Tag Archives: Connecticut

A tale of two states: Delaware and Connecticut

Two states, Delaware and Connecticut released data today providing contrasting pictures of the rollout of the Affordable Care Act. The news from Delaware is bad for supporters of the ACA; the news from Connecticut is much brighter. Taken together, the news confirms a point I believe bears repeating.

It is a mistake to write a single narrative of the rollout of the Affordable Care Act. There are in fact at least 50 different rollouts of the individual Exchanges and many different narratives, each of which may have elements of truth. Based on what we have seen thus far, there are likely to be some states in which the Exchanges and the policies sold in them are relatively stable and at least the goal of greater access to healthcare is substantially met. Connecticut sure looks like the first poster child for success. There are a number of others, however, such as Delaware, in which, unless there is a massive surge, the individual Exchange based system of policies without medical underwriting will not be increasing access to medical care as hoped and in which insurers are likely to feel increasing discomfort in continuing to write policies under the existing regulatory regime.


As of last Thursday, December 12, 2013, only 793 people in Delaware had selected a plan on the individual Exchange and paid the first premium.  Since fewer than 431 had done so as of the end of November, this means that somewhere between about 25 and 62 people per day are selecting for a plan in Delaware and paying the premium.  This is better, of course, than when healthcare.gov was not working, but it is still an inadequate rate of growth in the insurance pool.  If the pace of this “surge” continues for the rest of the year, including the holiday season when attention may be elsewhere,  it means that fewer than 2,000 people in Delaware will have insurance coverage when it begins on January 1, 2013.  Delaware was projected to have 13,898 enrolled through 2014.

The number in Delaware is particularly troublesome for a variety of reasons.  First,  about 265 people from Delaware were previously enrolled in the federal Pre-existing Condition Insurance Program (PCIP), which will end as of December 31, 2013. This means that the number of newly insured Delawareans may be less than the 2,000 discussed above.  Some will just be substituting expiring PCIP policies. Moreover, to the extent the individual policies purchased in Delaware on an Exchange are comprised significantly of people evicted from the PCIP, it means that a significant portion of the purchasers in Delaware will be those known to have high medical expenses.

Second, numbers such as 2,000 on the positive side are troubling due to estimates that 12,000 Delawareans saw their individual policies cancelled in 2013 presumably due to failure to provide Essential Health Benefits. And, even though Delaware is among those states that is permitting insurers to “uncancel,” unless almost all of the insurers do so and unless almost all of their insureds re-enroll, the result in Delaware could actually be an increase in the number of uninsured persons. Moreover, the greater the proportion of Delawareans who retreated back to their faux-grandfathered policies as a result of the Nov. 11, 2013 change of mind by President Obama, the fewer of those mostly healthy individuals likely to offset the more expensive persons enrolling via the Exchange.

Finally, if there end up being, say 2,000 people who purchase policies in Delaware by the time coverage starts, the economies of scale that insurers need to make the system work may not be present.  Some insurers who have, say, higher priced Gold policies may find that there are fewer than 20 people in their insurance pool. Numbers like that don’t work well for the insurance industry.


The news from Connecticut should be at least as encouraging for supporters of the ideas behind the ACA as the news from Delaware should be discouraging. According to information released today, 1,400 people per day are enrolling in individual policies in Connecticut’s own Exchange and the total enrollment is surging up to 20,000. Should the pace of 1,400 per day continue, Connecticut could have 40,000  enrollees by January 1, 2014. To be sure, there is likely to be some shrinkage between enrollment and the actual payment of premiums — a figure Connecticut does not appear to have yet released. Still, having even 35,000 true insureds by the start of 2014 would be a show of great strength and stability for the ACA; Connecticut was projected to have 58,637 enrolled through 2014.

Not only are the absolute numbers encouraging in Connecticut, so too are the characteristics of the enrollees. Nationwide, at last report, only 41% of the enrollees had incomes below 400% of the federal poverty level that entitled them to a subsidy; 59% came from wealthier Americans for whom, perhaps, programs simpler than the stunningly elaborate ACA might have been more sensible. (Note: these figures may be off slightly because, it was released today, California had released its information backwards!)  In Connecticut, however, 70% of the enrollees apparently qualify for a subsidy.  The middle class and the lower middle class are buying to a greater extent. Moreover, the types of policies being purchased in Connecticut, mostly Silver plans, are inconsistent with fears that policies are being purchased primarily by those with higher projected medical expenses.  As discussed earlier on this blog, disproportionate purchases of Gold and Platinum plans could be a harbinger of adverse selection problems.

In short, Connecticut is behaving pretty much as the models used by those who promoted the ACA, thought the rest of the nation would behave. The question now, however, is whether Connecticut and perhaps a few other states will be outliers that happen to conform to the behavior of its neighbor, Massachusetts, on which some of the modeling was predicated. Perhaps, proponents of the ACA should hope, people from Connecticut just procrastinate less and the rest of the nation will rapidly come around to behaving the way that the ACA requires if its projections and aspirations are to bear out.


