Smart Benefits: Low Exchange Enrollment Means More Taxpayer Costs
Monday, January 06, 2014
Amy Gallagher, GoLocalProv Business/Health Expert
The federal and state healthcare exchanges did everything possible to boost enrollment in the final days of open enrollment: they extended application deadlines, expanded customer service hours, and worked to overcome the web marketplace tech bugs. Despite it all, final enrollment for January 1 still lagged.
Federal Figures Fall Short
Obama administration officials reported 2.1 million enrolled nationally in federal and state exchanges. While the administration is celebrating this number, it falls short of the 3.3 million target for January and way behind the 7 million enrollee target by March 31st.
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Low MA Membership Blamed on Technology
In Massachusetts, as of December 30th, only 497 had successfully enrolled in new subsidized health plans through Massachusetts' Health Connector. State officials placed another 22,000 people on temporary plans, paid for by the state, while the Connector works to process applications. The Massachusetts Health Connector blames the low enrollment on its information technology vendor, CGI, who developed the state's new website.
RI Enrollees Elude Targets
In Rhode Island, HealthSource RI reported 9,803 individuals enrolled in exchange plans as of the end of December (this figure does not include another 5,280 Medicaid enrollees as of November 30th). While HealthSource RI touts a jump in enrollment since early December, the total is still only about 16% of original population targets of 44,406 uninsured and 15,000 insured individuals set by the Rhode Island Health Benefits Exchange before it was renamed HealthSource RI. And the majority of HealthSources RI's enrollees are between the ages of 55-64, which will likely drive costs higher, particularly when coupled with low enrollment figures.
The Cost of Low Enrollment?
Now that enrollment figures support lower than predicted demand, what will the cost to the taxpayer be?
According to the Center for Consumer Information and Insurance Oversight, the federal government gave 99.1 million directly to Rhode Island's government to launch HealthSource RI. So far, it’s cost the U.S. taxpayer $10,109 per enrollee to set up the site - and that's just for Rhode Island.
In Rhode Island, HealthSource is asking for $26 million in the next budget, effective July 1, 2014, to keep the state exchange running. Based on 9,803 enrollees, it's going to cost the state’s taxpayers $2,652 per enrollee to maintain it.
With these numbers, now may be the time for the exchanges to take stock and examine their core purpose. If it's to help create more affordable coverage, perhaps the bureaucracy and infrastructure of too many exchanges is not the most cost effective way to help those in need.
Amy Gallagher has over 21 years of healthcare industry experience guiding employers and employees. As Vice President at Cornerstone Group, she advises large employers on all aspects of healthcare reform, benefit solutions, cost-containment strategies and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, and is often quoted by national publications on the subject matter. Locally, Amy is a member of SHRM-RI, the Rhode Island Business Group on Health, and the Rhode Island Business Healthcare Advisory Council.
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