Tuesday, November 5, 2013

More than 70,000 Arkansans have applied for Medicaid expansion "private option," DHS begins auto-assignment

Posted By on Tue, Nov 5, 2013 at 7:14 PM

The Department of Human Services today released the latest enrollment numbers on the "private option" for Medicaid expansion. More than 70,000 have applied, with more than 60,000 verified as eligible and enrolling. DHS also provided information on people who have either picked plans themselves or were auto-assigned (auto-assignment began this week). Combined, around 50,000 now have plans, and we have our first glimpse both at what sorts of choices "private option" consumers make in choosing a plan and how the auto-assignment system works in practice. After the jump, details on what all this means and a close look at the numbers.


For background on how enrollment works (and what we mean by "enrolled"), see here, but the short version: when DHS receives a response to their direct mail campaign (they've received 64,465 through November 2), those folks are enrolled — they've sent a signed application statement to DHS and DHS has already confirmed their income status via existing information. Those enrollees are then directed to a state-run website (it's working fine) to pick a plan. But if they don't pick a plan, they're still enrolled — they have a plan picked for them via the "private option" auto-assignment policy. Among the people who have enrolled via the direct mail campaign, thus far 15,086 have gone to the website to select a private plan. Of those, a little more than 4,311 (around 29 percent) have been routed to the traditional Medicaid program after a health screening test determined that they were medically needy/frail and would be better served in the traditional program. 

In addition to the 63,465 enrollees, DHS has received almost 9,000 completed applications: 3,835 via paper applications or telephone and 5,089 via the state-run website for applying for the "private option" (separate from the site for picking a plan, also working fine). Over the next six weeks, DHS will determine eligibility for these pending applications. Those that qualify for the "private option" will be enrolled; those that don't will be directed to the Health Insurance Marketplace, to sign up there (hopefully via a functioning federal portal by then!). 

Got all that? We'll keep tracking these numbers, as we've been doing. But the exciting news today (okay, only exciting to anyone that's gotten this far) is information on plan selection and auto-assignment.

You can read all about auto-assignment here, but basically it aims to help lesser competitors gain a foothold in the first year of the "private option" by targeting a minimum market share for each carrier in a given region. If a "private option" enrollee doesn't select a plan, he or she will be auto-assigned. No, this doesn't mean that anyone is automatically enrolled or mandated to participate — it's just the mechanism to deal with a glitch for people who have signed up but don't complete the process by picking a plan. Auto-assigned enrollees are informed of their plan and have 30 days to pick another plan instead if they want. 

One thing to note: the auto-assignment guidelines aim to even out market share between carriers among “private option” consumers only, not the Health Insurance Marketplace as a whole. 

So auto-assignment will help lesser competitors, but which carriers will "private option" consumers choose? I’ve spoken with a few insurance industry insiders about this over the last few months and no one has been quite sure. "Private option" enrollees can pick any Silver plan on the Health Insurance Marketplace. Maybe consumers would pick the most generous plans, since the premium is fully paid for by the government. Or maybe they would pick the brand name they know, Arkansas Blue Cross Blue Shield, which happens to have the cheapest premiums. 

The sample is too small to read too much in to, but the numbers released by DHS today (see below) suggest that in the two regions in which Ambetter (which has the most expensive premiums) is available, they have a sizable advantage, with Arkansas BC/BS the second most popular choice. Arkansas BC/BS is leading the way in the other five regions. Why is Ambetter doing so well? Probably because they offer plans with Vision and/or Adult Dental. Since "private option" consumers aren't price sensitive, they're likely to pick the choice with more coverage. (Officials from DHS and the Arkansas Insurance Department are likely to develop rules in future years to deal with price sensitivity and possibly to streamline the way that benefits packages are offered.)

Less than 9,000 have actually selected plans themselves so far. Going forward, a higher percentage of enrollees are likely to pick a plan as more people sign up via the web site, a more streamlined process than the direct mail campaign. Meanwhile, 40,405 were auto-assigned this week, bringing the total number of people now enrolled in plans to 49,151. See below. (Confusingly, QualChoice, lagging behind among "private option" consumers, also seems to have gotten the least number of auto-assignments...I've got a line in to DHS asking why).

One last thing to keep in mind: because of the Affordable Care Act’s rules regarding medical loss ratio, the premium prices don’t necessarily reflect the costs the government will bear in paying for these plans. If a carrier ends up spending less than 80 percent of their revenues from premiums on medical services and quality improvement, they owe their customers a rebate. In this case, that would be the government. So while, for example, Ambetter has the most expensive listed premiums, we don't know for sure whether they will actually end up being the most costly. 

Below, see the plan enrollment numbers by region. The first table shows total enrollments, the second table shows enrollment by auto-assignment, and the last table shows which plans consumers picked themselves. 

click to enlarge po_plan_selection.jpg



 

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