Looking ahead to 2016
In the Illinois exchange, five individual plan carriers (out of ten total) have proposed rate increases of ten percent or more for at least some of their plans: Blue Cross Blue Shield of Illinois, Coventry Health Care of Illinois, Health Alliance Medical Plans, Humana, and Time Insurance Company.
Time had the highest proposed rate hike (42 percent), but its parent company – Assurant – subsequently announced that they are exiting the individual market nationwide, and will not participate in the upcoming open enrollment that starts November 1.
Blue Cross Blue Shield of Illinois proposed average rate hikes of 29 percent for their BluePrecision HMO plans, and 38 percent for their BlueChoice Preferred plans. The carrier outlined justification for their rate proposals, noting that this is the first year that accurate claims data (as opposed to educated guesses) has been available for actuaries to use when calculating rates.
The Illinois Department of Insurance has not yet published the proposed rate changes for the other five exchange carriers, and they’re in the process of reviewing all of the rates. The proposed rates won’t be finalized for several more weeks and could end up lower (or in rare cases, higher) than proposed.
CO-OP booms in second year
Notably, one of the carriers that has not proposed a double digit rate hike is Land of Lincoln Health, a CO-OP health plan that was established under ACA guidelines.
In 2014, Land of Lincoln Health struggled with low enrollment, with just 3,461 members at the end of 2014 (only about 4 percent of their target). But that has changed dramatically in year two. For 2015, Land of Lincoln Health lowered their premiums by 20 to 30 percent, and in most areas of the state, they offer the lowest-priced silver plans. As a result, their membership ballooned to 50,000 people by the end of the 2015 open enrollment period. The CO-OP currently has about 20 percent of the exchange market in Illinois, and about ten percent of the entire individual market in the state.
Several CO-OPs in other states followed a similar trajectory, lowering rates for 2015 and gaining significant market share. But in many cases, they’ve proposed relatively steep rate increases for 2016.
King v. Burwell – subsidies are safe
The long-anticipated outcome in the King v. Burwell case was revealed on June 25, when the Supreme Court ruled 6 – 3 that subsidies are legal in every state, regardless of whether the exchange is run by the state or federal government. Illinois uses the federally facilitated marketplace (FFM), so if the court had ruled that subsidies are only legal in state-run exchanges, 235,000 Illinois residents would have lost their subsidies. In addition, premiums in the entire individual market would have increased significantly if subsidies had been eliminated, because healthy people would have been more likely to drop their coverage due to the new, higher rates.
2016 rates were filed prior to the Court’s ruling in the King case, but the Illinois Department of Insurance had announced that if the subsidies were stuck down by the Supreme Court, carriers would have had two weeks from the date of the ruling to refile new – much higher – rates for 2016.
At ACAsignups, Charles Gaba estimated that striking down the subsidies would have resulted in unsubsidized average premiums in Illinois increasing from $336/month in 2015 to $504/month in 2016. Most Illinois exchange enrollees receive subsidies however, so the result for them would have been much more significant: Their premiums would have quadrupled from an average current (after-subsidy) premium of $125/month to $504/month next year.
As of Feb. 21, 349,487 Illinois residents had selected qualified health plans (QHPs) through HealthCare.gov. 50 percent were new to the exchange for 2015, and 78 percent qualified for premium subsidies. That put 2015 enrollment at about 160 percent of 2014 enrollment.
But some enrollees never paid their initial premiums, and some opted to cancel their coverage early in the year. As of the end of March, 293,661 people had in-force private plan coverage through the Illinois exchange. 79 percent are receiving premium subsidies, and 47 percent are receiving cost-sharing subsidies (only available with silver plans, for enrollees with incomes up to 250 percent of the poverty level).
Can you still enroll?
While 2015 open enrollment has ended, individuals who experience a qualifying life event can purchase insurance within 60 days of the event. Those who qualify for Medicaid or the Children’s Health Insurance Program (CHIP) can sign up anytime during the year, as can Native Americans.
Penalties for being uninsured in 2015 are the higher of 2% of annual household income or $325 per adult ($162.50 per child under 18).
No action on state-run exchange
Illinois runs its marketplace, Get Covered Illinois, as a partnership with the federal government. State residents use the federal marketplace, HealthCare.gov, to enroll.
Former Gov. Pat Quinn consistently supported a state-run exchange. A bill authorizing a state-run exchange passed the Illinois Senate in 2013, and there was hope the House might give its support during the 2014 fall veto session. However, sponsors did not have enough support to bring the bill to a vote.
Rep. Robyn Gabel had hoped the issue would gain traction, given that the U.S. Supreme Court was considering whether premium subsidies could be lawfully provided in states that don’t run their own health insurance exchange. By transitioning to a state-run exchange, Illinois would have secured ongoing subsidies for its residents regardless of how the Court ruled (ultimately, the Court deemed subsidies to be legal in every state, regardless of whether the federal government is running the exchange or not).
