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ACA Enrollees Getting Sicker, More Expensive to Insure
A recent report from the Society of Actuaries revealed that individuals enrolled in Affordable Care Act (ACA) plans have increased risk scores, indicating that they may be getting sick and therefore more expensive to insure.
“Evaluating the risk of a population is critical for designing programs to achieve the Triple Aim of improving patient experience, care and cost in the insured population,” Rebecca Owen, FSA, MAAA, health research actuary for the Society of Actuaries, said in a statement. “That is why the [Society of Actuaries] will continue to examine CCIIO data as more becomes available, so we can help actuaries understand the health of a population, identify areas where there are clear needs for effective solutions to delivery, and uncover efficiency issues that extend beyond a single health plan.”
The investigators analyzed data from the Center for Consumer Information and Insurance Oversight’s reinsurance payments, risk scores, and risk adjustment transfer data to identify ACA plans purchased between 2014 and 2015. They calculated risk scores — the measurement of how sick a given patient is — using an enrollee’s age, sex, and health diagnoses.
According to the analysis, overall risk scores for enrollees participating in the ACA increased by 5% between 2014 and 2015. The investigators noted that this increase may be due to the identification of unknown health conditions through more detailed coding. They also stated that the increased risk pool may be a more accurate representation of the actual public health, garnered through increased coverage availability.
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Results from the report also showed that risk scores varied widely across the US. For example, in Alabama, risk scores increased by 17.3%, compared with a decrease of 8.4% in Nevada.
The investigators noted that increased risk scores indicate an unhealthy insurance market, which can lead to rising premiums ultimately pushing healthy people out of the market.
Comparatively, an analysis released by the Centers for Medicare and Medicaid Services indicated no rise in medical spending among marketplace enrollees between 2014 and 2015, based on patient claims. During the same time period, per person spending in the rest of the private marketplace rose by 3%, respectively.
According to the Society of Actuaries’ report, the risk adjustment program is too immature to conclude the future of the risk pools or ACA marketplaces due to several large structural changes that will continually shift the risk pools–changes include the new risk adjustment model, full incorporation of ICD10, phasing out traditional plans, and tighter enrollment periods.
“These scores will help us to understand the health of the population, identify areas where there are clear needs for effective solutions to delivery, and highlight efficiency issues that extend beyond a single health plan,” investigators wrote in the report. “[However,] the program is still too immature and this material too scant to draw conclusive inferences about the future of the pool or the marketplaces.” —Julie Gould
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