King v. Burwell – Subsidies are safe
The Supreme Court upheld the legality of subsidies in every state in a 6 – 3 ruling issued on June 25. The plaintiffs had argued that subsidies could only be provided in state-run exchanges, and if they had prevailed, 56,000 people in Nebraska would have lost their subsidies. Their coverage would most likely have become unaffordable without subsidies, with premium increases that would have averaged 265 percent.
There’s no doubt that current and future subsidy recipients are far better off now that subsidies are no longer in danger, but so is everyone who purchases insurance in the individual market, including those who already pay full price. Without subsidies, the entire individual market would have destabilized, and rates would have increased by an average of 55 percent, on top of the normal annual rate increase.
Now that subsidies are safe, the insurance market is likely to remain stable and grow in size. The ruling is also beneficial for medical providers, who would have faced significant uncertainty if subsidies had been eliminated. Given how political the ACA has always been however, it’s not surprising that Republican leaders in Nebraska were disappointed with the Court’s ruling, and continue to push for full repeal of the ACA.
There are currently three carriers participating in Nebraska’s exchange (Assurant, Blue Cross and Blue Shield of Nebraska, and Coventry). Assurant announced in June however that they are exiting the individual market nationwide, and their plans will not be for sale during the upcoming open enrollment that starts November 1.
Healthcare.gov has a rate review tool that shows proposed rate increases of at least 10 percent, but it doesn’t include any of the single digit increases that have been submitted by carriers for 2016. For Nebraska, there are nine on-exchange plans for 2016 that have proposed rate hikes of at least 10 percent (there are also a few double-digit hikes proposed for Assurant/Time plans, which are now irrelevant, and there’s a proposed off-exchange rate increase for United Healthcare).
Rates won’t be finalized until later this summer, but the general consensus so far is that final rates will likely be lower than proposed rates, and that some of the headline-making increases – while huge – have been for plans that have relatively few enrollees. It will be important for people to shop around during open enrollment, just as it was last year.
No Medicaid expansion in Nebraska
Although Nebraska has not yet expanded Medicaid, 2015’s Legislative Bill 472 marked the third time the state legislature had addressed the issue. The bill would expand Medicaid to cover the 33,000 Nebraska residents who have fallen into the coverage gap – they aren’t eligible for current Medicaid, but they have incomes too low to qualify for subsidies in the exchange. All told, LB472 would provide Medicaid coverage to about 54,000 people in the state, including those who earn between 100 percent and 133 percent of the federal poverty level. They currently qualify for subsidies in the exchange, but would qualify for Medicaid instead if the program were expanded.
LB472 did not pass during the 2015 session, and will be waiting for lawmakers to take it up again when they reconvene in January. But sponsor Senator Kathy Campbell said she was pleased with the Supreme Court’s ruling to keep subsidies available, and noted that she and her colleagues will continue to push towards Medicaid expansion and a solution for the people who are in the coverage gap in Nebraska.
In 2014, the Nebraska Department of Health and Human Services held a public hearing on LB887, the Wellness in Nebraska Act, and the issue has general support from state residents – 56 percent of poll respondents in Nebraska are in favor of Medicaid expansion. But the bill ultimately died in the legislature, as did the similar LB577 the year before.
Chuck Hassebrook, the Democratic candidate for Governor in the 2014 election said that he’d make Medicaid expansion a priority. Hassebrook noted that the survival of rural hospitals depends on Medicaid expansion. But ultimately, Pete Ricketts, a Republican who is opposed to Medicaid expansion, won the election. Governor Ricketts is opposed to the ACA in general, and prefers ideas like tort reform, tax credits, and expanded health savings accounts (HSAs). He has maintained his opposition to Medicaid expansion in 2015.
Supporters of Medicaid expansion are considering a ballot initiative in 2016 if they are not successful in the legislature.
74,152 people enrolled in private plans through the Nebraska exchange during the 2015 open enrollment period (through February 22, including the week-long extension). 53 percent are new to the exchange for 2015, and 88 percent are receiving premium subsidies.
HHS had predicted that Nebraska would have 55,000 exchange enrollees by February 15. ACAsignups projected that the exchange would have 67,000 enrollees, and ultimately, the exchange exceeded even that higher target by more than seven thousand people.
