Open Enrollment and Health Care Reform
Our plan just completed its annual open enrollment. Members are permitted to change medical or dental plans; to add or remove dependents, and change life insurance options.
Open enrollments highlights certain flaws in our current system.
The logic of an open enrollment is compelling. The object of any insurance is to spread the cost of any risk over time and over as many people as possible. Open enrollment helps to spread the risk over time.
The risk of health care is different than other risks that we insure against.
We buy life insurance to insure against death; auto insurance to protect against an automobile accident; homeowners insurance to shield against damage to our home.
Those hazards (the technical term) generally occur without warning. No one is likely to approach their insurance agent to buy auto insurance because they anticipate an auto accident in the near future.
Illness, on the other hand, can offer some warning. Someone may experience symptoms and has not seen a doctor. The doctor may have recommended expensive surgery. Or maybe it’s just a young couple planning to start a family.
Open enrollment is the only opportunity that insurers have to spread risk over time. By insisting that people enroll only during a specific time period, the insurer reduces the risk that someone is only enrolling because they know they have an approaching medical expense.
It may seem unfair to the person with an immediate and pressing need. But to the others in the group who ultimately foot the bill, it makes perfect sense. It is one reason why a mandate – an employer mandate or an individual mandate – makes sense.
Medicare has its open enrollment rules. Their annual open enrollment for Medicare Part B is from January through March each year and is not effective until July 1 of that year.
Open enrollment is expensive
Participants have only one opportunity to make changes each year; therefore, communication is very important. We produce an attractive communication piece to mail to our 10,000 plus participants. We pay lawyers and consultants to review it, a graphic designer to lay it out, and the printer to print and mail it.
Over time we have used specialized mailings to targeted audiences that may need special attention.
The open enrollment period is a month long. The carriers have opportunities for member outreach. Other plans provide even more opportunities for carrier outreach. The carriers also have communications pieces tailored to the specifics of that group plan. In addition, they usually have some kind of attention grabbing (they hope) giveaway for the members. All of this costs money.
We do not have a web site yet for open enrollment but hope to perhaps as soon as 2010. That too will be an investment.
Yet every year, just days after the close of open enrollment, someone will call our office to make a change. The rules have a purpose within the logic of our current system. As unpleasant as it is, we must tell those people to wait until next year.
The choices are illusory
To appreciate what’s wrong with open enrollment, juxtapose it with an “ideal” – once and done enrollment. For most of us, something similar is the reality. People stay in one job. They do not frequently change their insurance.
Conservatives often support the status quo with arguments about freedom of choice. But what is the freedom of choice that open enrollment offers. The choices have been preselected by the plan sponsor. The choice is among restricted groups of network providers.
Network providers are not locked into the same contract period that the participant is. So a member who chooses a carrier because his or her doctor is in that network, may learn shortly afterwards that the doctor intends to leave the network. Usually they are dissatisfied with the reimbursement. Doctors complain about rules, but they act on reimbursement. Recently we had a doctor leave our IPA model HMO for our staff model HMO. She announced the move a month after the close of our open enrollment.
The alternative could be health care as an entitlement, health care at birth, health care by virtue of citizenship. This would eliminate the expense of open enrollment, the confusion of open enrollment, the misguided decisions of open enrollment.
In addition, it would provide opportunities for those who change jobs frequently, the marginally employed, seasonal employees, freelancers and the very small entrepreneurs.
It would open doors instead of closing doors. It would enable freedom of choice among health care providers instead of among a limited number of limited insurance networks.
It would open enrollment.
