There’s a good chance that healthcare reform is going to mean big membership gains for individual health plans (Medicaid and small group plans too, but that’s another story). How much growth can be expected in the individual market? I’ll tell you, but first you have to tell me exactly how many individual lives there are currently.
According to the Census Bureau, there are about 17 million members of individual health plans, representing nearly 7% of the insured market. A Kaiser Family Foundation analysis of Census data puts the number at 14.5 million.
Both seem high to me. A recent CRG tally of individual plan membership at 23 leading managed care organizations added up to about 8.4 million lives. Applying the 80/20 rule, the intrepid analyst would arrive at a nationwide individual membership estimate of 10 million to 11 million.
So where are the other several million individual lives? Census basically admits that its individual number might be overstated. Here are two possible reasons why. 1. Misconceptions among Census survey respondents over the definition of individual or “direct-purchase” insurance; 2. The survey question is phrased to include anyone who had individual coverage at any point during the year.
Can the number be overstated by that much? Who knows. A Census analyst offered little comfort in characterizing the 17 million number by stating: “It is what it is.”
Now on to the growth potential. There are nearly 50 million uninsured. Expanding Medicaid eligibility could cover 15 million to 20 million. Figure another 5 million (a guess) will remain uninsured for one reason or another.
Of the remaining 25 million to 30 million, most would end up in a group health plan, according to a scenario laid out by the Commonwealth Fund. Individual membership under the CWF scenario would increase about 40%. Using CRG’s 10 million to 11 million baseline, individual membership would grow to nearly 15 million.
All of which is strictly a back-of-the-envelope projection that could change dramatically depending on the details of the final reform package. That’s another way of saying your guess is as good as mine.
One thing is certain, however. If health plans want to capitalize on these individual opportunities, they’ll need to figure out how to make money in what’s likely to be a highly regulated, community rated, guaranteed issue market in which benefit levels are standardized by the government.
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It is hard to not sound sarcastic when we consider the sweeping changes that this bill may create. Each representative should be required to read and sign off that they have done so. Knowing the significant shift this might create, on the magnitude of a constitutional amendment, I suggest the public also get to read it and an opportunity to comment on it. As a result, it should be publicly posted as promised well before the vote. We all know change is inevitable, but good medicine always offers informed consent.