An additional 7,218 people enrolleed in Medicaid or CHIP through the exchange between November 15 and February 22, qualifying under the state’s unchanged guidelines, as Nebraska has not yet expanded Medicaid. Medicaid and CHIP enrollment continue year-round.
Open enrollment for 2015 has ended, although there’s a special enrollment period (March 15 to April 30) for people who didn’t know they would have to pay a penalty for being uninsured in 2014. Taking advantage of the special enrollment period means those people can avoid paying another – higher – penalty for all of 2015 as well. Otherwise, to purchase a plan for 2015 – on or off the exchange – you’ll need to have a qualifying event. The next open enrollment period begins on November 1, but coverage won’t be effective until January 1, 2016.
CoOportunity to be liquidated
CoOportunity was an Iowa-based ACA-created CO-OP that was one of four carriers offering 2015 plans in the Nebraska exchange. But in late December, CoOportunity was taken over by Iowa state regulators, and stopped selling policies in either state. Despite the fact that CoOportunity enrolled 120,000 people in Iowa and Nebraska in 2014 – far more than many other CO-OPs around the country – CoOportunity did not receive the ongoing federal funding that many other CO-OPs received last fall.
Immediately following the take-over, it was unclear whether CoOportunity could be rehabilitated. But ultimately, in late January, regulators determined rehabilitation would not be possible, and the CO-OP will be liquidated. Regulators have said that current claims exceed CoOportunity’s assets, but the Nebraska state Guaranty Association is there to protect insureds when carriers fail, and the $500,000 per-insured limit will be adequate in this case, according to Nebraska’s Insurance Commissioner Bruce Ramge.
CoOportunity still had about 40,000 policy-holders in Nebraska as of late January. Initially, regulators said that people who had enrolled prior to December 15 could keep their CoOportunity plans, but were encouraged to shop for new coverage prior to the end of open enrollment (people who enrolled after December 15 did not have coverage with the CO-OP and had to choose another plan). But once it was determined that the CO-OP would be liquidated, all of the existing policy-holders needed to begin the process of transitioning to a new carrier.
Blue Cross Blue Shield of Nebraska reported that their call centers had been extremely busy, as they were helping thousands of CO-OP members secure new coverage. The CO-OP could be liquidated as early as the end of February, but the process is still being sorted out.
2015 rates and carriers
Now that CoOportunity plans are no longer available in the Nebraska exchange, there are three carriers participating: Blue Cross Blue Shield of Nebraska, Coventry Health Care, and Assurant. Health Alliance Midwest offered policies in 2014, but is not participating in 2015. Assurant is new to the Nebraska exchange for 2015.
The Nebraska Department of Insurance released a sampling of 2015 rates in September. They illustrated 15 different scenarios, with varying household sizes, ages, and geographic locations across the state. For each carrier, they showed the rate change for each scenario, along with an average for all 15 scenarios from each carrier.
Across the four carriers that were originally slated to sell plans for 2015 (including CoOportunity), the unweighted average for the 15 sample scenarios is a 10.7 percent increase in premiums. But one carrier – Coventry – had an average rate decrease of 3.4 percent. And while Assurant’s average rate hike across the sample scenarios is 16 percent, their prices in 2014 (off-exchange) were lower than those offered by the exchange plans – they gained market share in 2014 even though they were only available off-exchange.
PricewaterhouseCooper LLC analyzed individual market premiums, calculating weighted average rates for the 2015 open enrollment period. They found an average increase of 9 percent across the four Nebraska carriers, including on and off-exchange plans (the study was conducted throughout the late summer/autumn, and rates are current as of late November).
But the Kaiser Family Foundation did another analysis in November, looking at a 40 year old enrollee in the Omaha area, who enrolled in the benchmark plan (second lowest-cost silver plan) in 2014 and is willing to switch plans – if necessary – in order to continue to be covered by the benchmark plan in 2015. For that scenario, they found an average price decrease of 2.6 percent.
People in the Omaha area who renew the benchmark plan from 2014 instead of switching to the new benchmark plan could be in for some sticker shock however, and the Omaha area is a perfect example of why auto-renewal is not in your best interest, even if it’s available to you. The NY Times put together an interactive map showing how the benchmark plans are changing for 2015, and there’s a stark difference between renewing versus switching if you’re in northeastern Nebraska.
