Thursday, October 8, 2015

The Health Insurance Death Spiral: Is High Health Insurance Exchange Use An Early Symptom?

According to the White House, the health insurance exchange glitches are a symptom of high demand from a grateful citizenry eager to embrace Obamacare. While articles like this and this suggest that sloppy and amateurish programming is really behind the website crashes, the Disease Management Care Blog is concerned that early high demand - if it exists - could be an early sign of a coming insurance death spiral.

"Death spirals" occur when persons with high levels of risk disproportionately enter an insured population.  When that happens, premiums have to rise to match the increased expenses. That, in turn, causes persons with lower risk to drop their insurance, leading to an even higher proportion of high risk individuals, who drive prices even higher.

The DMCB intuitively doubts that the early high demand described by the White House is the result of healthy latte-sipping millenials and young invincibles having nothing better to do with their web-surfing time.  Rather, the persons most likely to be in a rush to get into the web site are persons who really need insurance.  Those would be the ones facing huge health care bills.
Another indication is the relative lack of the standard individual anecdote or "ledes" in media reports that hook the reader into paying attention.  Used by politicians and journalists alike, ledes put a "human face" on a narrative by bridging the personal and the policy.   

Supporters of exchanges would probably like to see something ledes along the lines of...

For years, 25 year old Ivanna Ceeadoc could only lurk outside the local health clinic and watch helplessly as her friends from the coffee shop down the street got free health communications from the nurse practitioners within.  But after using the health insurance exchange....


Until he signed up in the health insurance exchange, part-time jazz drummer and retail specialist Hank Erinfersumburgers never had to see a health care provider. Previously unaware of a bleak future of fast food and tight clothes, Hank's zero dollar co-pay now lets him see a dietician and have enough money left over for a lunch......

Young Ivanna and Hank haven't made an appearance in the national health insurance exchange narrative because they probably aren't part of the story.  More likely, it's persons in their 50's and early 60's who have been hold they need a joint replacement, an angioplasty or back surgery....

 Ima Medeesazter was looking at a stack of medical bills a mile high.  Her surgeons' plans included weeks in a hospital costing her hundreds of thousands of dollars. Ima put things off, but now that she used the exchange, she can look forward to getting to know her ICU nurses really well.......

Even more worrisome: this astonishing statement by HHS Administrator Kathleen Sebelius that she "doesn't know" how many have enrolled in health insurance since the October 1 opening date.  If the experts running the shop are unaware the Insurance 101 principle of knowing who and why persons are signing up for health insurance, they have no idea about the spiral threat.

Image from Wikipedia

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