A rating analyst is wondering whether the public health insurance exchange plan enrollment picture could be worse than it looks — and how that is negatively affecting carriers.
Moody's report author Steve Zaharuk wrote about private exchange qualified health plan demographics risk in a comment on the QHP enrollment data that the U.S. Department of Health and Human Services released Monday.
Other analysts have noted that only 24 percent of the QHP enrollees are ages 18 to 34. HHS has hoped it could keep QHP claim costs down by having young adults make up as much as 40 percent of the risk pool.
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"For health insurers, a risk pool consisting of a higher-than-expected mix of older individuals would create challenges resulting not only in higher medical costs and downward earnings pressure in 2014, but also upward pressure for premiums in 2015," Zaharuk wrote.
Other analysts have suggested that one problem is the definition HHS has used of "enrollment."
HHS is counting consumers as QHP enrollees if the consumers have selected specific QHPs. The due dates for premium payments range from Jan. 10 in some states to Jan. 31 in others, and HHS is not yet saying how many consumers have actually paid for QHP coverage.
Zaharuk, a senior vice president at Moody's Investors Service, says the enrollment report raises questions about the so-called "young invincibles" who have signed up for QHP coverage.
One challenge is that the young adults who have signed up for QHP coverage may be the least healthy people in their age group, Zaharuk wrote.
Another challenge is that a high percentage of the young adult enrollees could end up canceling their coverage after a few months, Zaharuk said.
"The probability of cancellation may be higher for those who purchased a policy as a result of a marketing push rather than a perceived need," Zaharuk said.
The young adults might start out recognizing the need for health coverage, but, if they don't actually use any medical care, they may have second thoughts, Zaharuk said.
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Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
