lost coverage at the end of November.)

If your carrier is pulling out of the exchange but continuing to offer off-exchange coverage in your area, state regulations on guaranteed renewability will apply; the carrier may be able to auto-renew your coverage outside the exchange (which means you’d lose any premium subsidies and/or cost-sharing subsidies you were receiving in the exchange), or you may be directed to select a new plan during open enrollment.

That last paragraph is actually really important in the case of Aetna, who says that they plan on sticking around off-exchange in most of the areas that they're dropping on-exchange policies...if those enrollees aren't careful, they could end up "keeping their plans" after all...except that they'd suddenly go from paying, say, 20% of the full price to 100%.

UPDATE x2: OK, I've been informed by a source at the HHS Dept. that the above policies are NOT quite accurate after all:

"if an issuer no longer offers a particular plan, we work with states to enroll the consumer in as similar a plan, as best possible. Under some circumstances, this could be with a different issuer. (Of course, consumers still have the option to go back to HealthCare.gov and select a new plan during open enrollment.)

"Highlight #2 is not true."

I apologize for the confusion on this issue; it sounds like this policy may have changed for 2017. Louise assures me that she's updating her primer now.

Every year, both the HHS Dept. as well as myself make a point of strongly encouraging people to shop around, shop around, shop around when enrolling in ACA exchange policies, since doing so can usually result in a better deal being available. This remains the case this year: EVERYONE should shop around and see what's available, even if they end up sticking with the same plan in the end. You never know what you'll find.

However, there's a flip side to this advice: Every year, a substantial portion of current enrollees have no choice but to shop around, for a variety of reasons:

  • In 2013, a couple million people's policies were cancelled for not being ACA-compliant (about 5 million more were given a "transitional" period of up to three years, depending on the state).
  • In 2014, a million or so of those extended "transitional" policies expired. In addition, enrollees in Massachusetts, Maryland, Oregon and Nevada had to manually re-enroll whether they kept the same policy or not as those states switched to brand-new tech platforms.
  • In 2015, a dozen or so ACA-created Co-Ops failed, forcing around 800,000 people to have to shop around for a new carrier. Moda pulled out of a couple of states, Blue Cross dropped out of New Mexico and so on.
  • In 2016, 4 more co-ops have failed, plus the big drop-out announcements from UnitedHealthcare, Humana and Aetna.
  • Other oddball small carriers have either dropped out of various states (Health Choice of Arizona) or gone out of business (WINhealth of Wyoming) over the past 3 years.

In addition, throughout all 3 years, various carriers have dropped some types of policies in given states while retaining others...usually dropping PPOs but keeping HMOs, as Blue Cross did in Texas this year and is doing in Minnesota next year. In these cases, the enrollees may or may not have to switch carriers, but they will have to choose a different plan one way or the other.

Ever since the big Aetna news the other day, several people have asked me for my estimate of just how many people will have to shop around next year. Here's my best attempt to tally them up:

AETNA: Around 600,000

Zach Tracer of Bloomberg News says that as of 6/30/16, Aetna had around 838,000 exchange enrollees in the 15 states they're currently participating in. However, a) they're sticking around in 4 states (Delaware, Iowa, Nebraska and Virginia), and b) that 838,000 figure is bound to drop somewhat by the end of the year anyway due to normal attrition:

a) By my count, those 4 states hold around 55,000 enrollees, though some might be off-exchange only.

b) Last year there were 9.95 million exchange enrollees nationally on 6/30 but only 8.8 million as of 12/31. Assuming a similar 11.5% normal attrition rate, that would bring the total losing their policies down to perhaps 690,000.

ABC News notes that Aetna is dropping out of 70% of their current counties; assuming an equal number of enrollees per county, that would mean roughly 520,000 people by the end of December.

Meanwhile, this U.S. News story by Kimberly Leonard puts the number at 670,000, although it doesn't give a breakout, and presumably doesn't account for attrition. If not, that would be around 590,000.

If you average out these three estimates it comes in at around 600K even.

HUMANA: Around 390,000

As of June 30th, Humana reported 792,000 individual market enrollees, although that includes off-exchange and grandfathered/transitional enrollees. As of 3/31, they had 876,000 indy market enrollees, of which 63% were exchange-based. Assuming that ratio is similar for Q2, that's around 500,000 even. Of those, Humana is dropping out of 88% of the counties they're participating in; assuming an equal number of enrollees per county (again, this is the best I can do), that's around 440,000. Knock 12% off of that to account for normal attrition and that's 390,000 people who will have to shop around whether they want to or not.

UNITED HEALTHCARE: Around 580,000

For UnitedHealthcare, they anticipate only having 650,000 enrolled by December, but are sticking around the exchanges in 4 states (NV, NY, VA and UT). Those 4 states combined have around 71,000 enrollees, so that suggests around 580,000 dropped.

Add all three up and you have around 1.6 million people nationally between these Big Three.

Next, let's add the 4 Co-Ops which went belly up in Connecticut, Illinois, Oregon and Ohio. If you add all 4 up, you get a total of around 131,000 people in both the individual and group markets combined who will have to switch to a new carrier (or their employers will, anyway). Two of the co-ops have already cut off coverage, however, so by the time open enrollment rolls around, presumably those enrollees will mostly be settled into a new plan anyway (which hopefully isn't also being dropped in January). I'm not sure whether to include those or not, but will do so for now. With attrition, that's about 115,000.

Co-Ops: Around 115,000

There’s also assorted smaller carriers dropping out of states like Moda in Alaska (14K), Health Choice in Arizona (900 people) and so on. Let's call it an even 85,000 nationally just to round up the co-op number.

That brings the grand total to roughly 1.8 million people.

Finally, as I noted at the top, Blue Cross Blue Shield of Minnesota is dropping PPOs for 103,000 enrollees (20K on exchange, 83K off-exchange), but is keeping BluePlus HMOs (13,000 current enrollees). I'm assuming another hundred thousand or so people will find themselves in this situation via other carriers, so let's round everything off at an even 2 million people who will have to shop around whether they want to or not due to the participating carrier situation continuing to jump around for 2017. Assuming around 9.6 million exchange enrollees are still effectuated as of December, that's roughly 21%.

UPDATE 08/29/16: OK, I've decided to go back and see if I can update this some more. In addition to the 1.69 million estimate from the Big 3 + the 4 co-ops, we can also add the following (thanks to Louise Norris for the assist on some of these):

...for a total of at least 198,000 people, plus unknown numbers from 6 of the carriers listed above. That's 1.9 million+, or again likely around 2 million people, give or take.

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