Were 43% of Exchange Enrollees Insured in 2013?
As predicted, people apparently are dropping pre-existing coverage to enroll in the exchanges. Express Scripts reports that 43 percent of the enrollees in the exchange plans that it contracts with were previously enrolled in a 2013 plan that also used Express Scripts. This means that at least 43 percent of exchange enrollees had previous coverage. The actual fraction of those with previous coverage may well be higher given that a one 2013 estimate concluded that Express Scripts controlled about 40 percent of the U.S. pharmacy benefit management market.
As this blog previously reported, Express Scripts also reported that exchange enrollees used 47 percent more specialty medications, drugs that account for more than a quarter of the nation’s spending on prescription drugs. The increased medication use is not surprising given that many states moved the people in their high risk pools into the exchanges.
The Express Scripts analysis was based on a national sample of more than 650,000 pharmacy claims from approximately 423,000 people enrolled in a public health insurance exchange from January 1, 2014 to February 24, 2014.
It would be interesting to analyze the prior coverage status of exchange enrollees over the next few years. This could tell us whether or not enrollees are being dumbed (or jumping) from employee health plans. It would also give analyst an idea if the exchanges are actually covering the uninsured or soaking taxpayers.
As discussed elsewhere on the blog, I have trouble with “uninsured” as a status at a given point in time, because if you have been uninsured for (e.g.) a year you are a bigger social challenge than if you were uninsured for (e.g.) a month and will get a new job next month.
All the surveys that people are talking about are of limited use in sorting the uninsured according to their duration of being uninsured. This Express Scripts survey adds valuable information.
The Pharmacy Benefit Management institute tells us that Express Scripts is the market-leading PBM. However, it still only has 13 percent market share (https://www.pbmi.com/PBMmarketshare1.asp).
So, I would not be surprised to learn that the other 57 percent of ObamcaCare enrollees that now have Express Scripts as PMN had another PBM contracted to another plan before. That is, it looks like the number of ObamaCare enrollees who were truly uninsured before Obamacare is passingly small.
So almost half of the people who enrolled in coverage already had coverage?
Yep. Almost makes you wonder what the point of the whole program was.
To spend as much money as possible? To frustrate those attempting to get insurance?
Kind of seems like it.
“As this blog previously reported, Express Scripts also reported that exchange enrollees used 47 percent more specialty medications, drugs that account for more than a quarter of the nation’s spending on prescription drugs.”
Wonderful. Of course they do.
“As this blog previously reported, Express Scripts also reported that exchange enrollees used 47 percent more specialty medications, drugs that account for more than a quarter of the nation’s spending on prescription drugs.”
Well that makes sense. The people enrolling are the ones who need the services.
isn’t that the problem with the whole system?
You got it. Lots of people want service, but nobody wants to pay for it.
Which just means that everyone pays for it. So in the end, absolutely no one wins.
Yep. Big government at its finest.
so the high cost patients were dumped onto the exchanges, the cost of which to be dispersed over the taxpayers
I have a hard time figuring out what “previously enrolled” means. Are people who were dropped by their insurer in the past year counted? Or only those who actually have coverage at the time the sign up for the new plan? Or something else, perhaps those where covered by any insurance some time in the recent past?
Bart,
Express Scripts is saying that it had paid a claim for the people in its exchange plans before Obamacare began.
This means that the people were insured somehow prior to Obamacare. We don’t know how they ended up in the exchange. Perhaps their state canceled its high risk pool, their employer dropped their mini-med plan, or they found that the subsidized exchange plans were less expensive.
Or, they could have been on Medicaid managed care. The important thing is that they had coverage of some type, and Express Scripts was the PBM.
What an odd little piece of work.
1) An “exchange” plan is one that is available on an exchange. It doesn’t mean it was purchased there. The 47% “previously insured” estimate therefore applies to a population of mixed exchange and non-exchange buyers. (Though I will grant that as the converse is not true – there are off-exchange plans that are not available on-exchange – there is a slight presumption that owners of plans available on-exchange did buy them there).
2) BMore importantly, only people who enrolled in an exchange plan before February 15 could be sampled in this study, and more than half the exchange enrollees selected plans after that date. As everybody knows, the later enrollees skewed younger than the early birds, and common sense says that they were also healthier and less likely to have been insured before. It will be interesting to see how the numbers shift as the report gets updated
I think you are over thinking it. An “exchange plan” surely means it was bought on an exchange. Even if it was not, the effect on the number of insured versus uninsured would be the same.
My point was that there is no way for Express Script to know by looking at a plan if it was bought on an exchange or not.
Imagine, for moment, that all plans sold off-exchange were also sold on-exchange. In that scenario, the data could only support an estimation that at least 40% of all individual market enrollees were insured at some point last year – a very uninteresting point (very few newly insured will have bought off-exchange – the subsidies are crucial for this population).
