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District of Columbia health insurance exchange

Insurers suing over funding plan

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  • By
  • healthinsurance.org contributor
  • September 11, 2014

The District of Columbia’s health insurance marketplace, DC Health Link, was identified as the nation’s second most expensive on a per enrollee basis, and its long-term funding plan has drawn a lawsuit.

DC Health Link’s funding plan comes as federal grant money for marketplace operational expenses is ending. All state-run exchanges must be self-sufficient by 2015. A number of state-run exchanges have placed a tax on premiums sold through the exchange.

However, given the District’s small population, a premium tax would have to be very high to sustain DC Health Link — 17 percent according to a Washington Post article. Accordingly, the D.C. Council approved a one percent tax on premiums for all health-related insurance plans sold in the District — not just those sold on the exchange. Many insurers that sell health-related insurance products outside of the marketplace are vehemently opposed to the plan, and the American Council of Life Insurers filed suit claiming the tax is unconstitutional and a violation of the ACA.

As the funding debate continues, insurers are getting ready for the 2015 open enrollment period, which begins Nov. 15. Insurers filed preliminary 2015 rates in June for a total of 227 individual, family and small-business plans. The rates are under review and will be posted on the District Department of Insurance, Securities and Banking website when finalized.

All of the insurers that sold policies through DC Health Link in 2014 plan to participate again in 2015. Aetna, CareFirst BlueCross BlueShield and Kaiser Permanente will again sell individual and family plans, while those three plus UnitedHealthcare will sell polices through the small-business or SHOP exchange.

UnitedHealthcare proposed rates that are eight percent lower than 2014 rates, while Aetna and Kaiser included a mix of increases and decreases. CareFirst proposed increases for all of its plans, but did drop the amount of its proposed increases in a revised filing in July. CareFirst dominated marketplace sales in 2014.

DC Health Link announced 2014 enrollment figures through July 9: 12,530 people purchased individual or family coverage, 13,779 enrolled through the SHOP marketplace, and 24,720 people qualified for Medicaid. In total 51,059 have enrolled in coverage since open enrollment began on Oct. 1, 2013.

Nearly all of the DC Health Link SHOP enrollments have been members of Congress or Congressional staffers. DC Health Link is the designated marketplace for members of Congress and their official office staff following a rule issued by the Office of Personal Management, which oversees benefits for federal employees. Congress and their staffers are eligible to continue receiving the federal employer contribution toward their coverage so long as they select a plan through DC Health Link.

Use of the SHOP is mandated for District small businesses in a decision that has drawn strong criticism and pushback. Exchange officials said the mandate was necessary given the small population in the District. Without requiring small employers to participate, officials said, enrollment simply wouldn’t be high enough to sustain exchange operations. Small business protested the decision. While the board seemed intent on maintaining the requirement, it did vote to allow some businesses until 2015 to comply. The D.C. City Council in June 2013 unanimously passed temporary legislation supporting the mandate.

At 45 percent, the District led the nation in the percentage of people ages 18 to 34 signing up for private health plans during 2014 open enrollment; see the HHS enrollment report. Nationally, the figure was 28 percent. The selection of health plans was quite evenly spread across the metal levels in the District. Twenty-nine percent of health plan enrollees selected bronze plans, 25 percent selected silver plans, 22 percent selected gold plans, and 19 percent selected platinum plans. An additional four percent selected catastrophic plans, which are available only to those under 30 or those who qualify for a hardship exemption. Nationally, enrollment is heavily skewed to silver plans, with 65 percent of enrollees selecting these mid-level plans.

The District of Columbia was an early adopter in moving to implement a health insurance exchange. The Health Reform Implementation Committee (HRIC), formed at the direction of Mayor Vincent Gray, issued its final recommendations in October 2011. The D.C. City Council adopted many of the committee’s recommendations and passed a bill to create the District of Columbia Health Benefit Exchange Authority, which Gray signed it into law in January 2012. The District of Columbia received federal approval to operate a state-based exchange in December 2012. In June 2013, the exchange was rebranded as DC Health Link.

District of Columbia health insurance exchange links

DC Health Link

DC Health Benefit Exchange Authority

Implementing Health Insurance Exchanges: District of Columbia
The Henry J. Kaiser Family Foundation overview of the District of Columbia’s progress toward creating a state health insurance exchange.