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Oklahoma health insurance exchange / marketplace

Subsidies safe for 86k; three carriers offering plans in OK exchange for 2016

Subsidies are safe…

On June 25, the Supreme Court issued a ruling in King v. Burwell, upholding subsidies in every state, regardless of whether the exchange is run by the state or federal government.  Subsidies for 86,000 Oklahoma residents are safe, and the insurance market there is not going to head into a “death spiral.”

Actuaries had predicted that the elimination of subsidies would have increased premiums by 55 percent (in addition to the regular annual rate increases based on medical cost growth) even for people who don’t currently receive subsidies.  For those who do currently get subsidies, premiums would have increased by an average of 243 percent in Oklahoma.  Because coverage would have become unaffordable for so many people, the size of the individual market would have dropped by about 70 percent, leaving only the sickest insureds with coverage.

… despite state’s effort to take them away

But despite the disastrous outcome that would have resulted if the Supreme Court had eliminated subsidies in states like Oklahoma that use the federally-run exchange, Oklahoma was actively fighting to have the subsidies eliminated.

In late December, Oklahoma filed an amicus brief with the Supreme Court, urging the Court to side with King in the King v. Burwell hearing (ie, to do away with subsidies in states like Oklahoma that use Healthcare.gov).   Five other states (Alabama, Georgia, Nebraska, South Carolina, and West Virginia) joined Oklahoma in filing the amicus brief.  This is in contrast to Virginia, which headed a group of 18 states that filed an amicus brief in the similar Halbig v. Burwell case in November, but urging an opposite ruling, in favor of keeping the subsidies in all states regardless of who runs the exchange.

Oklahoma has also generated headlines because of a court ruling on the Oklahoma v. Burwell lawsuit over the legality of subsidies in states with a federally-run exchange.  Oklahoma’s Attorney General, Scott Pruitt, initiated the lawsuit.  Last fall, a federal judge in Oklahoma ruled that subsidies cannot be issued by exchanges that are run by the federal government, but can only be issued in the 17 states where the state is running the exchange.  That case was presented to the Supreme Court, but they declined to hear it, and the ruling in King v. Burwell (ie, that subsidies are legal in the federally-run exchange) overrides the lower court’s decision in Oklahoma v. Burwell.

Following the Court’s ruling on the King case, Oklahoma Governor Mary Fallon expressed her disappointment:  “The Supreme Court’s decision today in King v. Burwell means that taxpayers will be, for the time being, stuck with a law that is deeply flawed, disruptive to the lives of American families and a destructive force in our economy.

2016 rates and carriers

Open enrollment starts November 1 (for coverage effective January 1, 2016), and there will be plans available from three carriers in the Oklahoma exchange:  Blue Cross Blue Shield of Oklahoma, CommunityCare, and United Healthcare.  United is new to the Oklahoma exchange for 2016.  Global Health offered plans in 2015, but has decided to only sell off-exchange policies in 2016.  And Time/Assurant is exiting the individual market nationwide, and will not participate in the upcoming open enrollment.

Oklahoma is one of five states that leaves the on-exchange rate review process entirely up to HHS; the state only actively reviews proposed rates for off-exchange plans.  Rates for 2016 had to be submitted when the King v. Burwell ruling was still up in the air, and rates would increase market-wide (including off-exchange) if subsidies are eliminated.  For that reason, the carriers wanted to be able to submit two sets of rates, with one as a back-up in case subsidies are eliminated.

That was not permitted, and the Department of Insurance believes that some of the rates that were filed in May include an additional load to account for a potential plaintiff win in King v. Burwell.  They noted that it wouldn’t be enough of a rate increase to actually mitigate the impact of a plaintiff win, but it would be a start (interestingly enough, several other state Insurance Departments have told me that proposed rates are strictly based on claims experience, and don’t include additional load because of King v. Burwell).

Oklahoma is open to having carriers submit new rates after the Supreme Court rules, but they explained that on-exchange rates would have to be re-submitted through HHS, and HHS still hasn’t announced whether they will allow rate revisions after the issue of subsidy availability is settled.

