King v. Burwell – subsidies are safe
The Supreme Court ruled on June 25 that subsidies are legal in every state, regardless of whether the exchange is run by the state or federal government. That means subsidies will continue to be available for 170,000 people in Ohio, and for eligible new enrollees who sign up during open enrollment or because of a qualifying event.
The Kaiser Family Foundation estimated that if subsidies had been eliminated in Ohio, people currently receiving subsidies would have seen their premiums increase an average of 190 percent. And it’s not just people receiving subsidies who would have felt the pinch – the entire individual market in states like Ohio would have been in jeopardy. The American Academy of Actuaries has projected rate increases of at least 35 percent market-wide in those states if subsidies are eliminated (and they could have reached 55 percent – in addition to the regular annual rate increases based on medical cost inflation).
Fortunately for the residents, health insurers, and medical providers in Ohio, the Supreme Court rejected the idea that subsidies could only be provided in state-run exchanges, and subsidies are safe in Ohio.
Just three carriers in Ohio’s exchange have proposed rate increases of ten percent or more for 2016. Only double-digit rate increase requests are published on Healthcare.gov’s rate review tool, and none of the rates have been approved yet. Aetna has proposed an average rate increase of 13.2 percent, HealthSpan has proposed an average 17.5 percent rate increase, and MedMutual has proposed an average rate increase of 14.5 percent. The rest of the plans listed on Healthcare.gov’s rate review site are for small group and off-exchange products.
Regulators in Ohio will be reviewing the proposed rate changes this summer, and final rates will be published in advance of open enrollment, which starts on November 1. It will be important – as always – for insureds to shop around during open enrollment, as premium changes can result in new plans taking over the “benchmark” spot, and new subsidy amounts.
234,341 people enrolled in private plans through the Ohio exchange during the 2015 open enrollment period (through February 22, including the week-long extension). 47 percent are new to the exchange for 2015, and 84 percent are receiving premium subsidies. HHS had predicted 200,000 enrollees in the Ohio exchange, so the state ended up well above their target.
Ohio expanded Medicaid under the ACA, and an additional 79,963 exchange enrollees qualified for Medicaid or CHIP between November 15 and February 22. Medicaid/CHIP enrollment continues year-round, but more people tend to enroll during open enrollment because of the extensive publicity and outreach. Since Medicaid was expanded in January 2014, 471,000 Ohio residents have gained coverage through the program, including exchange enrollees and people who enrolled directly.
Open enrollment for 2015 has ended, so for most people, 2015 coverage – on or off the exchange – can only be purchased now if they have a qualifying event (Native Americans can enroll year-round, as can anyone eligible for Medicaid/CHIP). The next open enrollment period begins on November 1, for coverage effective January 1, 2016.
Get Covered America launched a friendly rivalry in late November between Ohio and Michigan, playing off the states’ long-standing football rivalry, and announced in the days leading up to the Ohio State v. Michigan game. The “Calls for Coverage” challenge pitted enrollment teams in Ohio and Michigan against one another for the 2015 open enrollment period, to see which state can complete more educational calls to consumers.
Uninsured rate plummets
The number of uninsured Ohio residents has dropped to about 600,000, from about 1.2 million in the fall of 2013. The uninsured rate has been cut in half largely as a result of Medicaid expansion (Ohio’s program was expanded as of January 1, 2014) and the subsidies that have made individual insurance affordable for low and middle-income households.
2015 rates and carriers
Sixteen carriers are selling 2015 individual plans in the Ohio exchange, up from twelve in 2014. InHealth is the state’s ACA-created CO-OP, and is among the carriers selling individual coverage for 2015. InHealth’s CEO, Jesse Thomas, has reassured policy-holders of the carrier’s stability in the wake of Iowa CO-OP CoOportunity’s recent collapse. Thomas points out that InHealth’s growth has been slow and sustainable, while CoOportunity enrolled ten times as many people as projected in 2014 and ultimately didn’t have the funds to cover their claims.