Delaware is the first jurisdiction I have seen to publish the number of people who have both selected a plan and actually paid the first month’s premium.  Other figures tend to be the larger category of people who have selected a plan. As any electronic shopper knows, there is a big difference between putting something in one’s electronic shopping cart and actually getting the credit card out and hitting “Pay.” So, kudos to Delaware.  I would like to see other jurisdictions follow suit.

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The incredible increase in pace that will be needed to meet ACA enrollment projections

Healthcare.gov appears to be working much better, at least in enabling individuals to select plans. And some of the state exchange web sites appear to be improving their functionality too. Some have heralded these advances as providing hope that the Exchanges will be able to meet the enrollment projections on which the economics of insurance without medical underwriting in part depend. But do these claims stand up to the cold light of mathematics?  Not very well.

Here’s the headline:

A close look at the numbers shows that the pace of enrollments from here to the close of open enrollment needed to meet projections is high in every state, even those touted as successful, and almost impossibly high in many.  Given the incredibly slow start in most jurisdictions, it will not just take a little pickup over the next few months to achieve the projected and needed number of persons in the Exchanges. It will take a miraculous last minute stampede. Since miracles seldom occur,  the result may be two different stories of the Affordable Care Act: a few states in which the Exchanges proved from the start to be a somewhat stable mechanism for providing health insurance without medical underwriting but a significant number of other states in which the results for at least the first year represent a large failure.

Today’s news

News appears to be breaking today that the federal exchanges enrolled about 100,000 in November.  This is being heralded as somewhat of a success compared to the 26,000 who enrolled in October. And, of course, enrollment figures from healthcare.gov are difficult to assess due to the actual and feared dysfunctionality of the web site. But one way to look at this is to consider what has to happen between December 1, 2013, and March 23, 2014, the close of open enrollment to make projections. The states that are dependent on healthcare.gov need about 4.84 million enrollees by the end of that period if the nation is to meet the goal of having 7 million enrolled in the Exchanges by the close of open enrollment.  If, right now, there are about 126,000 enrollees in those states, we are just 2.5% of the way there.  The pace of enrollment on healthcare.gov will need to increase by a factor of about 20 in order to meet goal.  In absolute terms, healthcare.gov needs to be enrolling about 42,000 people per day. And while perhaps not every single one of those people need to enroll for the system to succeed, the 7 million enrollment goal isn’t just a mere wish. There are, as I and many others have noted potentially serious consequences to the stability of insurance markets if the figures fall well short, even in several states.

Whether healthcare.gov can score the needed come back, however, will basically depend on two related factors: (1) whether healthcare.gov is truly fixed and can stand up to the increased pace that will be needed and (2) whether the requisite increase in pace is likely.  This latter factor depends in turn on where on the following spectrum the possibilities fall. On one end of the spectrum, there is the possibility that there is this pent up demand from procrastinators that will surge forward to access the web site in the coming weeks.  Perhaps March Madness for 2014 will constitute this huge surge — kind of like April 15 rushes to the post office to send in tax returns — as the March 23 “deadline” approaches. On the other end of the spectrum, there is the possibility that most people who wanted to and had the means to enroll — the wealthy sick — did so already and others have looked at the prices, the coverages and the penalties and decided that, for now, Exchange coverage is not for them.  The fact that a surprising 70% of current enrollees in the Exchange plans are unsubsidized gives some support to this gloomier hypothesis.

To get further insights, we can also take a closer look at some representative states.


First, let’s look at what has to happen in the most successful state, Connecticut. There, as of  November 14, 2013 (the date of the last report), 7,591 people had selected a plan.  That’s not all it will take finally to get coverage — among other things, people will have to start actually paying premiums — but it’s a solid start. This 7,591 figure represents 12.9% of the projected total of 58,637 for Connecticut.  A little math shows that in order to make projections, people in Connecticut will need to enroll at a pace 2.3 times faster than they had as of November 14 in order to make the projection by the March 23, 2014 date.

It hardly seems impossible that Connecticut could make the projections.  Whether they do so, however, will basically depend on the location of Connecticut on the spectrum discussed above.  We should have a better sense of where on the spectrum we are falling when Connecticut releases new numbers.


Connecticut is a small state.  The enrollment there was projected to constitute only about 1.4% of the total enrollment in the Exchanges.  Let’s take a look at a big state: my home state of Texas. With the largest uninsured population in the country and with no Medicaid expansion into which some Exchange eligible persons might otherwise “fudge into,” Texas was supposed to enroll 780,959. As of November 2, 2014, Texas had enrolled just 2,991. This means that Texas will have to enroll at a pace 59 times faster than it had as of that date in order to meet enrollment projections.  And, even if due to failure to the healthcare.gov website, Texas has enrolled, say, just 10,000 as of November 30, 2013, it will still need to up its pace by a factor of 41 in order to meet projections. Viewed in absolute terms, Texas will need to enroll at a pace of over 6,800 per day. Again, we will have a better sense of the plausibility of this increase when the federal government releases newer data.