An analysis conducted by the Commonwealth Fund and published in December found an average rate increase of 10 percent for a 40 year-old non-smoker in the Nebraska exchange, when looking at all plans and metal levels. But for silver plans, the rate increase was an average of just 4 percent, and it’s likely that the rate increase is lower now that CoOportunity’s plans are no longer for sale, since the CO-OP had raised its rates considerably for 2015.
2014 enrollment numbers
During the first open enrollment period that ended in April, 42,975 people finalized their private plan Obamacare enrollments in the Nebraska exchange (as of April 19). And another 10,360 people had enrolled in ACA-compliant plans off-exchange.
An additional 9,879 exchange applicants had been found to be eligible for existing Medicaid in Nebraska (Nebraska has not expanded Medicaid under the ACA, a decision that disproportionately impacts the large rural population).
A recent WalletHub study projected only a slight drop in Nebraska’s uninsured rate post Obamacare implementation. 14.71 percent of the state’s residents were uninsured last year, and the projection is that 13.69 percent will be uninsured this year. States that expanded Medicaid experienced the largest drops – in some cases, as much as ten percentage points – but states like Nebraska that have not expanded Medicaid are experiencing only minimal reductions in their uninsured populations.
HHS is running the exchange in Nebraska via HealthCare.gov. Residents who need enrollment assistance can contact Community Action of Nebraska or the Ponca Tribe of Nebraska – both received federal grants to hire navigators, who can answer questions and assist with the enrollment process.
Community Action of Nebraska has a toll free number (1-800-318-2596) that people can use if they want to enroll over the phone. Residents who want in-person help can also visit one of Community Action’s offices to meet with a navigator.
Nebraska’s Department of Insurance allowed pre-2014 plans to be extended in 2014. Following the Obama Administration’s announcement in March that pre-2014 plans could be extended for up to two more years, the Nebraska Department of Insurance decided in late April to allow pre-2014 health insurance plans to be extended out as far as October 2016.
It is up to each carrier to decide whether to accept this option; Blue Cross Blue Shield of Nebraska announced in May that they would allow pre 2014 plans to be extended into 2016.
Exchange history in Nebraska
Despite work completed by the Nebraska Department of Insurance (DOI), Gov. Dave Heineman announced in November 2012 that the state would not operate a health insurance exchange. In rejecting a state-run exchange, Heineman said it would be much more expensive for the state to run its own exchange. He also expressed doubt that even a state-run exchange would give Nebraska much authority over exchange operations.
Governor Heineman has also refused to expand Medicaid, but state Senator Jeremy Nordquist is pushing for Medicaid expansion and called on Heineman in December to forfeit his own health insurance until all Nebraskans are able to have coverage.
Before Heineman’s final decision, he had expressed some support for a state-run exchange, and the DOI had studied that option. The DOI gathered input from stakeholders, developed a set of working assumptions around policy and operations, and issued a number of requests for information and requests for proposals to engage subcontractors in developing an exchange.
While the federal government manages most functions for the new marketplace, Nebraska oversees participating health plans. The Nebraska legislature also authorized a workgroup, called the Nebraska Exchange Stakeholder Commission, to provide input to state and federal officials on how the marketplace should operate.
In early December, 2014, the Nebraska Exchange Stakeholder Commission announced their recommendation that Nebraska continue to have a federally-run exchange, noting that it would be costly and difficult to switch to a state-run exchange at this point, especially given that federal funding is no longer available to establish a state-run exchange. Despite the possibility that subsidies could be taken away in federally-run exchanges if the Supreme Court rules against the subsidies in King v. Burwell (ruling expected in June 2015), Nebraska will continue to have a federally-run exchange for the foreseeable future.
Contact the exchange
The federal government will operate the exchange in Nebraska; enrollment begins Oct. 1, 2013
More Nebraska health insurance exchange links
State Exchange Profile: Nebraska
The Henry J. Kaiser Family Foundation overview of Nebraska’s progress toward creating a state health insurance exchange.
Nebraska 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 Nebraska.
(877) 564-7323 / Toll Free: (800) 833-7352
Nebraska DOI’s overview of the exchange
An in-depth document published in September 2013 that details how the exchange will work for individuals and small businesses.
Advocacy group working to raise awareness about the Nebraska exchange.