Ohio is tied with Michigan for having the most carriers of any exchange in the country for 2015. After reviewing plans and rates, the Ohio Department of Insurance announced in the fall that the average rate increase for 2015 would be 12 percent in the individual market – a double digit hike that was immediately held up by ACA opponents as evidence of the law’s failure to rein in premiums.
But the Department of Insurance used very basic math in their calculation, and the result is not particularly informative. A weighted average would have been much more helpful, and appears that it would also be significantly lower. In short, people who purchase their coverage through the exchange in Ohio should not expect double digit rate increases in 2015. Many plans will have much more modest premium adjustments.
If we look only at plans sold within the exchange, a Commonwealth Fund analysis finds an average price increase of just 4 percent across all plans and all metal levels, for a 40 year-old non-smoker. For the least expensive silver plans, in 42 of Ohio’s 88 counties, prices are either flat or decreasing for 2015.
People who were enrolled in the second-lowest-cost silver plan (the benchmark plan) in 2014 could also see a decrease in premiums in 2015 if they’re willing to shop around and make sure that they are enrolled in the benchmark plan for 2015. In many cases this will mean switching to a new plan, but in most areas of the state, it will also result in a premium decrease or just a small increase. For benchmark plan enrollees who qualify for premium subsidies, the changes will be mostly offset by adjustments to the premium subsidies for 2015.
In the Cleveland area, the lowest and second-lowest cost silver plans and the lowest cost bronze plan are all being offered by new carriers in 2015. All three have switched from the carriers that were offering them in 2014, highlighting the importance of shopping around during open enrollment.
Also in the Cleveland area, the benchmark plan for a 40-year-old non-smoker will be an average of $247 per month in 2015, down two dollars from $249 in 2014. Media reports of double digit price increases in Ohio were overblown, and residents should not let those reports scare them away from checking out the plans that are available. The state has a very robust exchange with 16 carriers participating; both new and returning enrollees should be able to find a plan that fits their needs and budget.
A possible lawsuit brewing
In late January, Ohio Attorney General Mike DeWine filed a lawsuit against the federal government over an aspect of the ACA that DeWine’s office – and at least one Ohio County as well – believes is illegal.
The crux of the issue is the reinsurance fee assessed under Obamacare to provide rate stabilization in the insurance market for the first three years of ACA implementation. This requires a per-user fee on all health insurance plans, including self-insured plans like the state of Ohio has for its workers. Across all of the state’s employees, the reinsurance fee comes is at $5.3 million for 2014, and DeWine sees it as a case of one government (federal) taxing another (state).
In addition to DeWine, plaintiffs in the suit include the Ohio Department of Administrative Services and four universities. DeWine had previously consulted with AGs in other states, but ultimately all of the plaintiffs are based in Ohio.
Medicaid expansion in the Buckeye state
Ohio Governor John Kasich is not an ACA proponent, but he’s long been a supporter of expanding Medicaid in Ohio, which was approved in late October 2013. Eligible residents were able to begin enrolling in expanded Medicaid on December 9, 2013 and the state received 1,165 applications on the first day of enrollment. By August, net enrollment in Ohio’s Medicaid program had grown by more than 367,000 people since the fall of 2013.
However, opponents of Medicaid expansion brought a lawsuit against the Ohio Department of Medicaid and the state’s Controlling Board because the General Assembly was bypassed in the decision to expand Medicaid. The plaintiffs hoped to block the state from expanding Medicaid to cover approximately 366,000 residents who would be newly eligible under the expanded guidelines. But on December 20th, the Ohio Supreme Court sided with Governor Kasich and kept Ohio Medicaid expansion on track.
Although Medicaid expansion is going well in Ohio, curiously, Governor Kasich has continued to reiterate his support for repealing Obamacare. In October, he said that he’d like to see a full repeal, but with an accommodation for Medicaid expansion. Charles Gaba crunched the numbers and points out that if Ohio were to pay for its own expanded Medicaid (which would have to be the case if they wanted to keep it even in the face of a full repeal of the ACA), it would amount to an $840 million annual tax increase shouldered by the people of Ohio (reminiscent of Mitch McConnell pushing for repeal of the ACA while allowing Kentucky to keep Kynect?).
