Pent-up demand for various medical services has been identified among newer public exchange enrollees who deferred or avoided treatment because of financial constraints resulting from a lack of health insurance, notes the first in a series of research papers on so called preference-sensitive services.

The Society of Actuaries analyzed the claims experience of more than 17,000 newly insured individuals in Kansas in the first quarter of 2014 and nearly 70,000 others who were continuously insured in the Kansas All-Payer Claims Database. It was done through a data partnership with the Kansas Department of Insurance.

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Actuaries will need to keep a close watch on this phenomenon “as they make adjustments to models to estimate future costs,” according to Rebecca Owen, a health research actuary for the SOA who co-authored the report with Daniel Maeng, a research investigator for Geisinger Health System. “Since the implementation of the exchanges, and as insurers prepare to file rates for 2016, health actuaries around the country have been analyzing many factors, including available claims data, that affect the cost of insurance.” 

Kansas is one of seven states that received permission to conduct plan management activities to support qualified health plan certification in the federally facilitated marketplace. While Kansas has not expanded Medicaid under the Affordable Care Act, it allows for transitional policies that the SOA describes as having important implications on the types of residents who chose exchange coverage.

Newly insured individuals were found to be primarily older females with chronic diseases compared with individuals who had continuous coverage, according to the report. The SOA analysis also noted that the estimated overall increase in total cost of care for services that were in high demand was less than 3%, while the use of these treatments exceeded the expectation of differences due to demographics alone. New enrollees in 2013 also were less likely than those with continuous coverage to use these preference-sensitive services.

In addition, newly insured individuals in the Kansas’ public exchanges incurred higher catastrophic costs (i.e., more than $100,000) in the first quarter than the continuously enrolled population – driven in part by maternity costs. They also had more office visits and higher utilization rates for six procedures that patients tend to put off. They include knee arthroscopy, upper endoscopy, lower back pain surgery, magnetic resonance imaging or magnetic resonance angiogram, CT scans and gallstone surgery. Their use of one related area of study, dermatology, was actually lower.

While U.S. Census Bureau statistics show Kansas has a larger Caucasian population than the national average (87% vs. about 78%) and fewer residents living in poverty (13.7% vs. 15.4%), the SOA suggests its study as a whole still offers valuable insight.


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