In terms of the rates that have already been filed, Healthcare.gov has a rate review tool that shows proposed rate increases of at least ten percent; single digit proposed rate increases are not displayed.  In Oklahoma, there are just eight ACA-compliant plans that have proposed rate hikes of at least ten percent for 2016.  Three are small group, five are individual.  And of the individual plans, two are from Time/Assurant, and the carrier has decided they won’t be offering plans during the upcoming open enrollment after all.  The three remaining individual plans with double digit rate increases are all from Blue Cross Blue Shield of Oklahoma.  All of CommunityCare’s proposed rate increases are under the ten percent threshold.

How many people have enrolled for 2015?

126,115 people in Oklahoma had enrolled in private plans through the exchange by February 22, when the 2015 open enrollment period and extension had ended.  Total enrollment was far higher than the 90,000 HHS had predicted for the second open enrollment period – in fact, the exchange had already exceeded the projected target early in January.

54 percent of the 2015 enrollees were new to the exchange for 2015, while 46 percent already had a plan in 2014.  81 percent of the Oklahoma enrollees were eligible for premium subsidies for 2015.

In addition, 12,946 people in Oklahoma enrolled in Medicaid or CHIP through Healthcare.gov from November 15 to February 22.  Medicaid/CHIP enrollment continues throughout the year.

Open enrollment for 2015 has ended, and most people now need a qualifying event in order to purchase a plan for 2015.  However, Native Americans can enroll year-round, as can applicants who are eligible for Medicaid or CHIP.

2015 rates and carriers

In the HHS-run Oklahoma exchange, five carriers were initially slated to offer plans for 2015, up from four in 2014.  Plans were to be available from Coventry/Aetna, Blue Cross Blue Shield of Oklahoma, and Time, as well as newcomers GlobalHealth and CommunityCare.  But at the eleventh hour, Coventry/Aetna decided to only offer plan outside the exchange.

Four carriers are offering dental plans on the exchange:  Best Life, Dentegra, Delta Dental, and Guardian.

Across the four existing exchange carriers, premium changes range from a decrease of 9.1 percent to an increase of 29 percent.  The weighted average is a 12.2 percent rate increase (as calculated by ACAsignups.net).  But the addition of two new carriers should introduce a greater level of competition and hold premiums in check in 2016.

And if we focus just on the cheapest silver plans, Oklahoma is a good example of why it’s so important to shop around for 2015 coverage.  People with the cheapest silver plan from 2014 who are willing to shop around and switch to the cheapest silver plan for 2015 could see price decreases in most of the state.  If they auto-renew their 2014 plan however, their price will go up instead.

Most 2014 enrollees who didn’t switch to a new plan by December 15 were automatically renewed in their current plan for 2015.  But they still have until February 15 to make changes that would go into effect in March (enrollments that were submitted by January 15 will have a February 1 effective date).

How many people enrolled in 2014?

69,221 people in Oklahoma had finalized their private plan enrollment in the state’s exchange by April 19. The vast majority (about 60,000) of the private plans were sold by Blue Cross Blue Shield of Oklahoma, and the carrier reported that another 25,000 people purchased their ACA-compliant plans off-exchange.

Obamacare enrollment can continue year-round when qualifying events trigger special enrollment periods.  When 2015 rates were announced in early September, the data included a mention of the fact that 73,071 people were currently covered under private plans through the Oklahoma exchange at HealthCare.gov.  That’s an increase of nearly four thousand people over the summer, even after accounting for attrition.

According to a Gallup poll released in August, Oklahoma’s uninsured rate was 21.4 percent in 2013, and had fallen to 17.5 percent by mid-2014.

Oklahoma was already allowing insurers to renew existing pre-ACA policies into 2014 prior to President Obama’s announcement in mid-November that states and carriers could renew – rather than terminate – plans that were not ACA compliant for another year. So the state has largely avoided widespread cancellations in the individual and small business markets.

