August 11, 2014
ObamaCare Exchange Enrollment Is Shrinking, Top Insurers Say
By JED GRAHAM
INVESTOR'S
BUSINESS DAILY
Aetna's (NYSE:AET) ObamaCare exchange statistics
should clear up any doubt as to why the Obama Administration has been
tight-lipped about enrollment since celebrating 8 million sign-ups in
mid-April.
Reality, evidence suggests, could require quite a come-down from those lofty
claims.
The nation's third-largest health insurer had 720,000 people sign up for
exchange coverage as of May 20, a spokesman confirmed to IBD. At the end of
June, it had fewer than 600,000 paying customers. Aetna expects that to fall to
"just over 500,000" by the end of the year.
That would leave Aetna's paid enrollment down as much as 30% from that May
sign-up tally.
"I think we will see some attrition ... We're already seeing it. And we
expect that to continue through the end of the year," CEO Mark Bertolini said in
a July 29 conference call.
It's not clear how representative Aetna's experience is of broader exchange
trends, or whether its projection may be too conservative. (If it were
representative, a similar 30% decline would drop ObamaCare enrollment to 6
million or less.)
Still, as one of ObamaCare's largest players, participating in exchanges in
16 states plus D.C., Aetna's experience provides a pretty good window into what
is happening across the country, and there are other indications that enrollment
has turned down.
Cigna (NYSE:CI) said that it expects its
individual market customers, including more than 100,000 in the exchanges, to
"move from 300,000 down to 280,000 in that range," Cigna CEO David Cordani said
in a conference call.
Other major insurers danced around questions about attrition on recent
earnings conference calls, but none denied that it was occurring.
Another data point comes from Washington, the only state that didn't report
sign-ups to HHS until they paid an initial monthly premium. As also pointed out
by Charles Gaba of ACASignups.net, the state's exchange had 164,062 paid
enrollees as of April 23. But the state reported 156,155 people enrolled as of
June 1.
The gap between the high watermark of sign-ups and the number of current
premium-paying customers reflects both those who never sent in a first payment
and those who stopped paying for any number of reasons. For some, finances may
have been too stretched. Some may have gotten fed up with high deductibles, and
others could have switched plans so they wouldn't have to switch doctors. Still
others may have found a job that came with health benefits, or others lost
income and qualified for Medicaid.
ProPublica reported that HealthCare.gov has seen more than 1 million
transactions since the extended open-enrollment period, though it's not clear
how many represent new customers as opposed to people reporting a change in
income, for example.
People who have major life changes, such as losing employer coverage, can
still get insurance outside of open enrollment.
"A big question is whether new members will offset attrition," wrote
ProPublica's Charles Ornstein.
The incoming evidence suggests that attrition is winning.