ACA’s Enrollees Are Sicker, More Expensive For Insurers

Health insurers gained a sicker, more expensive patient population after the Affordable Care Act expanded coverage in 2014, according to an early look at medical claims from the Blue Cross Blue Shield Association, which represents the most common brand of insurance.

Newer customers had higher rates of diabetes, depression and high blood pressure, among other conditions, the association said in a report released Wednesday. They also visited the emergency room much more frequently than people who had private, individual coverage before the law expanded.

Researchers caution against drawing broad conclusions about the newly insured based on what amounts to a limited look at a still-evolving health care market. But the numbers show how gaining coverage is only part of a long journey toward the ACA's other key goals of improving health and slowing cost growth.

"The coverage is the first step," said Linda Blumberg, a health insurance expert at Urban Institute, a nonprofit research organization. "Figuring out how to help these folks use medical care in the most effective ways is a real challenge."

The association compiled its report from dozens of insurers that sell Blue-branded coverage in 46 states and Washington, D.C. It compared claims from newer customers with two populations: people who bought coverage before the law expanded and those who have insurance through an employer.

Medical costs for new customers were, on average, 19 percent higher in 2014 and 22 percent higher in 2015 than for customers with employer-based coverage.

Health insurers expected their initial wave of patients from the ACA expansion to generate higher-than-normal claims because some of the uninsured had not used the health care system for years and were waiting for coverage to help pay for needed care.

Companies also have struggled initially to add younger consumers who don't consume as much health care, and they have been hurt by expensive patients who sign up outside regular enrollment windows.

Basic economics also may be behind the higher health care use, since the law lowered care costs by expanding coverage.

"If you lower the price of anything, people are going to use it more," said Blumberg, the Urban Institute expert who did not work on the Blue Cross Blue Shield report.

She added that it is too early to draw firm conclusions about trends in use, and the association's report doesn't include insurers that don't sell Blue Cross Blue Shield plans.

That includes prominent exchange participants like the nation's largest insurer, UnitedHealth Group Inc., Aetna Inc. and Molina Healthcare Inc.

Even so, Blue Cross Blue Shield Association Senior Vice President Alissa Fox said their findings underscore a need for better care management.

That means making sure newly insured diabetes patients get regular blood sugar checks, or those with other chronic diseases keep taking their medicine. It also involves basic steps like connecting patients with a primary care doctor and teaching them about preventive care like flu shots that can ward off more expensive treatments.

Many newly insure patients are used to simply waiting until they become very sick and then going to an emergency room, said Dr. J. Mario Molina, CEO of Molina Healthcare. His company offers coverage on public exchanges in nine states. Molina said earlier this year that they have been surprised with how hard it has been to draw new patients into a doctor's office.

"They had been uninsured for so long that they didn't understand that this is what ... modern insurance is all about," he said. "It's about prevention and getting ahead of problems, not waiting until the last minute."