What can hospitals expect from the Affordable Care Act's second open enrollment period that began Nov. 15? Some experts sound a general cautionary note.
"My sense is so far, so good," Urban Institute's Stan Dorn tells Healthcare Dive. "It seems to be running smoothly as of Day 3, but that doesn't tell you how the story will end."
This is what we can glean so far: The 37 federally run state health insurance exchanges launched Nov. 15 with few glitches, giving most users a smooth experience, in stark contrast to a problematic roll-out a year ago. Exchanges run by 13 states and the District of Columbia also reportedly functioned well, in general, over the weekend.
Nationwide, more than 100,000 people signed up for exchange plans Saturday, HHS said. And 1.2 million people had explored plan options using a new window shopping tool in advance.
Earlier last week, HHS projected that a total of 9 million to 9.9 million will be enrolled in exchange plans by the end of 2015, a forecast well below the 13 million projected by the Congressional Budget Office in April. Overall, HHS said 7.1 million people had exchange coverage as of Oct. 15.
A major theme this fall is retention: getting those people already insured through exchanges to renew coverage, either keeping existing plans or shopping for a better deal. But there is also a push to attract more than 20 million uninsured Americans eligible for coverage a year ago who didn't enroll in plans.
Success will depend on the plan options available. According to various analyses, 2015 premiums will vary significantly from state to state. But for the coming year, many people qualify for federal subsidies keeping their monthly insurance premiums well below $100, Kaiser Health News reported.
Yet KHN cited continuing uncertainties in the enrollment process, including how a confused, largely-uninformed public will respond to options; a shorter enrollment period (people must enroll by Dec. 15 for coverage to begin in January, although enrollment won't officially end until Feb. 15); and premium hikes that many of the people buying coverage a year ago will face unless they shop around.
Dorn, senior fellow at the Washington, DC-based Urban Institute who has worked on healthcare issues since the mid-1980s at the state and federal level, worries that "big bumps are likely to occur in 2015" for two reasons.
First, he says, consumers who don't change plans may be surprised in January to see their premium costs increase, and they may drop coverage at that point, he says. Also, he says, in late January/early February, people claiming advance premium tax credits for 2014 exchange coverage may find they over-claimed credits (due to inaccurate annual income estimates) and they may owe money to the federal government, which may lead them, too, to exit from plans.
Moreover, Dorn worries that much of the 2015 enrollment period is during the holiday season, "while people are anxious about finances and less likely to make a commitment to monthly health premiums."
How does all of this translate for hospitals? Does the smoother start bode well? What lessons have—or haven't—been learned from enrollment a year ago? Experts say:
More people getting covered will make (some) hospitals better off
"In the short-term, in the states that do Medicaid expansion, the hospitals will be fine. There will probably be more people covered [by commercial health insurance or Medicaid] by the end of the OEP, so hospitals will be a little better off than they are today—but not hugely so," Dorn says. "And in states not expanding Medicaid, there will continue to be mediocre to bad times for hospitals."
Dorn explains the big difference between coverage from Medicaid and from private, commercial exchange plans is that Medicaid is retroactive and can cover the bill for uninsured eligibles entering the hospital; but an uninsured person's commercial coverage won't start until the first day of the following month or beyond. "So for hospitals, it's really important that people sign up for coverage in advance" of hospitalization, he says.
If sicker people opt for commercial plans in 2015, that is even better
John McCracken, PhD, clinical professor of healthcare management at the University of Texas at Dallas, sees it in a different way. By and large, Medicaid doesn't cover the cost if hospital care, he says. So hospitals anticipate that relatively sick people with several co-morbidities, whose annual household incomes are above 138% of the federal poverty level, will sign up for commercial insurance. (Nobody knows how many people fall into this category, he notes.)
"Attracting people to commercial plans who would not otherwise have commercial insurance—that's what you want," McCracken says, although he adds that getting the Medicaid rate from low-income Americans covered through the ACA's Medicaid expansion, instead of charity care, "is useful, too."
McCracken says there are so many pressures coming to bear on hospitals that it is "virtually impossible to disentangle them." He describes a complex environment of health system consolidations, affiliations of physicians and hospitals, and penalties starting to kick in for hospitals failing to meet federal quality reporting requirements and meaningful use requirements under the HITECH Act.
"There are so many factors in play right now that it's impossible to isolate the impact of the second open enrollment period," he says.
More people choosing richer plans will help rural hospitals
Federal data show that more than 300 insurers will offer exchange plans for 2015, up about 25% from this year, but Avalere Health reports that there are still rural areas where there is a dearth of plans.
The underlying question is whether exchanges are working in rural areas, says Brock Slabach, senior vice president at the National Rural Health Association. Fully 58% of rural US counties only had one or two exchange plan options available for 2014, he says, and nearly one in four only had one option.
Slabach describes layers of issues. Less competition likelier means higher rates, he says. Also, rural areas need better outreach and enrollment efforts to entice people to sign up for exchange plans, he says, and yet he doesn't think the dynamics have changed considerably since last year. And insurers continue to form so-called "narrow networks" for exchange plans that often exclude rural providers.
Even if rural providers are included in exchange plans' networks, Slabach says, "What you find is a lot of rural providers are providing care on the first $2,000 of coverage...and can't collect on the plans the patients choose." If most newly insured select bronze and silver plans, local providers must explain that consumers must pay coinsurance and deductibles—and some may not be able to pay after-the-fact.
"We're hoping there will be more insured picking better plans—meaning gold plans, for example—because then there will be less in the way of coinsurance and deductibles that the patient has to pay," Slabach says, "And the provider then is at less risk for bad debt."