WASHINGTON – Sign-ups for insurance through President Barack Obama's health-care law varied widely across the nation in the first year for the system's state marketplaces, according to a new government report that shows consumers flocked to coverage in some states while enrollment fell well short of targets elsewhere.
These differences could have a major impact on what happens to rates next year, with added pressure on consumers in states with low enrollment.
Enrollment lagged the most in states that were running their own marketplaces, including Massachusetts and Oregon, which struggled with their online systems. The two states fell more than 70 percent short of their goals.
Even several states considered successes, including Kentucky, had relatively few sign-ups for marketplace plans, though Kentucky had strong Medicaid enrollment. Altogether, 20 states fell short of projections made last year by the Department of Health and Human Services.
By contrast, Connecticut, Rhode Island, New Hampshire and Florida all recorded more than twice as many sign-ups as federal officials had hoped for.
California, which led all states with more than 1.4 million sign-ups, had 8 percent more than projected.
"While there is a lot of focus on the national numbers, it's what is happening state by state that will affect how much premiums rise next year," said Kaiser Family Foundation Senior Vice President Larry Levitt, an insurance expert.
"Insurers set premiums based on who signs up in a state. If lots of healthy people enrolled in California, that doesn't spill over into Texas and help the risk pool there."
The Obama administration Thursday celebrated the national tally, which was 8.019 million through April 19, according to the administration.
A flood of sign-ups in late March and in the extended April enrollment period included many younger consumers, who are prized by insurers because they typically cost less.
The report indicates that national Medicaid enrollment increased by 4.8 million between Oct. 1 and the end of March, as low-income Americans signed up for the program.
"We are ensuring that health coverage is more accessible than ever before, which is important for families, for businesses and for the nation's health and well-being," Health and Human Services Secretary Kathleen Sebelius said.
The law's critics charge that far fewer of the new enrollees have paid their premiums. But insurance industry officials have put the payment rate at around 85 percent.
Wellpoint, one of the nation's largest insurers, reported this week that about 90 percent of its new customers had paid their premiums.
The company also backed off earlier warnings about big 2015 premium increases, reporting in a call with investors that a late surge of young customers had improved the company's risk pool.
However, executives at the company cautioned rates could increase more in some parts of the country.
The health law allows Americans who do not get coverage through an employer to select a plan on state-based marketplaces where insurers must offer a basic set of benefits. Insurers can no long turn away sick customers.
Americans making less than four times the federal poverty level – or about $94,000 for a family of four – qualify for government subsidies in most parts of the country.
The Obama administration is already in intense discussions with insurance industry leaders to try to keep premiums from spiking in select, high-risk markets around the country.
Industry officials are most concerned about states where insurers continue to sell health plans that do not meet new standards set out in the law.
These noncompliant plans are not being offered on the new marketplaces and so allow many healthy consumers who have such plans to remain out of their state marketplaces.
That, in turn, means that the mix of consumers who are getting health plans on the state marketplaces tends to be sicker, creating a bad risk pool.
The marketplaces depend on having a mix of healthy and unhealthy consumers to balance risk and keep premiums in check.
About half the states have allowed insurers to continue to sell these plans, an option Obama gave states last year amid public outcry over the cancellation of many plans.
Low enrollment in many of these same state marketplaces threatens to exacerbate problem of a bad risk pool.
By contrast, insurers in states with stronger enrollment – including HealthNet and Blue Shield of California, two of that state's dominant carriers – have been more upbeat about the premium picture.
"The most encouraging thing is the sheer number of people who enrolled," Blue Shield of California CEO Paul Markovich said at an industry convention last week. "If the number is really big, they can't all be old and sick." Markovich said the bigger threat to rates may come from rising medical prices.
In the longer term, the mixed enrollment picture may also impact Americans' health.
In addition to variations in marketplace sign-ups, state enrollment in Medicaid is diverging as only about half the states have elected to expand their programs under the health law.
Recent polling from Gallup indicates that between 2013 and the first quarter of 2014, the uninsured rate fell from 16.1 percent to 13.6 percent in the 21 states that are expanding Medicaid and have elected to fully or partially operate their own insurance marketplaces, rather than defer that job to the federal government.
The uninsured rate dropped a third as fast in the remaining states that have not fully embraced the law, from 18.7 percent to 17.8 percent.
Residents of states with higher levels of insurance coverage typically have fewer problems seeing the doctor and get more recommended medical care. They also tend to live longer .
"It doesn't matter how good the care in a particular state is, if people can't get in the door, they can't receive high-quality care," said David Radley, a researcher at the Commonwealth Fund, a nonpartisan foundation that has extensively analyzed disparities in health-care systems nationally.
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