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Texas health insurance exchange / marketplace

Exchange enrollees to be identified on ID cards; nearly half of exchange carriers request rate hikes under ten percent

Exchange enrollees will be identified on ID cards

At the end of May, the Texas state senate passed House Bill 1514, and Governor Abbott signed it into law on June 17.  The law will become effective September 1, and will require insurance carriers to label policy ID cards with “QHP” (qualified health plan) if the plan was purchased through the exchange.

The initial version of the House bill called for two different designations for exchange-purchased policy ID cards:  “QHP” for plans purchased without a subsidy, and “QHP-S” for plans purchased with a subsidy (86 percent of the exchange enrollees in Texas are receiving subsidies).  But the version that was ultimately signed into law dropped the “S” and simply calls for identifying all exchange enrollees with the “QHP” designation.

Many provider organizations were in support of HB 1514, because there’s a 90 day grace period for subsidized exchange enrollees who fall behind on their premiums, as opposed to the 30 day grace period for plans purchased outside the exchange and for non-subsidized exchange plans.  During that time, carriers have to pay claims from the first 30 days, but can retroactively deny claims from the following 60 days (assuming the patient doesn’t pay the past due premiums) and can require the provider to refund payments made during that time.

Supporters of the bill claim that the QHP designation simply serves to keep providers aware of the need to remind their patients to remain current with their premiums.  But the QHP label lets providers know that chances are, the patient is receiving a subsidy and thus has a 90 day grace period to remain current on premiums.  It’s not unreasonable to assume that some providers would then choose to not work with those patients.  The bill has generated considerably controversy between provider organizations and consumer advocates.

Subsidies continue to be available

On June 25, the Supreme Court issued a 6 – 3 ruling in King v. Burwell, upholding the legality of subsidies in every state.  The plaintiffs in the case argued that only state-run exchanges are authorized to dispense premium subsidies, and if they had prevailed, 883,000 people in Texas would have lost their subsidies.

Not only would coverage have become unaffordable for most of those people, it also would have become unaffordable for a significant number of people who purchase their own coverage without the help of subsidies.  Across the whole individual market, rates would have increased by up to 55 percent – in addition to the regular annual rate increases based on medical cost inflation – if subsidies had been eliminated.  Healthy enrollees would have dropped coverage, greatly increasing the percentage of sick people in the insurance pool.

The resulting “death spiral” was a very real concern in the months leading up to the King v. Burwell ruling.  But subsidies are now safe in every state, including Texas.

2016 rates

Healthcare.gov’s rate review tool shows proposed rate increases for any plans that have requested rate hikes of ten percent or more for 2016.  In Texas, eight exchange carriers have proposed double-digit rate increases for at least some of their plans.

After the rates were filed, Assurant Health, the parent company of Time Insurance, announced that they are exiting the individual market nationwide, and will not participate in the upcoming open enrollment period.  Time Insurance had proposed rate hikes up to 65 percent in Texas, and was among the eight carriers requesting double digit rate hikes for 2016.

15 carriers are offering plans in the Texas exchange in 2015.  The carriers whose rates are not displayed on the rate review tool at Healthcare.gov have requested rate increases of less than ten percent (in some states, carriers have actually requested rate decreases).

Rates have not yet been finalized, although Texas is one of five states that does not conduct its own review of proposed premiums for exchange plans.  Instead, HHS is reviewing the submitted rates.

The proposed rate increases are before the application of any subsidy, and the vast majority of Texas exchange enrollees are receiving subsidies.  It will be vitally important to shop around during open enrollment, as subsidy amounts will change if the benchmark plan changes in price.  But as long as enrollees shop the exchange to seek out the plan that represents the best value, it’s likely that subsidies will offset the bulk of the rate increases in most cases.

Lawmaker tried to establish state-run exchange

Although Texas has generally resisted the ACA over the last five years, two bills were introduced in the 2015 legislative session that would create a state-run exchange in Texas.  Texas State Representative Chris Turner, a Democrat from Arlington/Grand Prairie, filed HB817 and HB818 in January.

HB817 would have required the state to create an exchange if the Supreme Court had ruled that subsidies are not permitted in the federally-run exchange.  HB818 would create a state-run exchange regardless of the Court’s position in King v. Burwell.  Neither bill made it out of committee, but now that we know subsidies will continue to be available through Healthcare.gov, the need for a state-run exchange is no longer as pressing.

