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North Bay Business Journal

Monday, February 3, 2014, 6:30 am

Covered California enrollment accelerates

Still, experts wary about mix of enrollees, especially lack of ‘invincibles’

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    Covered CaliforniaSACRAMENTO — With just shy of two months before an extended enrollment season closes, many in the insurance world are closely watching enrollment figures for both Covered California, the state’s online health exchange under Obamacare, and outside of the exchange.

    The exchange recently released enrollment figures through the end of December, noting that more than 500,000 individuals have signed up for health plans offered through Covered California. And preliminary numbers through Jan. 15 show a total of 625,000 enrollees, while another 584,000 were deemed eligible for coverage under the expanded Medi-Cal.

    Covered California officials said those numbers are on track with projected enrollment goals, but brokers and insurance companies are keeping a close eye both how many people enroll and what the spread of risk will look like.

    “We are getting more enrollment and definitely the pace has picked up,” said Victor McKnight, a principal for EPIC Insurance Brokers in Petaluma. “But the challenge with enrollment on the exchanges is it’s only part of the enrollment. It doesn’t include direct enrollment.

    “To really get excited or upset about the enrollment in the exchange is probably premature,” he added.

    Anne Gonzalez, a spokeswoman for Covered California, said the goal for the exchange through March 31 was between 487,000 to 696,000 — meaning the exchange is seemingly well on its way.

    But an important metric isn’t just how many people enroll, but the age and relative health of who is enrolling at the greatest pace, Mr. McKnight said.

    Through the end of December, nearly 45,000 18–25 year olds had enrolled, or roughly 10 percent of the exchange’s enrollees, while just more than 61,000 26–34 year olds had enrolled, or nearly 15 percent. By contrast, the number of 34–44 year olds enrolled was nearly 66,000, almost 16 percent; the number of 45–54 year olds was nearly 104,000, or 23.6 percent; and the number of 55–64 year olds was more than 128,000, or nearly 29 percent.

    While that isn’t particularly surprising given that older individuals are more likely to both need and appreciate the importance of having health insurance, it could spell higher rates of utilizations and thus potentially increase costs, Mr. McKnight said. The 18–34 year olds — often dubbed “invincibles,” are a prime target of the exchange and insurance companies because they generally utilize fewer health care services and more evenly spread the risk pool.

    About 40 percent of the total individual market falls within 18–34-year-old range, and that would be a more ideal number to spread the risk, according to Mr. McKnight.

    “It appears that the enrollment is older than what the administration has hoped for,” he said. “That won’t impact us right away, but if we don’t right that issue, in 2016 we will see much higher rates.”

    Still, enrollment both inside and outside of the exchange could spike in the coming weeks, so it’s perhaps too soon to draw any definitive conclusions, Mr. McKnight said.

    In Covered California’s Small Business Health Options Program, or SHOP, nearly 300 small businesses have successfully enrolled. A total of 2,155 employees and their dependents will be obtaining coverage through the new employer-based plans, according to Covered California.

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