On a recent frosty morning, an article caught my eye. Like the never-ending snowstorms in the movie Frozen, it was another in a series of news stories chronicling worries about whether certain groups of people – in this case, women – are going to destabilize the risk pool in the new health insurance marketplaces.
Women of childbearing age, as every good actuary knows, are more likely to incur higher health care costs, although the degree to which gender-based rate differences could be actuarially justified has been subject to debate. The latest enrollment data from the health insurance marketplaces show that women have been more likely to enroll, by a margin of 55 to 45 percent. Hence the hand-wringing about whether the disproportionate enrollment of women will lead to an unbalanced risk pool in the marketplaces and drive up costs. This follows the rash of stories about whether too many older people, and not enough younger people, will enroll to make for a balanced risk pool.
Of course, none of this should come as a big surprise. Until the Affordable Care Act’s new insurance market reforms went into effect on January 1st, women were also more likely to have been charged more for health coverage based on their gender or have more difficulty finding essential care, such as maternity coverage. Why have women,among others at higher risk of incurring relatively higher health care costs, been at the receiving end of this “deflect and deny” method of risk selection? Is it because the people who work at insurance companies are cold-hearted and mean? Of course not – no more than the misunderstood snow queen in Frozen is the “monster” that some would make her out to be.
Like so much else in health care, it’s about the incentives – and until now, the health insurance industry has not had any incentive to enroll people who were sicker or at higher risk, because there were no mechanisms to establish a level playing field that promotes competition based on quality and value instead of risk avoidance. Enter the Affordable Care Act, which, for the first time, establishes such mechanisms nationwide: a requirement that insurers offer coverage to any individual and that individuals obtain coverage; tax credits to make coverage more affordable and encourage enrollment by healthy and sick alike; and risk mitigation strategies in the form of the “three R’s” for those insurers that incur higher than expected costs or attract a higher-risk mix of enrollees. But here’s the catch: if these mechanisms unravel, the gates to affordable health care will close again. If the gates stay open, millions of people who needed health care before and couldn’t get it will have a path to receiving the care they need. Bottom line: if people at higher risk of needing health care are now gaining access to that health care, that was the point. And there are lots of ways to boost enrollment by lower-risk individuals and balance the risk composition of the marketplaces.
But there is more to the delivery of health care today than these mechanisms to level the playing field and open the doors to coverage. People who are high-risk today are not necessarily doomed to getting sick tomorrow. Insurers and other payers have sophisticated analytics and other tools at their disposal to identify high-risk individuals and make sure they get the right care—and don’t get the wrong care –to help contain costs. You have a lot of women policyholders of childbearing age? Make sure they’re getting evidence-based maternity care and not unnecessary, more expensive care like early elective labor inductions that put both moms and babies at risk. You have a lot of smokers enrolled? People who quit smoking dramatically cut their risk of coronary heart disease within just one year after quitting. You have a patient population at high risk of diabetes? Get them enrolled in a proven program like the Diabetes Prevention Program, which has demonstrated significant reductions in participants’ risk of getting Type 2 diabetes.
My point here is that today does not have to equal tomorrow. People can change. And, the fact that insurers now have to take all comers could mean that we start thinking about the risk of illness, and its mitigation, a little differently.
So, has the United States health care system already been transformed from the “deflect and deny” model of health insurance to “Welcome, and we’ll take care of you”? Not quite yet. But the gates to comprehensive health insurance—heretofore closed not just to many women, but to lots of others—are now open.
Author’s note: If you came with me this far despite the Disney references, congratulations–and I apologize to those of you who now have certain songs stuck in your head. Stay warm!