At this point, a state-run exchange is unlikely for the foreseeable future. The federal government is no longer providing new establishment grants, and Illinois would be challenged to fund startup costs on its own.
2015 rates up slightly on Get Covered Illinois
The Illinois Depart of Insurance summarized 2015 premium increases by metal level:
- Lowest gold plan average: 3.7 percent increase
- Lowest silver plan average: 2.6% increase
- Lowest bronze plan average: 11% increase
More than half of 2014 enrollees in Illinois selected a silver plan.
2015 participating insurers
More health plans are competing for business on the Illinois exchange for the 2015 plan year. The Illinois Department of Insurance announced that ten insurers are selling 410 health plans, including 17 options that are available statewide. For the 2014 plan year, six insurers offered 165 policies in Illinois.
Three new companies are participating in the Illinois marketplace for 2015: Time Insurance Company (Assurant Health), United Healthcare, and IlliniCare Health. IlliniCare Health is a partnership of Centene and several Chicago hospitals. Centene is a large player in the managed Medicaid market, and it entered the individual insurance market through the ACA marketplaces in several states in 2014.
Small business exchange
Illinois is one of five states where small businesses (those with between 2 and 50 employees) had early access to the federal Small Business Health Options Program (SHOP) online portal. Online enrollment functionality had been delayed so technical staff could work on fixing the marketplace used by individuals. Without the online function available, small businesses had been limited to working with a broker or by submitting a paper application to sign up for SHOP coverage.
Users in the early launch states experienced some problems with the SHOP according to The New York Times. Issues included some health plans not being displayed and glitches when using Firefox or Internet Explorer web browsers to access the site.
As of Nov. 15, 2014 the online SHOP was available in all states that use HealthCare.gov.
Nationally, SHOP enrollment has been limited according to a GAO report. As of June 2014, only about 76,000 people had enrolled through state-run SHOP exchanges; federal SHOP data was not available for the GAO report.
Illinois is delaying the launch of “employee choice” on SHOP exchange. The option allows employees of small businesses that use the SHOP to select from a range of plans rather than being limited to a single plan selected by their employer. The federal government let states that use the federal marketplace choose if they want to implement employee choice for 2015. Illinois is one of 18 states that is delaying implementation of employee choice.
A recap of 2014 enrollment
About 217,500 Illinois residents enrolled in qualified health plans (QHPs) during 2014 open enrollment and 468,000 have signed up for Medicaid as of Sept. 30. Get Covered Illinois announced that the state exceeded the initial enrollment target set by the federal government by 52 percent.
Of those Illinois residents who selected a QHP, 77 percent qualified for financial assistance, compared to 85 percent nationally. An HHS report showed the average monthly premium, after tax credits, for Illinois consumers was $105. Twenty-five percent of enrollees pay $50 or less per month after subsidies.
Twenty-nine percent of Illinois residents selected a bronze plan (20 percent nationally), 56 percent selected a silver plan (65 percent nationally), 15 percent selected a gold plan (9 percent nationally), 1 percent selected a platinum plan (5 percent nationally) and 0 percent selected a catastrophic plan (2 percent nationally). Thirty-one percent of Illinois enrollees were between the ages of 18 and 34.
History of the Illinois exchange
Former Gov. Pat Quinn’s administration announced in July 2012 that the Illinois marketplace would operate as a state-federal partnership. Quinn had hoped to leverage the partnership model as an interim step toward a state-run marketplace for the 2015 coverage year. However, a state exchange bill passed in the Senate in 2013 didn’t get a vote in the House. As noted above, there was some hope that exchange legislation will be considered during the fall 2014 session. However, the House did not take up the issue. Advocates fear it may be 2018 or later before the state takes over sole control of the exchange.
More than 685,000 Illinois residents enrolled in private insurance or Medicaid since October 2013, and the state’s uninsured rate in Illinois dropped more than 3 points according to a Gallup survey.
While the drop in the uninsured rate was good news, about 12 percent of state’s population remained uninsured after the first open enrollment period. In response, officials awarded nearly $26 million to 37 organizations to target groups that were hard to reach in 2014: Latinos, African Americans, and Millennials.
Get Covered Illinois hired Onion Labs to build a campaign to reach Millennials. The campaign featured the fictional Luck Health Plan and the tagline: “You’ll be okay. Probably.”
In January, Get Covered Illinois launched an ad targeting same-sex married couples. While the uninsured rate for low- and middle-income LGBT people dropped from 34 percent to 26 percent from 2013 to 2014, it is still much higher than the overall national average.
Illinois health insurance exchange resources
Get Covered Illinois
Illinois Health Matters
Information resource on health care reform
Health Care Assistance
Office of the Attorney General
877-305-5145 (toll-free nationwide) TTY: 312-964-3013
Serves residents enrolled in private health insurance
Office Consumer Health Insurance and the Ombudsman for the Uninsured
Illinois Department of Insurance
877-527-9431 (toll-free nationwide)
Serves residents who are uninsured as well as residents who have health insurance problems or questions.