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Alabama health insurance exchange

United joining Alabama exchange

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  • By
  • healthinsurance.org contributor
  • September 15, 2014

Competition on the Alabama marketplace will increase for 2015 as UnitedHealthcare begins selling policies on the exchange. Prior to 2015, health plans were available from United only outside the marketplace. United plans to offer plans through the exchange in all 67 Alabama counties.

Blue Cross and Blue Shield of Alabama, which dominates the health insurance market in the state, and Humana sold individual health insurance through the federal marketplace in Alabama for 2014. According to HHS, Alabama consumers had the fewest choices among the 36 states with partnership or federally facilitated marketplace for 2014 coverage. Historically, Alabama’s health insurance market has been considered one of the least competitive in the nation.

2015 rates for Alabama have not yet been announced. While conventional wisdom says that limited competition like that seen in Alabama results in higher rates. However, an Urban Institute publication says that wasn’t the case in Alabama in 2014, and that “increased enrollment and a more stable risk pool” should work against big increases for 2015.

Nearly 98,000 Alabama residents signed up for qualified health plans (QHPs) during 2014 open enrollment. That was about 21 percent of estimated 464,000 people eligible to use the marketplace, according to the Kaiser Family Foundation. Nationally, about 28 percent of eligible people actually enrolled in a health plan through the ACA marketplaces. In addition, Kaiser also reported 22,564 people qualified for either Medicaid or the Children’s Health Insurance Program (CHIP) under existing eligibility criteria.

Alabama’s uninsured rate dropped 2.6 percentage points following the 2014 “Obamacare” open enrollment period, falling to 15.1 percent as of mid-2014 based a Gallup survey. The 2.6 point drop is slightly above the average decrease seen in other states that defaulted to the federal exchange and/or did not expand Medicaid in 2014.

The federal government operates the health insurance marketplace in Alabama, based on Gov. Robert Bentley’s November 2012 decision against a state-run marketplace. Bentley cited annual operating costs of up to $50 million as his reason for opting for a federally operated exchange. Bentley also ruled out an expansion of Medicaid in the state.

The decision against a state-run exchange came somewhat as a surprise. While the Republican governor consistently opposed many provisions of the Affordable Care Act, he repeatedly expressed support for a state health insurance exchange. He supported exchanges during his campaign for governor, and as governor, he used an executive order to establish the Alabama Health Insurance Exchange Study Commission. In November 2011, that commission unanimously recommended Alabama implement a state-run exchange. However, bills to establish a state-run exchange failed to pass in both the 2011 and 2012 sessions.

An August 2014 study published by the Urban Institute shows the impacts of not expanding Medicaid. For the low income, uninsured Alabamians, the decision against Medicaid expansion means 254,000 people will not qualify for Medicaid coverage through 2016. In terms of financial impact, the authors calculated that while Alabama would spend $1.08 billion to expand Medicaid over a ten-year period, the state is losing out on $14.4 billion in federal spending and state hospitals are losing $7.0 billion in reimbursement over the same period.

Gov. Bentley’s position against Medicaid expansion has become the subject of campaign ads, editorials, billboards, and websites. A coalition of health care organizations and advocacy groups, Alabama’s Best, is also advocating for Medicaid expansion.

Alabama health insurance exchange links

HealthCare.gov
800-318-2596

State Exchange Profile: Alabama
The Henry J. Kaiser Family Foundation overview of Alabama’s progress toward creating a state health insurance exchange.

Executive Order establishing Alabama Health Insurance Exchange Study Commission