It is reported that ACA open enrollment is advancing even though many of the past challenges linger on, and not just the customers, but the insurers too are facing challenges. Enrollment of the younger individuals has lagged for all the three years the exchanges have been introduced, and we can assume that only a few healthy individuals are enrolling to balance the cost of old enrollees.
A notable factor is the statutory limit on the amount that the insurer can charge older enrollees when compared to the younger ones. The currently fixed ratio is three is to one, i.e., the insurer can charge a highest premium of no more than three times the lowest premium for a specific product sold on exchange. Moreover, the idea of individual mandate is to force users into buying insurance, but the penalty for failure to insure has not yet worked as intended.
The penalty for not maintaining insurance is incremental, meaning that it is cheaper for the users to pay penalty than to buy insurance. This is the reason the healthier and younger enrollees are ready to gamble that they will not have to use the health care system often.
Healthier and younger enrollees will save money paying the penalty rather than buying insurance or paying for the insurance that they do not feel they need. Some other young enrollees are also taking advantage of the provision of ACA that allows them to remain on the health insurance plan of their parents until they are 26 years old.
Insurers also say that consumers avoid paying full year’s worth of premiums and only go for coverage when they need. They also argue that consumers can take advantage of special enrollment periods when it is comfortable for them outside of the open enrollment period. It seems that the projection of the Obama Administration that millions of people have not maintained their insurance coverage round the calendar year supports the arguments of the insurers.
Besides all that, ACA needs health plans to maintain coverage for enrollees for 90 days after a consumer fails to pay premium on time. Acting CMS Administrator Andy Slavitt said that more than 25 to 30 percent of the exchange enrollees are not remitting their premiums on time. The administration is trying to improve enrollment of younger people, and for this, they are planning new strategies like direct mails targeting younger adults, together with digital campaigns.