In many states, insurers created specific plans expressly for the exchanges. When that is the case, Express Scripts likely knows which plans are exchange plans and which are not.
Especially as they have to comply with the formulary limitations specific to each plan.
You are correct – I missed something and overstated my point. Sometimes exchange policies have to meet state-specific requirements that result in the off-exchange versions being slightly different. This was the motivation for the risk-pool rule being changed to refer to “substantially the same” rather than “identical” (Thttp://healthaffairs.org/blog/2014/05/01/implementing-health-reform-a-summary-health-insurance-marketplace-enrollment-report/#comment-622095).
Still, I’d be surprised if much less than ten percent of the plans considered in the Express Script study were off-exchange. That said, I’d also still guess that the percentage “insured” in the next update will be much smaller – say, 20 to 25%.
Just to clarify my last point – no one doubts that a majority of all individual market buyers were insured last year. Where we disagree is in the number of uninsured in the exchange portion of that market only: I believe that roughly 5.5M of the 6.7M total enrolled & paid in the market were uninsured last year. I gather that you put that number very, very low.
I think we are starting to go around in a circle. Nevertheless, if you (arbitrarily but reasonable) define “uninsured” as someone who was uninsured for at least six months in 2013, we can reasonably conclude that his status was due to unemployment or low income, and not a cancellation because his previous plan was due to Obamacare.
Therefore, that person will almost surely become insured as a result of subsidized Obamacare coverage or getting a job with benefits. If the latter, he is not included in Express Scripts’ report. If the former, he may have bought a plan off exchange and be claiming a tax credit (because the Administration made an illegal rule allowing that in the short term) but I suspect that is highly unlikely.
If it is a short-term uninsured who is not claiming a tax credit, he may be more likely to buy off exchange. In which case, for the purpose of determining the net effect of Obamacare on the number of insured, who cares?
Perhaps you are trying to explain that the 6.7 million or so who have paid premiums for exchange coverage is not a good measurement of the net effect of Obamacare on lack of insurance. In which case we agree.
Our disagreement is simple:
You claim that the “number of ObamaCare enrollees who were truly uninsured before Obamacare is passingly small” (< 1M?). I claim it is substantial: ~6M (includes some off-exchange). Net of cancellations etc, my estimate of the effect on the # of uninsured drops by about a 1.5M. Yours presumably drops to about zero – or less.
There will be lots of data over time to assess our predictions: polls, insurance company filings, state insurance reports, HHS reports, federal population surveys (ACS, CPS, NIHS, MEPS) and tidbits like the Express Scripts item reported here.
Excepting the rather odd RAND survey, every piece of data that I've seen supports my view – and even the RAND numbers are closer to mine than yours. Perhaps you can point me to something I may have missed?
My favorite analysis of the RAND survey was done by Avik Roy at Forbes, published online April 9, 2014. He concludes that exchanges enrolled about 1.4 million who were previously uninsured.
A lot of my comments above describe the limits of telephone surveys. I give infinitely more weight to a good source of claims data as an indicator of how many were previously uninsured.
Regarding: “…if you [..] define ‘uninsured’ as someone who was uninsured for at least six months in 2013, we can reasonably conclude that his status was due to unemployment or low income, and not a cancellation because his previous plan was due to Obamacare.”
Two points:
1) You neglected to include those uninsured in 2013 due to medical underwriting issues (ie. pre-existing conditions)
2) I’m pretty sure that the number of people who were uninsured for any part at all of 2013 by virtue of cancellation was zero. The ACA minimum benefits provisions became effective in 2014.
2) I’m pretty sure that that number of people who were uninsured for any part of 2014 by virtue of cancellation, but who later found insurance anywhere, exchange included, was small. Most people who valued health insurance enough to buy in the individual market in the past were unlikely to allow a gap in their coverage if they could possibly help it. The poor functioning of the exchanges, of course, may affected some people.
Actually, that is three points!
If you search the blog for “high risk pools” you will see some entries describing how few people were struggling to get health insurance due to pre-ex. The evidence is the tiny number who took advantage of Obamacare’s federally funded high-risk pools in the years before 2014.
I agree about the 2013 cancellations: They received notices in 2013 but not necessarily cancelled. But we already know that very few people enrolled in Obamacare in the last quarter of 2013. There was a last minute rush in March 2014.
Well, looks like I read too quickly – the current report is already an update over the blog post above: now it reports 60% “uninsured” vs 40% “insured”.
Ken Kelly raises an interesting point. Exchange enrollees who had enrolled by Feb 15 are likely not representative of those currently enrolled. Early adopters are probably older, less healthy and likely poorer than the average.
Older and less healthy yes. Poorer, no – more likely the opposite.