2016 rates – a second look
On June 1, Healthcare.gov released proposed rate increases of ten percent or more on their rate review tool. The fact that the tool only shows proposed rate hikes that make it into double-digit territory has certainly been cause for some confusion (this article by Charles Gaba is a great explanation).
While six of the nine carriers that sell individual plans in the Georgia exchange have requested rate increases of ten percent or more for at least some of their plans, the state has outside actuaries reviewing the rate proposals in an effort to lower them – a process that will take most of the summer. And industry officials in Georgia note that “many plans” in Georgia have submitted 2016 rate increases under ten percent – but those don’t show up on Healthcare.gov’s rate review tool.
It’s likely that the overall weighted average rate hike will be higher in 2016 than it was this year (when the average was just one percent), but we won’t know the final rates until the end of the summer. But for most people, subsidies will pick up a good chunk of the rate hikes – although it will be particularly important for enrollees to shop around during open enrollment rather than simply letting their coverage auto-renew.
Time insurance company has some particularly eye-popping rate proposals for 2016, with premium increases in the neighborhood of 60 percent. But it’s worth noting that Time/Assurant subsequently announced that they are exiting the individual insurance market, and will not be participating in the upcoming open enrollment period.
At the end of 2015 open enrollment, 541,080 Georgians had signed up for qualified health plans (QHPs) through HealthCare.gov, but not all of them paid their initial premiums or opted to keep their coverage long-term. By the end of March, there were 452,815 people with in-force coverage through the Georgia exchange.
91 percent of them are receiving premium subsidies, and nearly 68 percent are receiving cost-sharing subsidies (available to people with household incomes up to 250 percent of poverty, as long as they select a silver plan). Georgia’s subsidy utilization is higher than the national average; nationwide, 85 percent of exchange enrollees are receiving premium subsidies, and 57 percent are receiving cost-sharing subsidies.
Fifty-five percent of Georgia enrollees were new to the marketplace in 2015. Various experts indicated that enrollment exceeded expectations. According to Kaiser, 50 percent of Georgians who were eligible to enroll through the marketplace have selected a health plan.
More than 350,000 of Georgia’s enrollees were from the Atlanta/Sandy Springs/Roswell metropolitan area. Only the Miami/Fort Lauderdale/West Palm Beach area had higher enrollment than the greater Atlanta area.
King v. Burwell – subsidies are safe
Fortunately for exchange enrollees in Georgia – as well as hospitals, insurance carriers, and people who purchase coverage without subsidies – the Supreme Court ruled on June 25 that subsidies are legal in states like Georgia that use Healthcare.gov. If subsidies had been struck down, 415,000 people in Georgia would have lost their subsidies and their coverage would likely have become unaffordable.
It would also have become unaffordable for many people who aren’t receiving subsidies, as the entire individual market would likely have seen a rate increase of 55 percent – in addition to the regular annual rate increases – if subsidies had been eliminated. Since coverage would have become unaffordable for so many, healthy enrollees would have been likely to drop their coverage, leaving a sicker pool of insureds and triggering a “death spiral.” It was possible that the individual market could have shrunk in size by 70 percent if subsidies had dried up.
Fortunately, the King case is no longer a specter over the individual insurance market, and subsidies will continue to be available when open enrollment begins again in November.
Can you still sign up?
Open enrollment for 2015 has ended, but under certain circumstances, you may be able to get health insurance before the next open enrollment period starts in November.
- If you have a qualifying life event, you are eligible for a special enrollment period. You have 60 days from the date of the event to sign up or change your coverage.
- If you are a Native American, you can sign up through the marketplace anytime during the year.
- If you qualify for Medicaid, you can enroll anytime during the year.
Otherwise, open enrollment begins again on November 1, for coverage effective January 1, 2016.
Insurers joining Georgia marketplace
Georgia consumers shopping for health insurance on the marketplace have nearly double the number of insurers to choose from in 2015 as they did in 2014. In addition, three companies — as opposed to one last year — are selling policies statewide. A health insurance expert at Georgia State University says the influx of statewide competition will help reduce disparity in premium costs seen among different regions of the state.
Nine insurers are participating in the Georgia health insurance marketplace for 2015, including four who are new to the exchange this year. The returning companies are Alliant Health Plans, Blue Cross, Humana, Kaiser Permanente, and Peach State Health Plans. The new entrants to the marketplace are Cigna, Coventry, UnitedHealthcare, and Time Insurance.
2015 premiums up just 1 percent
Georgians are currently paying an average of 1 percent more for health plans on the marketplace compared to 2014. The overall average is weighted and considers all metal tiers. The average cost of bronze policies is down 4 percent, the average cost of silver and gold policies is down 1 percent, and the average cost of platinum policies is up 33 percent.
Given that southern Georgia had some of the highest premium costs in the nation for 2014, the modest average increase is welcome news for the second year of Obamacare.
Facts and figures from 2014 enrollment
More than 316,500 Georgians enrolled in qualified health plans (QHPs) during 2014 open enrollment. That’s nearly 30 percent of the estimated 1,063,000 Georgians considered eligible to enroll in the insurance marketplace by the Kaiser Family Foundation.
Among Georgia residents selecting a QHP, 87 percent qualified for financial assistance, compared to 85 percent nationally. A report released in June 2014 by the U.S. Department of Health and Human Services showed the average monthly premium, after tax credits, for Georgia consumers was $54. Sixty percent of enrollees pay $50 or less per month after subsidies. Georgia’s $54 average is the second-lowest in the nation — after Mississippi, where the average monthly premium after subsidies is just $23.
Ten percent of Georgia residents selected a bronze plan (20 percent nationally), 73 percent selected a silver plan (65 percent nationally), 6 percent selected a gold plan (9 percent nationally), 9 percent selected a platinum plan (5 percent nationally) and 2 percent selected a catastrophic plan (2 percent nationally). Thirty-one percent of Georgia enrollees were between the ages of 18 and 34.
Background on the marketplace in Georgia
Georgia opted to use the federal health insurance marketplace, HealthCare.gov. State government officials such as Gov. Nathan Deal and Insurance Commissioner Ralph Hudgens vocally opposed the Affordable Care Act. Hudgens implemented a requirement that navigators, who help consumers use the marketplace, pass the test that insurance agents are required to take. That requirement is much more stringent than required by the health care reform law, and Hudgens openly stated it was intended as obstructionism. At the end of its 2014 session, the Georgia Assembly passed a bill that prohibits establishing a state-run marketplace, disallows the use of taxpayer money for navigator programs, and forbids government employees from advocating for Medicaid expansion.
Georgia’s director of Enroll America, Dante McKay, said that lack of access to navigators hurt enrollment in rural Georgia counties in 2014. McKay also said the amount of federal funding Georgia received for navigators was among the lowest of all the states on a per uninsured person basis in 2013 — and the amount decreased in 2014.
Georgia has not expanded its Medicaid program. Gov. Deal has repeatedly said Medicaid expansion would cost the state too much, and the General Assembly passed bills that give it authority over any changes to the state’s Medicaid rules. By not expanding Medicaid, the state is leaving up to 282,000 low-income residents in a coverage gap — unable to qualify for either Medicaid or subsidies through the marketplace.
Georgia’s uninsured rate in 2014 was 19.1 percent; the national average was 13.8 percent.
Georgia health insurance exchange links