Monday, April 13, 2015

Obamacare customers "stick with"

Enrollment in private health plans on seems to have been very sticky.  For the 37 states using, the renewal rate for those who were enrolled in plans just prior to the start of open season for 2015 was over 90%..

Last week, Avalere Health published a study of renewal rates that found an average of 79% renewals among existing enrollees in private plans (so-called Qualified Health Plans, or QHPs) on and 65% on the state exchanges. But Avalere tracked attrition from the end of the first open season, in April 2015, until the end of the second one, in March 2015.  The methodology was simple:
Avalere relied on data from the March ASPE Issue Brief [here] on Health Insurance Marketplaces 2015 Open Enrollment Period: March Enrollment Report. To determine the percentages, Avalere used the 2015 enrollment breakouts from the report on the percentage of enrollees who were new or returning enrollees. Then, Avalere used the percentage of returning enrollees to calculate the percentage of 2014 enrollees retained in 2015.
For its 2014 enrollment totals, Avalere used figures that HHS published in May 2014, shortly after the April 15 close of the ACA's (extended) first open season.  But much of the enrollment fall-off after the initial full count last May was immediate, as more than 10% of enrollees in the first open season never their bills. Then there was slow, steady (and quite appropriate) attrition in the remaining months of the off-season. It's worth asking: what was the drop-out rate among those who were enrolled in fall 2014 but declined to renew for 2015?

HHS's estimate for total QHP enrollment in October 2014 was 6.7 million, down from just over 8 million as of May 2014.  In other words, enrollment in October 2014 was about 84% of the total reported in May 2014.

The Avalere report lists 13 states with full-year retention rates over 84% -- that is, with less attrition through March of this year than the overall average as of October 2014.  Kentucky leads the pack at 94.4%, followed by North Dakota at 94.3%, Wyoming at 91.6%, Maine at 89.6%, Arizona at 89.1%, and Pennsylvania at 87.7%.

Given substantial variations in state enrollment patterns, it would be reckless to conclude that any given state has a reported re-enrollment total in excess of its likely enrollment in fall 2014. From May through October, some states had attrition well below the norm; some even had enrollment gains

We know that because several states provided enrollment updates during the off-season. ACA signups guru Charles Gaba kept track and reported results for twelve states in October. Among them was Kentucky, which had essentially no attrition to that point. In May 2014 Kentucky logged 82.747 QHP signups; as of Oct. 15, it reported 82,000. Hence its seemingly incredible 94.4% retention rate as of March 2015, when about 77,621 enrollees from 2014 renewed, does not strain credibility. If the state's attrition through October had matched the national rate, though,  Kentucky would have had just about 69,500 enrollees at that point, rendering it impossible that more than 77,000 could "renew."

Oklahoma is another odd case. From May 2014 to March 2015, retention was 83.8%. But between May 1 and August 15, when Gaba picked up an update, QHP enrollment increased from 69,221 to 73,071.  By March 2015, 58,013 had renewed. That's 83.8% of the May 2014 total -- but just 79.4% of the August total.  What gives, Oklahoma? Why the summer increase and winter drop-off?

To return to the big picture: HHS reports total re-enrollments on at 4.17 million. As of May 2014, enrollment in states that remained on or were added to in 2015 totaled 5.48 million. If 84% of that total remained enrolled by the start of open season in November (and we don't know that -- we only know that 84% of enrollees on all exchanges remained enrolled at that point), that would be 4.61 million. If that total is correct,* then 90% re-enrolled for 2015.

If the renewal rate seems high, it's worth keeping in mind that just under half of re-enrollees took no action and were auto-re-enrolled in their 2014 plans. As in 2014, there will doubtless be significant attrition during the off-season, perhaps including significant numbers of auto-re-enrollees who discover that their premiums have spiked (as they will in many cases, especially if the plan in question costs more than the "benchmark" plan for 2015). Nonetheless, the high retention rate to date does suggest that most private plan enrollees to date have found their coverage "affordable" in the most basic sense.


*  In February, Gaba did a fine-grained count of renewals and drops and came up with a total of 4.46 million 2014 enrollees still enrolled by year's end. That includes 290 thousand who dropped or were dropped from coverage for 2015. We don't know that the number wasn't higher as of October 2014, though.

Related: How red states propped up

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