Do New Exchange Enrollees Have Lower Health Costs?

As premium increases appear ready to accelerate for 2016 on the health insurance exchanges, there is high interest in underlying medical costs.  Drug use often provides an early peek at overall health spending for a group of enrollees and Express Scripts has released its most recent exchange Pulse Report.  (ESI Report)   The report looks both at trends from January 1, 2015, to March 31, 2015, and compares Q1 2015 to Q1 2014.  One startling piece of information is that in first quarter of 2015 42% of total drug spending on exchanges is for specialty meds versus 34% in Q1 2014.  The growth rate for the specialty category is 24% in exchange plans compared to 8% in commercial plans.  In the 15 month analysis, 5% of enrollees account for 68% of all drug costs.  This is likely due to persons with HIV and hepatitis C, which have very expensive medications.  Compared to Q1 2014, the first quarter 2015 members are about 4 years younger, slightly lower-income, only 33% have a drug claim versus 40% in the earlier year and only 43% had a specialty claim versus 83%.  Total drug costs per member per month were $42 versus $66 for the earlier quarter.  While current year trends on demographics improved over last year, the total pool is still much older and much heavier users of health care than the general commercial population.

Other findings in the report include less medication adherence among exchange enrollees than regular commercial plan members.  This non-adherence affected many common conditions, including high blood pressure, where 34% of exchange patients were non-compliant compared to 29% of commercial members, and HIV, where 27% of exchange members were non-adherent, compared to 25% of commercial enrollees.  Overall, the report gives a glimmer of hope that the pool of people enrolling through the exchanges in 2015 was healthier, or at least had less medical spending, than the group that enrolled in 2014.  That could provide some relief on exchange premium rates in 2017.  But it is also apparent that it is the older, less healthy people who are disproportionately signing up for exchange plans and younger ones aren’t, meaning that spending will remain high, and rates will continue to rise at an unhealthy clip.