Who is buying coverage on the reform law’s insurance exchanges? That is the question answered by a McKinsey & Co. report looking at results from the 2016 open enrollment period. (McKinsey Report) The report is based on a survey of 2763 uninsured and individually insured persons regarding their enrollment decisions. McKinsey identified seven segments among these consumers: those who stayed uninsured, 39%; those who enrolled in 2016 for the first time, 2%; those who had non-exchange coverage in 2015 but bought an exchange plan in 2016, 10%; those who were in an exchange plan in 2015 and enrolled with the same carrier for 2016, 20%, those enrolled in an exchange plan for 2015 and switching to a new exchange carrier for 2016, 5%; those who were in an exchange plan in 2015 but during the year stopped paying premiums and either were uninsured or got other coverage; and those enrolled in a non-exchange plan, 18%. Note that 39% who were intentionally remaining uninsured, 59% of them had been uninsured for over three years; for many this was a conscious choice. Not all are young, 73% are over age 30; most are healthy and most have good household income. Most are aware of the ACA penalties, but most also have limited awareness of their subsidy eligibility. They apparently just don’t think health insurance is a good economic decision for themselves.
Among consumers who were in an exchange plan the prior year, 70% renewed with the same carrier. Higher-income persons and those over age 50 were less likely to switch carriers. Among those who were previously insured but did switch, the primary reasons were discontinuation of the plan, dissatisfaction with the carrier or a large price increase. Those who got exchange coverage through a broker were more likely to switch. 21% of the people who had exchange coverage in 2015 stopped paying premiums at some point during that year, 67% of those said they had done the same thing in 2014. 36% said they did so because they got other coverage, presumably Medicaid or through a job and 26% said they just couldn’t afford it. The overall picture painted is that for those persons who aren’t Medicaid eligible, there isn’t an overwhelming perception among many that they have to have health coverage. This lack of participation is one reason for the “unexpected” high cost of medical services for those who did enroll, a cost which is driving premiums much higher in 2017.