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Texas health insurance exchange / marketplace

Texas close to implementing label requirement for plans purchased through the exchange; subsidies in jeopardy for nearly a million pending King ruling

Lawmakers want to identify exchange enrollees

At the end of May, the Texas state senate passed House Bill 1514, and sent it to Governor Abbott, who is expected to sign it.  If enacted, HB 1514 would require insurance carriers to label policy ID cards with “QHP” (qualified health plan) if the plan was purchased through the exchange, starting September 1.

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 1.2 million exchange enrollees in Texas are receiving subsidies).  But the version that was passed by the Senate 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 note 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 on the line with SCOTUS case

The Supreme Court will announce a ruling in King v. Burwell later this month.  The plaintiffs in the case argue that only state-run exchanges are authorized to dispense premium subsidies, and that subsidies are not legal in states like Texas, where HHS is running the exchange.

The Urban Institute released a study in January showing the number of people in each state who are projected to lose subsidies, along with the number of newly-uninsured people we can expect to see in each state if the plaintiffs prevail and SCOTUS rules against subsidies in the federally-facilitated marketplace.  Across all 34 states with HHS-run exchanges, about 8.1 million people would be newly-uninsured if the subsidies evaporate.  And 1.4 million of them would be in Texas – more than any other state.

At ACAsignups, Charles Gaba has crunched the current numbers and projects that 883,000 people in Texas will lose their subsidies if the King plaintiffs prevail.  If the subsidies are eliminated immediately following the Court’s decision, each of those people will lose an average of $1,434 in subsidies, for just the second half of 2015.

For now, subsidies are still available in Texas and all of the other states where HHS is running the exchange.  And if SCOTUS does end up ruling against the subsidies, the decision would have no retroactive impact – subsidies dispensed prior to the ruling would not have to be repaid.

So 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 current 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 require the state to create an exchange if the Supreme Court rules that subsidies are not permitted in the federally-run exchange.  If the Court rules against the subsidies in states where HHS is running the exchange, more than 800,000 Texas residents would lose their current subsidies (that’s as of the enrollment count at the end of January – it will be higher later this spring) unless the state transitiones to a state-run exchange.

HB818 would create a state-run exchange regardless of how the Supreme Court rules in King v. Burwell.  Unfortunately, neither bill made it out of committee.  Texas remains without a fall-back option if nearly a million residents end up losing their subsidies.  And across the whole individual market, rates are projected to increase by an average of 35 percent if subsidies evaporate.

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.

Of the people who selected a plan during the 2015 open enrollment period, 57 percent are new to the exchange for 2015, and 85 percent are receiving premium subsidies.  That means there are over a million people in Texas who would lose subsidies – and likely have to drop their insurance altogether – if the Supreme Court rules that subsidies aren’t allowed in the federally-facilitated marketplace (HHS runs the exchange in Texas).  The ruling in King v. Burwell is expected in June.

The Texas exchange exceeded the HHS target of 940,000 enrollees by more than a quarter of a million people. The eerily-accurate ACAsignups predicted 1.15 million private plan enrollees in Texas by the end of open enrollment, and although the final count is about 55 thousand higher than that, it also included an additional week of enrollment, since HHS allowed people to complete their enrollments as late as February 22, instead of the originally-scheduled February 15.

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, 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, the only way you can purchase a plan for 2015 – on or off the exchange – is if you have a qualifying event.  The next open enrollment period begins on November 1, but coverage won’t be effective until January 1, 2016.

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.