Subsidies safe for 66,000
The much-anticipated Supreme Court ruling on King v. Burwell was announced on June 25, and subsidies are now safe for millions of Americans in states – like Kansas – where the federal government is running the exchange (Healthcare.gov). At ACAsignups, Charles Gaba had estimated that 66,000 people in Kansas would have lost their subsidies if the Court had ruled that subsidies could only be provided by state-run exchanges.
But even those who currently pay full price for their health insurance would have seen dramatic rate increases if subsidies had been eliminated. The American Academy of Actuaries estimated that rates in the entire individual market in Healthcare.gov states would have increased by about 35 percent if the King plaintiffs had prevailed. And the Urban Institute put the figure even higher, predicting 55 percent rate increases market-wide if subsidies had been eliminated. And those are just the rate hikes that would have resulted from the elimination of subsidies… they would have been in addition to the normal annual rate increases based on medical cost growth.
Fortunately for the people of Kansas – along with the health insurance carriers and medical providers – the Court ruled that subsidies are legal in every state, regardless of whether the exchange is run by the state or federal government.
Six companies have submitted proposals for on-exchange individual plans to the Kansas Insurance Department for 2016, up from five carriers in 2015. Carriers in Kansas have filed proposals to offer a total of 97 plans on the Kansas exchange (75 individual, and 22 small group). In 2015, there were 64 individual plans available, and 18 small group plans.
All of the carriers that currently offer individual plans in the Kansas exchange (Blue Cross Blue Shield of Kansas City, Blue Cross Blue Shield of Kansas, Blue Cross Blue Shield Kansas Solutions, Coventry Health and Life, and Coventry Health Care of Kansas), have proposed rate increases of ten percent or more for at least some of their plans, so they show up on Healthcare.gov’s rate review tool.
Across the full individual and small group market in Kansas (including both on and off-exchange plans), proposed rate changes vary from a decrease of 0.4 percent, to an increase of nearly 38 percent. The Kansas Insurance Department has warned that rate increases should be expected for 2016, but the rates will not necessarily be approved as-is. The state Insurance Department will finalize rates by August 25, and plans will be available for purchase starting November 1, with coverage effective January 1, 2016.
The majority of exchange enrollees in Kansas are receiving premium subsidies, which will offset a significant portion of the rate increases in 2016. This is contingent on consumers being willing to shop around during open enrollment however, as subsidies can change from one year to another if the price of the second-lowest-cost silver plan changes.
Health and Human Services (HHS) reported 96,197 Kansans selected private health insurance through HealthCare.gov during 2015 open enrollment. According to estimates by Kaiser, about 39 percent of Kansans who were eligible to enroll via the marketplace in 2015 actually selected a health plan. The final 2015 open enrollment report shows that 52 percent of Kansas enrollees were new consumers. Twenty-six percent of Kansas enrollees were between the ages of 18 and 34; in all HealthCare.gov states, 28 percent of enrollees fell into the 18-to-34 bracket.
But by the end of March, the total number of people with in-force coverage through the Kansas exchange had dropped to 85,490. Attrition is a normal part the individual health insurance market, as not all enrollees pay their initial premiums, and some insureds cancel their coverage for one reason or another (sometimes simply because they receive an offer of coverage from an employer instead).
Of the Kansas residents whose exchange coverage was in-force on March 31, just under 82 percent qualified for premium subsidies compared to 85 percent nationwide.
Special opportunities to enroll
While 2015 open enrollment ended Feb. 15, there are still some limited opportunities for individuals to get coverage before the 2016 open enrollment period begins in November 2015. Consumers who experience a qualifying event, such as getting married, are eligible for a 60-day special enrollment period. Native Americans or Alaska Natives can sign up for private coverage throughout the year. Enrollment for Medicaid and the Children’s Health Insurance Program (CHIP) is also open all year long.
Five insurers participating in 2015 exchange
Blue Cross and Blue Shield Kansas Solutions, an HMO and a subsidiary of Blue Cross Blue Shield of Kansas, joined the 2015 marketplace. The new entrant joins four other insurance companies that participated in the exchange in 2014: Blue Cross and Blue Shield of Kansas, Blue Cross of Kansas City, Coventry Life and Health, and Coventry Health Care of Kansas.
How much does insurance cost in 2015?
2015 premiums on the Kansas marketplace are up just 4 percent from 2014 rates, according to a comprehensive study completed by The Commonwealth Fund. Nationally, rates are flat. However, the 0 percent average increase masks 10+ percent increases in 10 states and 10+ percent decreases in 14 states.
