King v. Burwell – subsidies are safe
With the Supreme Court’s landmark ruling that subsidies are legal in every state, regardless of whether the exchange is run by the state or federal government, subsidies are now safe for 164,000 people in Indiana. The Kaiser Family Foundation had estimated that their premiums would have increased by 271 percent if the subsidies had been eliminated.
Not only will subsidies remain intact, but the individual market in Indiana will not be subject to the massive destabilization that would have occurred had the King plaintiffs prevailed and subsidies been eliminated. If that had happened, rates in the individual market for people who were already paying full price for their coverage would have increased by up to 90 percent, and the individual market pool size would have shrunk by 70 percent.
Healthcare.gov’s rate review tool only shows proposed rate increases of ten percent or more, and it’s notable that in Indiana, only one exchange carrier in the individual market has proposed double digit rate hikes for 2016. Physicians Health Plan of Northern Indiana has requested an average rate increase of 14.5 percent for next year, although the rates have not yet been approved by regulators.
PHP cited the phasing out of the ACA’s reinsurance program, along with poorer-than-expected health among people who have already enrolled. This is the same general theme echoed nationwide by carriers justifying significant rate increase proposals for 2016.
But the only other plans that show up on the rate review tool are off-exchange individual coverage from Humana, and small group plans from US Health and Life. That means that the rest of the individual carriers in the exchange have proposed rate changes under ten percent for 2016. Rates won’t be finalized for another few months, and open enrollment begins November 1, for coverage effective January 1.
According to the U.S. Department of Health and Human Services (HHS), 218,617 Hoosiers selected qualified health plans (QHPs) during 2015 open enrollment. The Kaiser Family Foundation estimates that 43 percent of eligible Indiana residents took advantage of the opportunity to purchase health insurance.
Ongoing chance to enroll
While the 2015 open enrollment period has ended, various individuals still have opportunities to sign up for coverage before the next open enrollment period:
- Individuals who experience a qualifying life event are entitled to a 60-day special enrollment period.
- Native Americans can enroll anytime during the year.
- Enrollment in Medicaid and the Healthy Indiana Plan (HIP) is open year-round.
Modest increase in 2015 premiums
2015 premiums are up about five percent on average, according to an Indiana Department of Insurance representative. A study by The Commonwealth Fund matched that estimate. The 2015 increase is much more modest than in the years leading up to the passage of the Affordable Care Act.
Indiana residents have many more choices on the federal marketplace for 2015: more insurers are offering more plans. The number of insurers more than doubled, going from four to nine. And, the number of available plans jumped from 278 to 975.
According to Atlantic Information Services, nine insurance companies are selling individual health insurance through the Indiana marketplace in 2015. Anthem BCBS, Coordinated Care, and Physicians Health Plan are returning from 2014, and All Savers, Caresource, IU Healthplans, MDwise Marketplace, Southeastern Indiana Health Organization, and Time/Assurant are new for 2015. Note that not all insurers offer plans in all counties.
SHOP for small businesses
Businesses with fewer than 50 full-time employees can now enroll online in the Small Business Health Options Program (SHOP). Small businesses can sign up on the SHOP throughout the year; there isn’t a specific open enrollment period like there is for the individual marketplace.
In Indiana and 13 other states that use the federal exchange, small employers can offer “employee choice.” Under this option, employee can choose among health plans within a single metal level selected by the employer.
Penalties increase for going without coverage
The penalty for people who don’t have health insurance 2015 tax season rolls around. Those who don’t qualify for an exemption will have to pay the greater of:
- 2% of annual household income. The maximum penalty under this calculation method is the national average premium for a bronze plan, which is just over $3,000 according this Commonwealth Fund analysis.
- $325 per adult or $162.50 per child under 18. The maximum penalty per family using this method is $975.
Use this penalty calculator to see how much you may have to pay if you don’t have health insurance.
How many people enrolled in 2014?
During 2014 open enrollment, 132,423 Hoosiers signed up for qualified health plans, according to federal government reports. Eighty-nine percent qualified for financial assistance. In addition, 95,495 people qualified for Medicaid or the Children’s Health Insurance Program (CHIP) under existing eligibility rules (i.e., not through Medicaid expansion).
Indiana’s uninsured rate dropped from 15.3 percent in 2013 to 13.6 percent in 2014, according to Gallup-Healthways poll.
How Indiana approached exchange implementation
Indiana is among the 26 states that opted to use the federal health insurance marketplace, HealthCare.gov. While former Gov. Mitch Daniels was a critic of the Affordable Care Act, he refrained from making a final decision about the state’s marketplace and asked the three gubernatorial candidates for their opinions. Following the election, then Gov.-elect Mike Pence weighed in and rejected both the state-run and partnership models.
In 2014, Indiana Attorney General Greg Zoeller and 39 school districts filed a suit challenging premium subsidies in the state as it does not operate its own health insurance exchange. A U.S. District Court judge has delayed ruling on the suit, given that the U.S. Supreme Court is taking up the issue in King v. Burwell. The U.S. Supreme Court will hear the case March 4, 2015, and likely announce its decision by late June 2015.
In January 2015, several state representatives introduced HB1479 to “prohibit any agency of the state from assisting in the enforcement of the Patient Protection and Affordable Care Act.” The bill would prohibit Indiana insurance officials from enforcing violations of the Affordable Care Act and allow state residents who pay a federal tax penalty for not having health insurance to deduct the amount on their state taxes. The bill needs to pass in the House Ways and Means Committee before it could be taken up in the full House.
In January 2015, Indiana received federal approval of its waiver for Medicaid expansion. The Healthy Indiana Plan, or HIP 2.0, requires most newly eligible beneficiaries to contribute to a health savings account (HSA) and to pay co-payments for emergency room visits for non-emergency care. HIP 2.0 is fairly complicated, with various contribution and benefit levels based on income and whether or not a beneficiary makes the required HSA contribution.
Indiana began accepting HIP 2.0 applications immediately after receiving approval, with coverage effective Feb. 1. Indiana officials estimate 350,000 are eligible for the program. According to a state press release, the approval of HIP 2.0 replaces traditional Medicaid coverage for Indiana’s non-disabled, non-elderly adults.
Indiana health insurance exchange links
State Exchange Profile: Indiana
The Henry J. Kaiser Family Foundation overview of Indiana’s progress toward creating a state health insurance exchange.
Indiana Department of Insurance
Assists consumers who have purchased insurance on the individual market or who have insurance through an employer who only does business in Indiana.
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