Nevada’s open enrollment experiment

Limited open enrollment is a common risk pool management technique.  It is designed to avoid people from not paying for insurance until after they either get hit with a bus or are told that they have a cancer diagnosis.  Large commercial groups use limited open enrollment, small commercial groups use limited open enrollment, Medicare Part D and Medicare Advantage uses limited open enrollment.  The Exchanges use limited open enrollment.  Limited open enrollment combined with a mandate is designed to force the currently healthy into the insurance pool.  This is fairly simple health design. It is not the only technique to force the healthy and usually the young in the pool.  Another is massive subsidization so that premiums are dirt cheap.  This is a technique commonly used in large groups where the employers are picking up 90% to 95% of the cost.  Another method is a late enrollment penalty.  Medicare uses fairly signifcant late enrollment penalties to make sure it hoovers up almost all the 65 year olds in the country in a very short time period. 

There are a lot of ways to skin the risk pool management cat.  Nevada is experimenting with continual open enrollment but a ninety day wait period outside of the normal open enrollment period. 

Insurers that sell individual plans have to offer insurance to all comers during an annual open enrollment period, which this year ended for most people on March 31. However, the health law allows insurers to sell individual plans on the exchange outside the regular open enrollment if they wish to do so, as long as they don’t discriminate against people who are sick.

Health policy analysts say they don’t expect insurers to take advantage of the extra selling opportunity often. “The assumption is that no insurance company would do that because they’d just open themselves up to too much adverse selection,” says Sabrina Corlette, project director at the Georgetown University Center on Health Insurance Reforms.

Still, at least one state is embracing the option. Under a Nevada law that took effect in January, any insurer that sells individual health plans outside the state’s health insurance exchange has to offer those plans year round. To discourage people from waiting until they get sick to buy a plan, insurers can require a waiting period of up to 90 days for coverage to take effect.

This is interesting in a good way.  I don’t think there will be a lot of sales in future years as people whose life situations have signficant changes will think to go on the Exchange and get Exchange subsidized insurance with a billing cycle’s wait time, but for the next year or two, I think this is a fascinating experiment. XpostFactoid has an interesting interview with Nicolas Bagley on the state waiver program.  The state waiver program in PPACA allows states to offer alternative methods to achieve the same or better results at the same or lower costs of non-waivered PPPACA/Obamacare. 

What about the individual mandate, which comes within the scope of Section 1332?  Could it be replaced in a package that offers equivalent coverage to an equivalent population as the ACA?

“In principle, yes,’ Bagley said. “The waiver is designed to allow states to explore alternative means of structuring their healthcare system. If you have an alternative to the individual mandate that you find more palatable, if you think it can accomplish the same goal of near-universal coverage at the requisite baseline level, then the statute absolutely affords states that possibility.”

“One way to think of it is that the individual mandate operates to discourage the choice of going without health insurance. There are all sorts of ways you might go about discouraging the choice to go without. Restricting open enrollment is a good one: you might be reluctant to go without coverage for three years, even if you’d have gone bare for one,  You can come up with all sorts of other sticks –or, alternatively, other carrots, such as finding money to make it even more appealing to purchase health insurance.”

 Is a ninety day wait period sufficient to avoid significant adverse selection in the presumably small risk pool?  I don’t  know.  If it is, it could be a push to changing the nature of the enrollment period to a rolling open enrollment with a limited free for all time and then a wait time with a weaker mandate.  That could solve a political problem without policy damage.


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16 replies
  1. 1
    Mnemosyne says:

    I don’t know any details, but I heard a PSA on the radio the other morning that made me think California is trying something similar — it was along the lines of If you missed the open enrollment period, call this number/go to this website.

    ETA: And it was a PSA, not a commercial for an insurance company.

  2. 2
    Tommy says:

    I’ve often wondered about the state waiver program. How states are using it. It seems to me somebody in some state is going to come up with a really good idea nobody had thought of or thought it wouldn’t work. Then it does.

  3. 3
    🌷 Martin says:

    @Mnemosyne: From CC:

    Covered California can also determine, on a case-by-case basis, that you experienced an exceptional circumstance, which could allow for a special enrollment period.

    I think they’re trying to get people to stop self-disqualifying themselves. There are so many exceptions to the enrollment period, many of which people don’t think of, such as this:

    If you are a member of a federally recognized American Indian or Alaska Native tribe, you may enroll in health insurance or change your health insurance plan once a month even if the open enrollment period is over.

    Or if you move within the state. CC is genuinely looking to get people enrolled, so they’ll likely be as generous with the rules as they can.

  4. 4
    NotMax says:

    As the saying goes, a camel is a horse designed by a committee. Corollary: a platypus is an otter designed by insurance companies.

  5. 5
    Mnemosyne says:

    @🌷 Martin:

    I’m guessing that we’re getting down to the hard core of people who either have never been insured or haven’t been insured for years, so they don’t know they can apply outside the open enrollment period for reasons like moving, getting married, having a baby, etc. People with insurance know this, but I doubt that people who’ve never had it know the ins and outs.

  6. 6
    Richard Mayhew says:

    @Tommy: Right now, Vermont is prepping a massive waiver for single payer, but that is the only major one that I’ve heard about so far.

  7. 7
    brendancalling says:

    Sorta-kinda OT. I got a real job finally. PT, so not only a precipitous drop from my previous income, but also no benefits, which meant I had to call and report a life change.

    Well. My premiums went from $177/month with a $6,000 deductible and a $20 co-pay for the doctor to…

    wait for it.
    wait for it.
    wait for it.

    $27/month, no deductible, and a $5 co-pay. Exact same plan apparently.

    if this is accurate (and I’m double-checking tomorrow) that’s huge. a massive transfer of wealth to people who really need it.

  8. 8
    🌷 Martin says:

    @Mnemosyne: Remember that we also have this massive population of people on the fringes. People that are undocumented, have green cards but aren’t citizens, etc.

    Permanent residents and anyone else here on a visa are required to have health coverage but undocumented aren’t. However, undocumenteds can be covered through Covered California through Medical.

    So I think the PSA you heard was part of the ongoing game of coded speech to the immigrant audience.

  9. 9
    Richard Mayhew says:

    @brendancalling: yep!

    And congrats on the new job — I’m betting you haev a cost sharing assistance Silver

  10. 10
  11. 11
    WereBear says:

    @brendancalling: Glad to hear things are looking up!

  12. 12
    Hal says:

    @brendancalling: Thanks Obama! I have one friend who continually posts on facebook on how the obamacare has destroyed healthcare in America, and yet this is the most common story I see. Where is this destroyed health care system that apparently only right wingers can see? It’s like an alternate universe.

  13. 13
    Richard Mayhew says:

    @Hal: It is right next to the invisible and double secret welfare system that buys strapping young bucks Caddies and T-bones

  14. 14
    MomSense says:


    Glad you found a job, even though it is PT, and I hope that this is just the start of lots of better things happening for you. I’m also really pleased you were able to sort out your health care coverage so you can keep it and afford it. All the best to you!

  15. 15

    @Richard Mayhew: Do you know what is happening in Massachusetts.

  16. 16
    Richard Mayhew says:

    @schrodinger’s cat: can you be a bit more specific as I have limited relevant knowledge about Massachusetts. If you can point me in the righ direction, I can read up fast.

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