Below average enrollment in 2014
During the first open enrollment period, 57,013 Kansans enrolled in qualified health plans and nearly 14,000 people qualified for either Medicaid or the Children’s Health Insurance Program (CHIP) under existing eligibility criteria according to the Kaiser Family Foundation. In all, about one in five of those Kansans eligible signed up for private insurance — lower than the national average of 28 percent.
Among Kansas residents selecting a QHP, 85 percent qualified for financial assistance. Nineteen percent of Kansans selected a bronze plan (20 percent nationally), 60 percent selected a silver plan (65 percent nationally), 16 percent selected a gold plan (9 percent nationally), 2 percent selected a platinum plan (5 percent nationally) and 4 percent selected a catastrophic plan (2 percent nationally). Thirty-one percent of Kansas enrollees were between the ages of 18 and 34.
Kansas is the only state with a reported increase in the percentage of uninsured individuals between 2013 and 2014. The uninsured rate in Kansas rose from 12.5 percent to 14.4 percent according to a Gallup-Healthways poll. Both the full-year results and a mid-2014 poll that showed an even larger increase have been questioned by both Gallup and Kansas insurance experts.
Kansas has not expanded its Medicaid program, which is called KanCare, despite a December 2013 poll that found 72 percent of registered Kansans voters favored expansion. While other Republican governors proceeded with Medicaid expansion, Gov. Sam Brownback remained opposed — as did the state’s Republican-controlled Legislature, which didn’t act on Medicaid expansion in 2014.
An Urban Institute report shows Kansas missing out on $5.3 billion in federal funding and hospitals losing $2.6 billion in Medicaid reimbursement.
The Kansas Hospital Association continues to advocate for expansion, touting a “Kansas solution” that includes cost-sharing provisions, high deductible plans, health savings accounts (HSAs) and other provisions that have been proposed or implemented in other conservative states.
Hospital officials testified during state legislative committee meetings to explain the financial toll of the state’s decision against Medicaid expansion. Rural hospitals in particular are struggling because the Affordable Care Act is partly funded through a reduction in hospital payments from Medicare. In states that expanded Medicaid, the Medicare reduction is offset by the increased number of people who are insured (either through private coverage sold on the marketplace or Medicaid). In states that don’t expand Medicaid, the uninsured rate remains higher and hospitals continue to struggle with higher levels of uncompensated (charity) care.
A Medicaid expansion bill, HB 2319, was introduced in the 2015 session and got a hearing before the House Health and Human Services Committee. The acting secretary for the Kansas Department of Health and Environment testified that expansion would cost the state $2.4 billion between 2016 and 2025, and the committee didn’t act on the bill. The bill sponsor said the bill is still alive and could be reconsidered during the May veto session.
Brownback seemingly reversed course on Medicaid expansion in 2015. During a speech to Missouri legislators, Brownback said he would most likely sign off on Medicaid expansion if it were budget neutral.
How Kansas approached marketplace implementation
Kansas opted to use HealthCare.gov rather than implement a state-run marketplace. The decision against a Kansas-run exchange came despite the efforts of Insurance Commissioner Sandy Praeger and some initial support from Brownback. Brownback, while critical of the Affordable Care Act, initially supported Praeger’s exchange planning efforts.
However, Brownback grew less and less supportive over time. In August 2011, Brownback returned a federal grant intended to help the state develop technical infrastructure for running the exchange. The return of the grant effectively quashed a state-run exchange, so Praeger began recommending state-federal partnership as a way for the state to retain some control.
In November 2012, Brownback announced that the state would default to a federally operated exchange, issuing a statement that said in part, “My administration will not partner with the federal government to create a state-federal partnership insurance exchange because we will not benefit from it and implementing it could costs Kansas taxpayers millions of dollars.”
During the 2014 legislative session, Kansas lawmakers debated a bill (SB 362) that would have subjected anyone who wanted to serve as a navigator to requirements above and beyond those at the federal level. Kansas navigators would have been subjected to criminal background checks, been fingerprinted, required to disclose their credit histories, and charged an annual $100 registration fee. The bill would have also prohibited navigators from recommending a specific insurance policy for a consumer. The bill passed the Senate, but failed to clear a House committee.
Kansas health insurance exchange links
State Exchange Profile: Kansas
The Henry J. Kaiser Family Foundation overview of Kansas’ progress toward creating a state health insurance exchange.
Kansas Insurance Department, Consumer Assistance Division
Assists consumers who have purchased insurance on the individual market or who have insurance through an employer who only does business in Kansas.
(800) 432-2484 / Local: (785) 296-7829