Adverse Selection Got Worse as Obamacare’s Open Enrollment Progressed
New data from Express Scripts, a leading pharmacy-benefits manager (PBM) indicates that adverse selection in Obamacare exchanges actually got worse as open enrollment reached its hard finish in mid-April. As a PBM, Express Scripts has the best data on beneficiaries’ medical costs. Pharmacy claims are adjudicated immediately, whereas other claims can take weeks or months to adjudicate. We previously discussed Express Scripts’ study of pharmacy claims for the exchanges’ early sign-ups. These beneficiaries had specialty pharma claims 47 percent higher than the commercially insured population, which led to the conclusion that they were much, much sicker than expected.
The new release covers data for everyone who has signed up for coverage in Obamacare’s exchanges. There has been a lot of happy talk in the media that the huge sales and marketing surge in March (funded by taxpayers) likely led more healthy people to sign up at the end of open enrollment. In the most general sense, this is what happened, according to the new data. The later sign-ups were younger and in better shape when we consider only the more common conditions that are increasingly affecting our society, as shown in the graph:
However, the later sign-ups look to be in much worse shape with respect to very expensive conditions that are not so widespread:
Exchange enrollees fill 59% more prescriptions for specialty medications than other insured individuals. This disparity is especially pronounced in Exchange enrollees ages 18 to 34, who fill twice as many specialty medications as similarly aged individuals in traditional health plans.
Nearly 3 out of 5 specialty prescriptions filled by Exchange members are for HIV medication.
The younger adults are even sicker, versus their peers, than the middle-aged ones. Further, the 59 percent figure is for all Obamacare beneficiaries. It is an average of the earlier 47 percent figure and an undisclosed figure for later beneficiaries that must be significantly higher than 59 percent. For example, if half the beneficiaries signed up before March 1 and half after, then the 59 percent figure is an average of 47 percent for early beneficiaries and a whopping 71 percent for later ones.
This is really bad news for the risk pool in the exchanges, and gives Congress further impetus to maintain strict oversight of the unlimited taxpayer “bailout” that Obamacare offers to insurers which lose money from participating in it.
John:
There is a crying need for a “chart book” with information like this for use of anybody trying to track Obamacare’s effect. We get a single topic chart, but don’t have a set of related charts showing enrollment trends, utilization trends, premium trends and so on. Very important, as the people in the press who write about healthcare do not go to the trouble of finding out facts like this, so they persist in their happy talk about how many total enrollees there are.
Cheers…
Wanda J.
Why trust data provided by express scripts? Their objective is to corner the specialty market by mandating mandatory mail. They keep talking with politicians about amazon and how wonderful and pro competitive it is that people can purchase magazines and books at a book store or online. But they fail to mention that nobody uses a Book Benefit Manager(BBM) and that nobody is forced to purchase books online. Express Scripts claim to fame is that they are great at mass producing health care targeted towards the average condition (they always talk about the benefits to the plan). The reason their business model has to be mandated is because nobody wants mass produced health care. People want personalized health care targeted towards their specific health care needs. Specialty medications is all about personalized health care. It would be truly insane to allow express scripts to mandate forced mail for specialty drugs.