2015 enrollment

1,205,174 people enrolled in private plans through the Texas exchange during the 2015 open enrollment period – the third highest in the country, trailing only Florida and California.  But not everyone paid their initial premiums, and for a variety of reasons, some people cancelled their coverage early in 2015.  By the end of March, 966,412 people in Texas had effectuated coverage through the exchange; 86 percent are receiving premium subsidies, and nearly 60 percent are receiving cost-sharing subsidies (only available on silver plans for people with incomes up to 250 percent of the poverty level).

Of the people who selected a plan during the 2015 open enrollment period, 57 percent are new to the exchange for 2015.  The Texas exchange exceeded the HHS target of 940,000 enrollees by more than a quarter of a million people during open enrollment, and ever after the initial attrition in the early part of the year, enrollment remains above the target level.

An additional 146,548 people enrolleed in Medicaid or CHIP through the exchange between November 15 and February 22, qualifying under the state’s unchanged guidelines, as Texas has not expanded Medicaid.  Open enrollment continues year-round, but during the period from November 15 to February 22, the Texas exchange had the highest number of Medicaid enrollments of the states that have not yet expanded Medicaid (and only eight of the states that have expanded Medicaid had higher total Medicaid enrollment during that time).

Open enrollment for 2015 has ended.  Open enrollment for 2016 will begin this fall, on November 1 (for coverage effective January 1, 2016).  Between now and then, coverage can be purchased if you have a qualifying event, or if you’re Native American.  In addition, Medicaid/CHIP enrollment is year-round for people who are eligible under the state Medicaid/CHIP guidelines.

2015 Texas exchange rates

A Commonwealth Fund analysis found an average rate increase of 5 percent in the Texas exchange for 2015.  For silver plans, it’s just 2 percent.  Rate increases tended to be lower in urban areas of Texas.

In Houston, the 2015 benchmark plan (second lowest-cost silver plan) is still from the same carrier that offered it in 2014, but the lowest cost silver and bronze plans are both from different carriers in 2015.  All in all, it pays to shop around during open enrollment in Texas, as there are significant differences in rate changes from one carrier to another.

For a 40 year old non-smoker, the average bronze plan in the Texas exchange is $269 per month (pre-subsidy).  This is slightly higher than the national average for $256.

New carriers and more plans in Texas exchange

Open enrollment for 2015 began on November 15 and continues through February 15.  Applicants in Texas are using a much-improved HealthCare.gov to complete their enrollment or make changes to their existing exchange coverage.

The exchange in Texas has 15 carriers offering plans in Texas for 2015, up from 12 in 2014.  Only Michigan and Ohio have more carriers in their exchanges, with 16 each.  There are an average of 31 plans available in each county in Texas for 2015, up from 25 in 2014.  In Dallas county, there are 64 plans available, a huge increase over the 36 that were available in 2014.

No renewal for grandmothered plans

In November 2013, the federal government announced that states could allow non-grandfathered, pre-2014 health plans (dubbed “grandmothered” plans) to renew again and remain in force in 2014.  In March 2014, they issued another extension for these transitional policies, allowing states to let them continue to renew as late as September 2016.  The majority of the states have accepted that proposition, but Texas regulators simply didn’t issue any guidance whatsoever on the matter (in interviews with insurance officials in each state, Texas was alone in this regard – every other state took a position either for or against renewal of grandmothered plans).

Because Texas didn’t issue any guidelines for renewal of grandmothered plans, those policies are not allowed to renew in Texas in 2014.  At what would have been their renewal date, they must instead be replaced with ACA-compliant coverage.

ACA making coverage affordable

There is no doubt that Obamacare has expanded access to affordable health insurance for most people in Texas.  A study released by HHS on June 18, 2014 found that the average net premium for people receiving tax credits in the Texas exchange was just $72/month (a 76 percent reduction from the $305/month “retail” price).

And 84 percent of Texas residents who enrolled through the exchange in 2014 qualified for tax credits.  The $72/month after-subsidy premium in Texas is the seventh lowest out of the 36 states where HHS is running the exchange – the average across all 36 states is $82/month.

2014 enrollment exceeds 7o0,000

Enrollment in the Texas exchange skyrocketed to 733,757 by April 19.  As of March 1, private plan enrollment in the Texas exchange had been at 295,000.  The increase during March and the extension period in the first half of April was the largest of any state in the country.  That followed January and February enrollment of more than 90,000 new enrollees per month in Texas.

Total enrollment in Texas was the second highest of the states where HHS is running the exchange, trailing only Florida.

An additional 141,494 exchange applicants had enrolled in Medicaid, despite the fact that Texas is not expanding Medicaid under the ACA (those applicants were already eligible under existing rules).  Total enrollment – including private plans and Medicaid – was just over 875,000 people as of April 19.

