National Underwriter: Exchanges and Marketing Challenges 

Exchanges May Face Marketing Challenges

By ALLISON BELL

Published 12/16/2010

About a third of the uninsured people who might be eligible to buy subsidized coverage through a health insurance exchange in 2014 have had no recent health or care access problems, researchers say.

The researchers, at the Center for Studying Health System Change (CSHSC), Washington, come to that conclusion in a paper based on a 2007 coverage survey of about 18,000 U.S. adults, including 4,500 people ages 19 to 64 with family incomes between 138% and 400% of the federal poverty level, and a second survey, on attitudes, conducted from 2005 to 2007.

The second survey sample includes 20,000 adults ages 19 to 64 with family incomes between 138% and 400% of the federal poverty level, and about 3,250 of those people are uninsured with no access to employer-sponsored group health coverage, the researchers say.

About 25% of the uninsured participants with incomes between 300% and 400% of the poverty level and 38% of the uninsured participants with incomes between 200% and 300% of poverty level said they have had no recent problems with their health, medical bills or access to health care, and about 31% of uninsured adults ages 27 to 39 said they have had no recent problems with health, medical bills or access to care.

The Affordable Care Act, the federal legislative package that includes the Patient Protection and Affordable Care Act (PPACA), includes provisions that will require states to create a system of state-based health insurance exchanges in 2014. The exchanges are supposed to help individuals and small groups buy standardized, federally subsidized health insurance packages that meet exchange program quality standards.

Some fear that younger, healthier uninsured people with moderately high incomes, will get smaller subsidies because they are closer than other moderate-income people to earning 400% of the federal poverty level, will avoid buying coverage through the exchange system.

But 50% of the uninsured, moderate-income survey participants with no health, medical bill or care access problems described themselves as “risk averse,” rather than as “risk takers,” and that might be a sign that many of those people will be willing to buy coverage through an exchange system, the researchers say.

A majority of uninsured, moderate-income adults ages 26 to 39 believe having coverage is important, the researchers add.

About 55% of the participants in that category said they disagreed with the statement that, “I’m healthy enough that I don’t need health insurance,” and 38% disagreed with the statement that, “Health insurance is not worth the money it costs.”

But persuading healthy, moderately high-income people to pay for coverage may still be harder than enrolling low-income people in Medicaid or other free and highly subsidized health coverage programs aimed at poor people, the researchers say.

“Designating defined open-enrollment periods in the exchanges will help reduce the adverse selection created when people can wait to enroll until they need care,” the researchers say. “Continuous open enrollment has been cited as a contributor to adverse selection in the combined small and nongroup health insurance market in Massachusetts.”

PPACA will require the exchanges to provide an initial open-enrollment period, along with annual and special open-enrollment periods, but the timing and length of the enrollment periods still must be determined through regulation, the researchers say.

“Efforts to educate the public about the exchanges during open-enrollment periods should stress not only the financial penalties associated with the individual mandate, but also the much greater access to medical care that comes with insurance coverage and the personal financial risk of going without coverage if they incur unexpected medical costs,” the researchers say.

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