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Newly-Insured Claims Data Show Pent-Up Demand for Preference-Sensitive Services

New research released today by the Society of Actuaries (SOA) provides an analysis of claims experience and data that has become available since the implementation of the Affordable Care Act (ACA) state and federal health insurance exchanges. The report examines the use of services – those that are likely to be deferred or avoided due to financial constraint because of a lack of insurance – by the newly insured enrolled in the Kansas exchange in the first quarter of 2014.

The study, the first in a series of reports to be produced through a data partnership with the Kansas Department of Insurance, reveals that new enrollees in the Kansas exchange appear to have used preference-sensitive treatments at a level that exceeded the expectation of differences due to demographics alone, suggesting pent-up demand for those services. According to the SOA analysis, the estimated overall increase in total cost of care due to the pent-up demand for these preference-sensitive services is less than three percent.

"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," said Rebecca Owen, FSA MAAA, a health research actuary at the SOA who co-authored the report. "It will be especially important for actuaries to examine available claims data for the persistence of pent-up demand as they make adjustments to models to estimate future costs."

Additional findings from the study include:

  • New enrollees to the Kansas exchange, with no prior coverage, were more likely to be female and older than existing individual members with continuous coverage and were also more likely to have chronic disease;
  • In the first quarter, the newly insured enrolled in the Kansas exchange had higher catastrophic costs (members with more than$100,000 in costs for the first quarter) than the continuously enrolled population, due in part to maternity costs;
  • The newly enrolled population used office visits at a much higher rate than the continuing population did, and more of the visits were for established patients; and
  • Utilization rates of seven specific procedures were higher among the newly enrolled in Kansas exchange, while the utilization rate of one – dermatology – was lower.

As more data about the experience of people in the Kansas exchange becomes available, the SOA will produce additional research that builds on the work before, and subsequent studies will provide a more in-depth analysis of the pent-up demand phenomenon.

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