Connect for Health has released detailed metrics on enrollments through November and some summary data for the first week in December. Here are some of my thoughts on the metrics. Note that these are based on my general understanding of the industry and not an analysis of rate filings or other sources.
- The average Exchange age is high but not dramatically high. Based on the breakdown provided the average age is approximately 45. This is likely higher than many the carriers would like although not insurmountable especially as the pace of enrollments is picking up quickly.
- Where are the children? Children under 19 make up roughly 27% of the state population1 but are only 10% of the current applications. Does this reflect the older age makeup of the current pool and will increase if the overall pool becomes younger or is this an effect of CHP+ membership extending to 250% FPL while adults are Medicaid eligible only to 133%?
- Are there enough lives to go around? For a health carrier to be sustainable, the health carrier needs a minimum number of lives. The minimum number is based on the overall fixed costs of running the plan and the number of members to provide a stable cost and allow the law of large numbers to come into play. The law of large numbers can come into play at a few thousand lives but the ACA has imposed a number of additional costs on carriers. These cost include substantial IT infrastructure to connect to Exchanges and the federal government to enable the risk sharing programs. These costs probably push the minimum health plan enrollment over 10,000 members. With only 15,000 in membership and 3 new plans, Colorado HealthOP, Denver Health, and Colorado Access, and 1 very small carrier, Colorado Choice, there may not be enough enrollment to support the current competitive landscape.
Some additional data that would be helpful would be:
- Are these applications or enrollments? In other words has the first month’s premium already been received or is Connect for Health providing the number of applications that have been sent to carriers?
- What portion of families are dual eligibles? Is this a reasonable explanation for the lack of children and will therefore persist?
- Will Connect for Health release a demographic breakdown by week to determine if there is a trend in the demographic makeup of the population?
1 Based on the 2014 projection from the state demographer.