2014 enrollment and prices
By mid-April, 154,668 Ohio residents had completed their Obamacare enrollment, selecting private plans in the exchange.
And by the end of August, 367,395 people in Ohio had enrolled in the newly-expanded Medicaid program in Ohio – surpassing the state’s estimate for this year and next year combined. In addition, by mid-April another 124,195 people had enrolled in Medicaid who qualified based on the old guidelines but had not been previously enrolled. Their enrollment is due in large part to the attention that ACA implementation has brought to the Medicaid program, called the “woodwork” effect.
All told, that’s over 646,000 people in Ohio who obtained new health insurance by the fall of 2014, thanks to Obamacare.
A report released by HHS in June compared after-subsidy premiums paid by exchange enrollees in the 36 states where HHS is running the exchange. In Ohio, the average after-subsidy premium was $121 per month – significantly higher than the $82 per month average across all 36 states.
Ohio’s after-subsidy premiums in 2014 were the fourth highest among the 36 states (only New Jersey, North Dakota and Deleware are higher), but the discrepancy is a factor of the enrollees’ incomes and the plans they selected: The ACA completely levels the field for people with the same incomes who select the second-lowest-cost silver plan in their exchanges. But among enrollees who qualify for subsidy, there are significant differences in income, and enrollees are free to apply their subsidies to any “metal” plan in the exchange.
Although the average after-subsidy premiums are higher in Ohio than in most other states, base rates in the Ohio exchange are just slightly lower than the average of the 36 states where HHS is running the exchange. Averaged across all age groups, the lowest cost 2014 bronze plan in the Ohio exchange was $263/month, and the lowest cost silver plan was $304/month.
Exchange history in Ohio
In November 2012, Governor Kasich formally announced that Ohio would not implement a state-run health insurance exchange. In the same letter, Kasich indicated that Ohio would retain control of plan management activities and determining eligibility for the state’s Medicaid and Children’s Health Insurance Plan (CHIP).
CMS announced on November 22 that the technology necessary for applicants to enroll in exchange plans directly through insurers was working and being piloted in three states, including Ohio. The program was summarized in a presentation by Families USA in early March.
Ohio residents can compare plans, determine subsidy eligibility and enroll in coverage at Healthcare.gov.
Leadership’s opposition to the ACA
In June 2013, the Ohio Department of Insurance issued a press release announcing that 14 insurers filed plans to offer more than 200 options for individual insurance, and seven insurers would offer 84 options for small businesses (ultimately, two carriers backed out, leaving 12 in the exchange in 2014). Lt. Gov. Mary Taylor, who also directs the state’s insurance department, stated in the press release that “consumers will have fewer choices and pay much higher premiums for their health insurance starting in 2014.”
Both opponents and supporters of the Affordable Care Act jumped on the press release. Opponents claimed Ohio was the latest example of “rate shock.” Supporters dismissed the announcement for making “apples-to-oranges” comparisons and pointed out that both Kasich and Taylor have been outspoken about their opposition to the ACA.
Taylor is still no fan of the ACA, and is still the Director of the Department of Insurance. In a May 2014 press release, Taylor said that “Obamacare is hitting us harder and driving our costs up significantly.”
Laws were enacted in Ohio to make it more difficult for navigators to be certified, which means that the state has fewer people available to assist applicants, and there was a delay in getting them started as navigators after the exchange opened on October 1.
A private exchange
On June 10, CieloStar announced that it had partnered with the Ohio Chamber of Commerce to launch a private health insurance and benefits exchange, which they said was open for business in early June.
The private exchange in Ohio purports to offer a variety of major medical and supplemental plans for individuals, along with coverage options for small and large groups. For individuals, it looks like the only options are CareSource Just4Me plans, but they do appear to be ACA-compliant coverage (ie, “real” health insurance as opposed to discount plans that are being sold by other official-looking exchanges).
Ohio health insurance exchange links
State Exchange Profile: Ohio
The Henry J. Kaiser Family Foundation overview of Ohio’s progress toward creating a state health insurance exchange.