Another way of thinking about the issue is to consider what would happen if Texas’ future enrollment relative to its prior enrollment is the same as Connecticut needs to be in order to meet the Connecticut projection. If Texas enrolls at a pace 2.3 times faster than it has thus far, Texas enrollment will be something like 29,000. That would be just 4% of what was originally projected, a shortfall of 752,000.  Connecticut could double its projected enrollment and it would barely make a dent in compensating for a shortfall of this magnitude. Even if Texas celebrates the rebirth of healthcare.gov by stepping up its enrollment by a factor of 10, that still gives it less than 150,000 enrollees, a shortfall of 630,000 over the projected value.

It would also help if the government could get the Spanish language version of its website, cuidadodesalud.gov, to accept applications the same way that healthcare.gov does.


A problem with projecting Texas numbers is that it has been hamstrung by its chosen dependency on healthcare.gov, which has been completely dysfunctional until recently. So, what about a large state that shares some demographic characteristics of Texas but that has a mostly functional web site?  Let’s look at California.

In California, as of November 19, 2013, there were 78,891 counted as enrolled relative to a projected enrollment as of March 23, 2014 of 691,016. Viewed one way, California is going to need to step up the pace of its enrollment by a factor of 3.07 in order to meet its target. In absolute terms, California needs a pace of about 4,936 per day (including weekends and including the busy holiday season) in order to meet target.

Whether viewed in relative or absolute terms, the pace needed in California is ambitious. Covered California, which brags of a recent tripling in the pace of enrollment, still enrolled just 2,700 per day for Exchange plans in the most recent period for which data currently exists. (It is only by counting Medicaid/Medical enrollments that the numbers get higher).  If California were to persist at that pace for the remainder of the enrollment period, it would have something like 414,000 enrolled by the March 23, 2014 date. Depending on the precise composition of the pool of insureds, such a figure would likely be enough to stave off severe adverse selection but probably not enough to do so entirely. And, again, for those focusing on the 7 million nationwide figure, shortfalls of 277,000 in California or 700,000 in Texas are just difficult to compensate for even if other states are considerably more successful.

New York

Let’s pick one more big state.  And, again, let’s pick one where the Exchange is generally said to be doing well: New York.  In New York, as of November 24, 2013, 41,021 are claimed to have enrolled in plans out of the 411,304 originally projected.  This means New York will have to quadruple the pace of enrollments (4.09) in order to meet projections. In absolute terms, the state needs to be enrolling 3,111 per day every day until March 23, 2014.  It is thus in roughly the same position as California. Whether it meets its goals depends on why there has thus far been a shortfall.  If it’s massive procrastination, perhaps New York can get pretty close.  If, on the other hand, many New Yorkers are rejecting the product, and the pace of enrollment just doubles from what it has been, expect New York to fall short by about 190,000 people (46%). Again, smaller states that are more successful will have difficulty compensating for such a large absolute shortfall.


There is no state in which a significant uptick in the pace of enrollments will not be needed in order to meet enrollment projections.  This is true in states that have their own Exchanges and states that do not.  It is true in states touted as a success as well, of course, of those seen as failing.  It is most definitely true for states that depend on the federal website, healthcare.gov.

In a few states, the burden may be met. Many people do indeed procrastinate, even perhaps when it comes to subsidized health insurance that they now lack. To meet enrollment projections in many other states,however,  we need for Exchange applications to be far more the province of procrastinators than even income tax returns.  After all,  only 25% or so wait until the last two weeks to file those. In these other states, the appropriate analogy may not be tax procrastination but the miracle of The Heidi Game in which two touchdowns were scored in the closing 9 seconds after the mainstream media (NBC Sports) assumed the game was lost.  But it’s been 45 years since that turnaround occurred.  It just might happen again with applications for health insurance on the Exchanges, but it seems unlikely.

Could I add one more point?

People are focusing on March 23, 2014 (earlier March 15, 2014) as the measuring date.  The ACA will presumably be deemed a success if enrollment figures meet projections by that date.  But this strikes me as an awfully generous measure. The problem for insurers is that there will be a smaller pool during the first three months of the policy year. And smaller pools generally have higher claims per person.  So, if I ran the world, I’d be looking at two dates to examine enrollments: January 1, 2014 when the plans kick in and March 23, 2014 when open enrollment ends.  Yes, great enrollment by March 23 will ultimately go a long way to reassuring insurers if enrollment is problematic on New Years Day. But if enrollment is really bad come Rose Bowl time, expect insurers to lose a lot of money on claims filed between then and the close of open enrollment.  If they can’t make that money back on the late filers, expect insurers to figure out some way of getting even for 2015.

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