No Medicaid expansion in the near future

According to a Gallup poll released last summer, 27 percent of Texas residents were uninsured in 2013 — the highest rate in the nation.   That rate fell slightly during the first half of 2014, but remained at an alarmingly high 24 percent by mid-2014.

A report prepared by the Hobby Center for the Study of Texas at Rice University estimated that 3 million people could gain coverage in 2014 if the state implemented the provisions of the Affordable Care Act.  But with the state’s current refusal to expand Medicaid, approximately one million of those people will fall into a “coverage gap” (and likely remain uninsured) because they earn too much to qualify for Medicaid but too little to qualify for subsidies in the exchange.

But Texas has a new Governor – Greg Abbott – who will take office in January, and he’s expressed interest in Utah’s Medicaid expansion waiver.  Gov-elect Abbott has also said that although he’s opposed to expanding the current Medicaid system, “like anyone with an inquiring mind, we’ll look at any idea anyone has” on improving access to healthcare.

Although Abbott’s comments in December and early January triggered hopes among Texas Democrats that Medicaid expansion could be in the cards, Abbott clarified in mid-January that he believes the current Medicaid system is too broken to be expanded, and noted that the optimism about Medicaid expansion in Texas was simply based on his question about how Utah’s expansion waiver works – he reiterated that he has not changed his position on Medicaid expansion, and that he’s still opposed to it.

Abbott would like to see Texas use federal Medicaid funds in the form of block grants, but HHS has opposed that possibility with other governors, and it’s unlikely they’ll relent with Texas.

Rates and carriers in 2014

Twelve carriers offered a total of 95 different health plans in the Texas exchange in 2014 (this increased to 15 in 2015), so residents have many options from which to choose and competition among carriers is helping to keep the rates below the national average.  Not only are there a wide range of plans available in Texas, but there are also several big-name health insurance carriers participating in the Texas exchange, including Aetna, Cigna, Blue Cross Blue Shield of Texas and Humana.

There has been some concern that not enough doctors are accepting health plans purchased through the exchange, but in many cases it’s impossible for medical offices to know whether a plan was obtained in the exchange.  But a USA Today article published in late October notes that doctors in Texas are pushing for a requirement that insurance id cards indicate whether a plan was purchased through the exchange, and what metal level coverage it is.

Exchange history and legislation

Texas Gov. Rick Perry formally notified the Department of Health & Human Services (HHS) in July 2012 that Texas would not implement a state-run health insurance exchange. In his notification letter, Perry —a long-standing opponent of the Affordable Care Act — called the ACA provisions “brazen intrusions into the sovereignty of our state.”

Texas State Representative Eric Johnson, a Democrat from Dallas, did introduce bills in early 2013 that would have created a state-run exchange and expanded Medicaid, but neither was successful.  HHS is running the exchange in Texas, and the state is not expanding Medicaid.

The significant enrollment numbers in Texas are testament to a law that is working well, and its success is being praised by Texas Democrats.  But Republicans in the state legislature have vowed to continue their fight against the ACA in the 2015 legislative session.

CMS announced on November 22, 2013 that Texas applicants can enroll in QHPs directly through insurers – bypassing the exchange website entirely –  with premium and cost-sharing subsidies available for eligible enrollees (the federal data hub is used to verify identity and determine subsidy eligibility for enrollments that go directly through insurance carriers).

The Texas High Risk Pool (a health plan for people with pre-existing conditions that pre-dates the ACA) remained open for the first three months of 2014, after originally being scheduled to cease operations at the end of 2013.

In early January, the Perry Administration’s efforts to make it more difficult to be a navigator in Texas drew criticism from ACA supporters and Democratic lawmakers, who claim that Perry is simply trying to impede enrollment in the Texas exchange.

According to a Kaiser Health News article, Blue Cross Blue Shield of Texas is playing a major role in educating state consumers about the federal health insurance marketplace. The Blues plan is using many strategies to reach consumers: creating a website, launching a texting campaign, and engaging churches, community clinics, nonprofits, and other community organizations.

A new anti-ACA amendment

In November 2014, Republican Senator Donna Campbell introduced SJR16, which would prohibit the state of Texas from having any part in imposing, collecting, or enforcing the individual mandate and its penalty.  If SJR16 is passed by the 2015 legislature, it would create an amendment to the state constitution.  Rather than being signed by the governor, it would go directly to the November 2015 ballot to be approved by voters.

However, bills and initiatives like this are largely symbolic, since the IRS has sole responsibility for enforcing the individual mandate and collecting the penalty.

Texas health insurance exchange links

HealthCare.gov
800-318-2596

Be Covered Texas

Federal Health Care Reform Resource Page
From the Texas Department of Insurance

Texas Health Options

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