People who sign up for individual market plans during special enrollment periods face higher costs than those who sign up for coverage during open enrollment, a new study shows.
Researchers at Harvard examined claims data from 2015 and 2016 on about 1.5 million individual marketplace enrollees and found that 20% signed up for plans during a special enrollment period. Those people were more likely to be younger, and their costs were 34% higher, according to the study.
Members who enrolled in an SEP had inpatient care costs that were between 69% and 114% higher, and emergency care costs that were between 11% and 19% higher.
The researchers warn that finding younger members with highest costs indicates there is some adverse selection among people who enroll during an SEP, which can drive up premiums and potentially push insurers to exit markets.
For example, members who enrolled during an SEP in 2015 and renewed their coverage for 2016 were more likely to have higher health costs and to be older than those who enrolled newly for 2016.
"Potential adverse selection among SEP enrollees could remain a concern to the extent that it contributes to insurers raising premiums to unaffordable levels or exiting the marketplaces, particularly in already-vulnerable markets," the researchers wrote.
"There is considerable variability in the number of insurers that participate in the marketplace in each state, as well as concern about a lack of competition in many marketplaces, which increases premiums and decreases affordability, particularly for unsubsidized marketplace members," they said.
The findings also come as the Affordable Care Act's exchanges have stabilized significantly in the past several years, even luring big-name insurers such as UnitedHealthcare to consider expanding their offerings after massively scaling back their exchange footprint.
Further research is needed, the authors said, to study the impact of these trends on risk adjustment and to inform any policy changes.