Delayed exchange enrollment deadline could hurt profits

Insurers are pushing back against some lawmakers' calls to allow consumers more time to enroll in coverage sold through the federal health insurance exchange, claiming the move could increase their premiums and reduce profits.

Because of the ongoing technical problems with the federal online marketplace, many Republican members of Congress as well as 10 Democratic senators have urged the U.S. Department of Health & Human Services to delay the enrollment deadline past the March 31 date, reported Bloomberg.

Postponing the enrollment deadline would have a "destabilizing effect on insurance markets," said Robert Zirkelbach, a spokesman for American's Health Insurance Plans. The problem, according to the lobbying group, is a postponed enrollment deadline would extend beyond when insurers set rates for 2015, so they would be basing premium costs on the sicker, more expensive members. And that could lead to higher premiums.

"Extending the open enrollment period could also cause significant uncertainly and instability in 2015 premium rates," Zirkelbach said. "Health plans would have to start submitting premiums to regulators before knowing who is enrolled in their insurance plans."

What's more, a later enrollment deadline could mean younger, healthy consumers wait to sign up for a health plan, causing insurers to lose revenue from their premiums and threatening profits. "We worry about things like extended open enrollment and for how long that goes on," Aetna CEO Mark Bertolini said on a conference call with analysts, Investors Business Daily reported.

Some industry analysts agree. "If you can enroll at any point in the year, then you can just wait until you get sick," Brian Wright, an analyst with Monness Crespi Hardt, told Bloomberg. "This isn't the industry crying foul and exaggerating the issue, this is actually one of those issues where there is a well-grounded reason for the concerns."

But 10 Democratic senators, led by Sen. Jeanne Shaheen from New Hampshire, think a longer enrollment period would "give consumers critical time in which to become familiar with the website and choose a plan that is best for them," they said in a letter to HHS Secretary Kathleen Sebelius. "Individuals should not be penalized for lack of coverage if they are unable to purchase health insurance due to technical problems."

While Obama officials extended the "need-to-be-insured" deadline, they haven't shown an interest in delaying the enrollment deadline.

To learn more:
- read the Bloomberg article
- here's the Investors Business Daily article
- here's the Shaheen letter

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