Key Beneficiary Pool Factors
While noting there will be important circumstantial factors to consider from state to state, Tomczyk said "you can count on one hand" the factors that will determine 80 percent of the risks insurers face in the 2014 pool of exchange beneficiaries:
The well-established correlation between higher age and higher healthcare costs means that in states where the exchange beneficiary population is skewed to older individuals, insurers will face higher risk of costly claims.
- Metal Mix
There is a presumption that older individuals and people with chronic diseases will pick the most comprehensive Platinum plans to avoid annual out-of-pocket expenses of more than $4,000 in many bronze plans. "For a person in poor health, they're better off buying the Platinum," Tomczyk said. "In general, the people who enroll in Bronze will be healthier."
- Medicaid Expansion
About half of the states have expanded Medicaid to income-eligible adults under the age of 65. Presuming low-income individuals are at higher risk of chronic disease and other costly conditions, providing medical coverage through existing state Medicaid programs will divert some of the least healthy individuals entering the health insurance market away from the exchanges. A twist will come in 2015 and beyond, when several states are set to expand Medicaid through the exchanges rather than through existing state Medicaid programs.
- Pent Up Demand
In the first year of enrollment in the exchanges, there is an expectation that individuals with pre-existing conditions who could not get insurance before federally driven healthcare reform will be among the first to enroll. While nailing down the numbers will be difficult, Tomczyk said the previously uninsured will fall into two categories: those who were young, healthy and saw buying insurance as an opportunity; and those with costly pre-existing conditions. "This is the data, [that] as it starts emerging, becomes very helpful," she said.
- Claims Experience
"With only three months of claims, you can get a pretty good idea of people's risk score for the year," Tomczyk said. "We're going to start looking at our clients' data."