Restating the obvious — the sick get insured first

From MedCity News:

an analysis of the first two months of claims data shows the new enrollees are more likely to use expensive specialty drugs to treat conditions like HIV/AIDS and hepatitis C than those with job-based insurance.

The sample of claims data – considered a preliminary look at whether new enrollees are sicker-than-average  – also found that prescriptions for treating pain, seizures and depression are also proportionally higher in exchange plans, according to Express Scripts, one of the nation’s largest pharmacy benefit management companies.

This is not surprising.  Sicker individuals on average signed up for Exchange policies in October, November, December and the first half of January.  They were the motivated enrollees.  The less motivated enrollees waited until deadline pressure where they would have to spend money for either something (health insurance) or nothing (mandate penalty) forced a decision. 

From a loss management perspective, the relevant question is not whether or not the early enrollee population is sicker than the population that receives insurance through work but whether or not the actual early enrollee population is sicker than projected AND whether or not the late enrollee population is healthy enough to meet projections or slightly healthier than anticipated to cross subsidize the sicker early enrollers.

A population that is sicker than people in work sponsored plans was always anticipated and priced into premiums.  Different companies projected and priced the risk differently, but this was a common core assumption.  Right now the early evidence is showing that most companies got it pretty close.

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12 replies
  1. 1
    WereBear says:

    I have to be one of the people who say “Thank you, Obamacare!” even though I’m employed and have a pretty good network.

    The specialist I need just joined it, and the practice is 2 1/2 hours away.

    And yes, I simply can’t get what I need locally, even though we have a hospital here in town. I know this because the test that finally pinpointed my problem… was the first one the hospital had ever ordered, and they couldn’t even tell me how to perform it, I had to search engine the instructions.

    This is why my GP can’t treat me, this is why there is no one local to treat me, and this is why I have to find someone who can.

  2. 2
    Yatsuno says:

    @WereBear: I am keeping my ortho and my rehab doctor in Seattle even though that’s a four hour drive now. When the difference is quality, you put up with the haul. Not to mention if all goes well I’ll have every other Friday off to schedule things like appointments and such, so that helps.

  3. 3
    gvg says:

    I hope this is stating the obvious but sicker people have trouble getting and holding jobs, especially good jobs with insurance. As a University employee who sometimes reviews academic progress petitions, let me tell you that health can determine if someone can finish school. It doesn’t even have to be the student who is ill to derail academics which have long term impact on future employment opportunities (like jobs with insurance). It can be a family member who is ill. Worry is distracting. Ill family members need looking after and transport to doctors offices which cause loss of work time which can lead to loss of jobs for relatives. Costs can be high even with insurance which usually means longer work hours for somebody and less time to do school work. The whole family is impacted.

  4. 4
    WereBear says:

    @Yatsuno: I’m so pleased to hear your Team Yutsy will still be available to you! Because you have to do it all again, don’t you?

  5. 5
    Luthe says:

    I am one of the motivated enrollees (I had my shit together by mid-October). Of course, this is because SSRIs and therapy are expensive. On the other hand, I’m a healthy twenty-something aside from the crazy, so I am probably paying more into the system than I’m getting out.

  6. 6
    BC says:

    Hoocudanode that there were people who were just waiting for a chance to get affordable insurance – and, who, when they got it, they used it! I am sure there are reporters all over the country trying to wrap their beautiful minds around the fact that there are sick people in this country who needed health insurance. For me, this is what Obamacare success is.

  7. 7
    Richard Mayhew says:

    @Luthe: Actually, since you’re now under community underwriting and are in your mid-twenties, it is extremely likely you are getting way more than paying in.

  8. 8
    🍀 Martin says:

    One of the trends you see in Medicare usage is that the moment people turn 65, they hit the doctor like they’re at an all-you-can-eat buffet. 65 year-olds rack up a doctor visit a month as they work through all of the specialists and conditions they’ve been ignoring or self-treating for the previous few years. As the pool gets older, that falls off, costs stabilize a bit.

    I’d imagine we’re going to see healthcare spending spike here in the first year as all of these uninsured and underinsured get their free preventative care, not because they are sicker, but because they are undertreated. My guess is we won’t see costs settle out for about 3 years or so, because there are still a lot of uninsured to get into the program and the employer mandate hasn’t kicked in yet, so each year there will be a new pool of people hitting the doctor for the first time.

    So the GOP are going to change tactics here and say that ACA is unsustainable financially, that the early spike in costs will persist even past the point we hit steady-state on enrollment, and try to claw back benefits as a result.

  9. 9
    low-tech cyclist says:

    Richard, have you seen Kevin Drum’s post this morning about the number of people insured by their employer increasing by 8 million since last year? I was wondering if you have any insights into this.

  10. 10
    cckids says:

    @🍀 Martin:

    I’d imagine we’re going to see healthcare spending spike here in the first year as all of these uninsured and underinsured get their free preventative care, not because they are sicker, but because they are undertreated.

    Oh, yes. My aunt works on-call for a surgical center (she’s partially retired). She was convinced that she’d be getting fewer to no hours “because of Obamacare, no doctors will take it”. She’s actually having to turn down shifts; they are busier than they’ve been since she started there 18 years ago. The surge started in January.

    Yeah, this was needed. Big time.

  11. 11
    Richard Mayhew says:

    @low-tech cyclist: I’m hesitant to say much without seeing better data as the RAND study had a sample size of 2,500 and the sub-groups had smaller N’s with very large margins of errors. It is not grokking with what I’m seeing, so if it is true and confirmed in the next month or two with follow-up surverys of larger power, this is a BIG FUCKING DEAL. But it is a tentative finding right now.

  12. 12
    StringOnAStick says:

    Now we just need more MD’s to treat all these new “customers”; medical school enrollments are kept artificially low in the US.

    I really have to laugh too; I have a friend who is a radiation oncologist in Canada. He gets 6 weeks of vacation a year, and every 5 years he gets a 3 month sabbatical. Sure, his salary is less than he’d make here, but he gets to have a life! What US doctor gets that kind of time off from their practice? The Canadian system is like a large group practice, so the docs can actually take longer vacations instead of waiting until they retire to take more than a week or two. This guy used to practice in the US too, but the inhumanity of patients being turned away because they couldn’t pay sent him back home to Canada.

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