Medicaid and Insure Oklahoma

By mid-April, 17,374 applicants were eligible for Medicaid or CHIP under existing rules (they were already eligible pre-2014, but not enrolled). Oklahoma is not participating in Medicaid expansion at this time. Instead, in early September 2013, the state negotiated with the federal government to get a one year extension for the Insure Oklahoma program. The state received a second extension in June, 2014 that will keep Insure Oklahoma functional throughout 2015.  As of mid-June 2015, the state Department of Insurance had not yet received approval from CMS to continue Insure Oklahoma in 2016.  The program is included in the Section 1115 Medicaid waiver that the state submitted, and while they’re expecting to get approval, it hasn’t yet arrived.

Insure Oklahoma subsidizes private health insurance for low income residents (up to 100 percent of poverty level – this is a decrease from the previous 200 percent limit that was in place prior to 2014), using tobacco taxes matched with federal funds that were scheduled to expire at the end of 2013 to make way for Medicaid expansion. The program still receives federal funds in 2015, but it now covers about 19,000 of the 30,000 people who were enrolled as of 2013, since Insure Oklahoma members with incomes above 100 percent of poverty were able to transition to the federally-run Oklahoma exchange instead (roughly 225,000 residents in Oklahoma would have benefited from the expansion of Medicaid).

Despite the fact that Oklahoma has not expanded Medicaid, the state’s program is facing a budget shortfall and in early July announced a 7.75 percent cut in Medicaid reimbursement rates for providers, which will result in a $48 million savings for the state, but leaves providers facing reduced payments, even as they provide healthcare for more than 17,000 new enrollees in the state’s Medicaid program.

Political leadership’s opposition to the ACA

Gov. Mary Fallin announced in November 2012 that Oklahoma would not implement a state-run health insurance exchange. In the same press release, Fallin expressed her support for a lawsuit brought by Oklahoma Attorney General Scott Pruitt. The suit contends the federal government cannot enforce the employer mandate or dispense tax subsidies in a state that has not authorized an exchange.

On August 12, 2013, a federal judge denied the federal government’s motion to dismiss the case, and then on September 30, 2014, a federal judge sided with Pruitt and ruled that subsidies could not go to people in states with exchanges run by HHS.  Similar cases were heard in other courts in the summer of 2014, and this issue is likely to eventually end up before the Supreme Court.

In addition to the lawsuit, on November 6 Pruitt joined AGs from nine other states in petitioning HHS Secretary Kathleen Sebelius to support “immediate legislative action” to correct various aspects of the ACA’s implementation. And in February 2014, Republican Rep. Jon Echols introduced HB3364, which would provide a state tax credit to offset any shared responsibility penalties (individual mandate) incurred by Oklahoma residents. The bill did not proceed any further than introduction however.

Not surprisingly, a study released in late January 2014 found that Oklahoma was one of just five states that were “diehard hold outs” with regards to the ACA – doing nothing at all to help implement the law.  And heading into the 2015 legislative session, Oklahoma state Representative Mike Ritze, a family physician, is focused on doing “everything we can to try and reverse [the ACA]” through state-based legislation.

The road to a federally-run exchange

The Fallin administration state officials initially showed some openness to a state-run exchange — if only as a slightly less distasteful option than a federally operated exchange. The Oklahoma Joint Committee on Federal Health Care Law studied exchange options and issued its final recommendations in February 2012. The committee supported a state-run exchange open to small businesses, but not individuals. A bill for this type of exchange, which is similar to Utah’s exchange, was introduced but not passed in 2012.

In line with state leaders’ opposition to the ACA, Oklahoma is not actively marketing the exchange to residents. However, three state organizations have received grants to act as navigators: Cardon Outreach in Oklahoma City, Oklahoma Community Health Centers, Inc., and Little Dixie Community Action Agency, Inc.

HHS is running the exchange in Oklahoma. You can compare plan, determine subsidy eligibility and enroll in coverage at Healthcare.gov.

Oklahoma health insurance exchange links

HealthCare.gov
800-318-2596

State Exchange Profile: Oklahoma
The Henry J. Kaiser Family Foundation overview of Oklahoma’s progress toward creating a state health insurance exchange.

Oklahoma Insurance Department
Assists people insured by private health plans, Medicaid, or other plans in resolving problems pertaining to their health coverage; assists uninsured residents with access to care. (405) 521-2991 / Toll Free in OK: (800) 522-0071 / ombudsman@oid.ok.gov