Insurers Say Costs Are Climbing as More Enroll Past Health Act Deadline

By ROBERT PEAR of the NY Times.

"Eager to maximize coverage under the Affordable Care Act, the Obama administration has allowed large numbers of people to sign up for insurance after the deadlines in the last two years, destabilizing insurance markets and driving up premiums, health insurance companies say.

The administration has created more than 30 “special enrollment” categories and sent emails to millions of Americans last year urging them to see if they might be able to sign up after the annual open enrollment deadline. But, insurers and state officials said, the federal government did little to verify whether late arrivals were eligible.

That has allowed people to wait until they become ill or need medical services to sign up, driving up costs broadly, insurers have told federal health officials.

“Individuals enrolled through special enrollment periods are utilizing up to 55 percent more services than their open enrollment counterparts” who sign up in the regular period, the Blue Cross and Blue Shield Association, whose local member companies operate in every state, told the administration.

In a notice published recently in the Federal Register, the administration said it had “heard concerns that these special enrollment periods may be subject to abuse,” and asked for evidence. The insurance companies obliged.

“Many individuals have no incentive to enroll in coverage during open enrollment, but can wait until they are sick or need services before enrolling and drop coverage immediately after receiving services, making the annual open enrollment period meaningless,” Steven B. Kelmar, an executive vice president of Aetna, said in a letter to Sylvia Mathews Burwell, the secretary of health and human services.

A quarter of the applications that Aetna received in the health law’s public insurance marketplace last year came through special enrollment periods, he said."

"Insurers always knew that consumers would come and go for various reasons, but they have been surprised at the amount of turnover.

“On average,” Aetna said, “special enrollment period enrollees stay with us for less than four months, while enrollees who come to us during the annual open enrollment period maintain their coverage on average for eight to nine months.”

Daniel J. Schumacher, the chief financial officer of UnitedHealthcare, the insurance unit of UnitedHealth Group, said more than 20 percent of its marketplace customers signed up after open enrollment ended last year. And they used 20 percent more health care than people who signed up before the deadline, he said.

The National Association of Insurance Commissioners, representing state officials, is troubled by the trend.

“State regulators are concerned that consumers are not required to provide documentation to substantiate their eligibility for a special enrollment period,” the association said in a letter to the federal Department of Health and Human Services. “We know of many cases where individuals with serious medical conditions purchased coverage midyear by simply checking the right box or using the right language, and their eligibility was not questioned.”

"Even companies that strongly support the Affordable Care Act say officials need to do more to check eligibility.

Anthony A. Barrueta, a senior vice president at Kaiser Permanente, a large health plan, said the potential for misuse of special enrollment periods “poses a significant threat to the affordability of coverage, and to the viability” of federal and state exchanges."

See also Gaming of Obamacare Poses a Fatal Threat by Megan McArdle.