Will Public Exchanges Capture Greater Enrollees Not Eligible For Subsidies This Open Enrollment Season (OE 2016)

The next open enrollment will be a split bag. The uninsured is comprised of about 51% that are under 138% FPL, 35% between 139-400% FPL leaving the remaining 14% greater than 400% of the FPL, according to Kaiser’s survey of low-income Americans and the ACA. That’s not the whole story. Fifty-one percentage have not signed up. Why would someone not sign up for health insurance? Of course it’s makes good sense to have healthcare protection, not to mention the legal penalties, resulting form not carrying it? There is only one main reason, they truly can’t afford it.

The McKinsey Consumer Health Insights survey, supports this with February 2014 data. McKinsey determined the top five reasons for not enrolling as 1. Affordability (52%) 2. Technical challenges (27%), 3. Plan selection (14%) 4. Plan comprehension (8%) and 5. Still deciding (21%). This information is also supported by increased rates by the carrier’s filings. CareFirst asked for a 30 percent increase for 2015, but was granted only 16 percent in Maryland. However, Baltimore, Maryland actually was tame, eventually averaging a 4.6% increase from previous year for the 2016 open enrollment (OE). Other states were less fortunate in regard to rate changes from previous year for example Portland, Oregon at 16.2%, Albuquerque, New Mexico at 11%, Richmond, Virginia (10.8%) and Burlington, VT at 9.2% (Source: Kaiser Family Foundation analysis of 2016 insurer rate filings to state regulators).

These rates aren’t sustainable for Americas to pay, when family salaries are not even keeping pace with basic inflation. So what is a family to do? Pay for bread or buy health insurance? I think we all know what we’d do – it’s an easy decision that defines the ‘why’ behind the fifty-one percent. What is driving rate increases? There are a number of reasons and the fact insurers are quickly exiting the market, isn’t helping. Kaiser identified 11 states that are losing for 2016 OE including Connecticut (4 leaving), DC (2 leaving), Maine (4 leaving), Maryland (5 leaving), Michigan (12 leaving), New Mexico (5 leaving) New York (16 leaving), Oregon (11 leaving), Washington (11 leaving), Virginia (6 leaving) and Vermont (2 leaving). The insurers attribute two reasons for leaving 1. Unsustainable operating losses and 2. Severe technical challenges working with struggling states. The Federal funding assistance faucet is shut off. Exchanges are going to have to redesign their organizations to more effectively accommodate insurers and take action on their concerns. Otherwise, the insurers will be taking their own action – walking out of the public exchange business.


Nichol, Peter. B. (2015j). Thought Leaders’s Corner: Will public Exchanges capture a materially higher number of enrollees who aren’t eligible for subsidies this open enrollment season? ? Health Insurance Marketplace News, 3(11), 1.

Worthy News. (2014). Federal Appeals Court Rules Obamacare Subsidies Illegal (online image). Retrieved October 19, 2015, from http://www.worthynews.com/17228-federal-appeals-court-rules-obamacare-subsidies-illegal
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Peter is a technology executive with 19 years of experience, dedicated to driving innovation, digital transformation, leadership, and data in business. He helps organizations connect strategy to execution to maximize company performance. He has been recognized for Digital Innovation by CIO 100, MIT Sloan, Computerworld, and the Project Management Institute. As Managing Director at OROCA Innovations, Peter leads the CXO advisory services practice, driving digital strategies. Peter was honored as an MIT Sloan CIO Leadership Award Finalist in 2015 and is a regular contributor to CIO.com on innovation. Peter has led businesses through complex changes, including the adoption of data-first approaches for portfolio management, lean six sigma for operational excellence, departmental transformations, process improvements, maximizing team performance, designing new IT operating models, digitizing platforms, leading large-scale mission-critical technology deployments, product management, agile methodologies, and building high-performance teams. As Chief Information Officer, Peter was responsible for Connecticut’s Health Insurance Exchange’s (HIX) industry-leading digital platform transforming consumerism and retail oriented services for the health insurance industry. Peter championed the Connecticut marketplace digital implementation with a transformational cloud-based SaaS platform and mobile application recognized as a 2014 PMI Project of the Year Award finalist, CIO 100, and awards for best digital services, API, and platform. He also received a lifetime achievement award for leadership and digital transformation, honored as a 2016 Computerworld Premier 100 IT Leader. Peter is the author of Learning Intelligence: Expand Thinking. Absorb Alternative. Unlock Possibilities (2017), which Marshall Goldsmith, author of the New York Times No. 1 bestseller Triggers, calls "a must-read for any leader wanting to compete in the innovation-powered landscape of today." Peter also authored The Power of Blockchain for Healthcare: How Blockchain Will Ignite The Future of Healthcare (2017), the first book to explore the vast opportunities for blockchain to transform the patient experience. Peter has a B.S. in C.I.S from Bentley University and an MBA from Quinnipiac University, where he graduated Summa Cum Laude. He earned his PMP® in 2001 and is a certified Six Sigma Master Black Belt, Masters in Business Relationship Management (MBRM) and Certified Scrum Master. As a Commercial Rated Aviation Pilot and Master Scuba Diver, Peter understands first hand, how to anticipate change and lead boldly.