Affordable Care Act Enrollee Spending Is Increasing

In response, some insurers have raised their rates or tweaked their approaches this year

By Anna Wilde Mathews
March 30, 2016 12:01

People who enrolled in insurance plans under the Affordable Care Act generated higher medical spending in the law’s second year than in the first, according to a new analysis of health-insurer data released by an industry group.

The analysis, based on claims from 21 Blue Cross and Blue Shield insurers around the country, highlights a challenge the companies say they face covering the population that signed up for plans issued under the ACA, sold both on the law’s signature marketplaces and outside them.

A number of Blue Cross and Blue Shield insurers faced increasing financial losses in 2015 on their ACA business, and some have responded by raising rates or tweaking their approaches this year.

The analysis, which didn’t include data from Anthem Inc., the biggest Blue insurer, found that the average monthly medical spending on an ACA plan enrollee for 2015 was $559, up 12% from $501 in 2014, the first year of the ACA plans. The increase for people enrolled in employer plans was 8%.

However, the ACA-plan figures don’t include people who held individual coverage with the Blue Cross insurers before 2014, who are likely among the healthiest ACA enrollees.

That exclusion almost certainly raises the average-spending total in both years.

Moreover, fourth-quarter data isn’t included. The analysis included data for about 4.7 million individual insurance enrollees and approximately 25 million people in employer coverage.

The report was released by the Blue Cross Blue Shield Association, which represents the Blue insurers, most of which are not-for-profit.

The group may be airing an early defense for further premium increases, said Sam Glick, a partner with consulting firm Oliver Wyman, a unit of Marsh & McLennan Cos.

“It’s making it clear the populations they are serving may be higher cost, and trying to lay some of the groundwork for rate increases and defending their tax-exempt status,” he said.

A spokesman for the Department of Health and Human Services said it was “no surprise that people who newly gained access to coverage under the Affordable Care Act needed health care,” noting that people with pre-existing health conditions often couldn’t buy plans before ACA changes in 2014.

An HHS official also pointed to programs in the ACA that were designed to smooth risk for insurers; their impact wasn’t included in the industry study.