Virginia leading to protect premium subsidies
Two very important legal challenges to the ACA’s premium tax credits are currently underway, and a ruling against the tax credits could have far-reaching consequences, not only for the millions of Americans who are relying on those subsidies to make their coverage affordable, but also for anyone who purchases health insurance in the individual market at all, since the loss of billions of dollars in subsidies could cripple the markets in some states.
Halbig v. Burwell and King v. Burwell both argue that subsidies are not allowed in states (including Virginia) where HHS is running the exchange. King v. Burwell is scheduled to go before the Supreme Court in 2015, and a ruling is expected by June. The US Court of Appeals, DC Circuit, is scheduled to hear Halbig v. Burwell with its full panel of judges on December 17.
Virginia’s Attorney General, Mark Herring, is leading a group of 18 states that filed an amicus brief in the Halbig v. Burwell case in early November, urging the court to rule in favor of keeping the subsidies in the federally facilitated marketplace(FFM). Of the 18 states represented in the amicus brief, five – including Virginia – have a federally-facilitated marketplace, six have partnerships with HHS to operate their exchanges, and seven have fully state-run exchanges but are concerned that insurance market collapse in states with federally-run exchanges could impact the markets in their states as well, given how many health insurance carriers operate regionally or nationally.
Virginia is leading the amicus brief, and attorney general Mark Herring has been outspoken in the past about the importance of keeping the premium subsidies available in states like Virginia where HHS is operating the exchange. Virginia Governor Terry McAuliffe is also a proponent of keeping subsidies available in all states. FFM states have the first half of 2015 to figure out a contingency plan for how to retain subsidies in the event of a Supreme Court ruling in favor of the King plaintiffs.
Of the 216,000 Virginia residents who enrolled in the exchange in 2014, 82% are receiving premium subsidies. The state estimates that up to 495,000 people are eligible for subsidies, and the average subsidy works out to $2,900 per household. Because of the significant impact of the subsidies on access to healthcare as well as stability in the insurance market, the Attorney General is pushing to make sure the subsidies remain available for Virginia residents.
Carriers and rates for 2015
In the Richmond area, the average price for a 40 year old non-smoker selecting the second-lowest-cost Silver plan (benchmark plan) is increasing by only 2.7 percent in 2015, from $253 per month to $260 per month (for people who qualify for premium tax credits, the difference will be mostly absorbed by slightly higher subsidies).
In early May, insurers in Virginia released their 2015 rates, with rate increases ranging from 3.3 percent to 14.9 percent, but rates were not yet finalized at that point. For all 14 carriers in the individual market in Virginia (including off-exchange plans), PricewaterhouseCooper data shows a weighted average finalized premium increase of 10.2 percent for 2015.
But for people who have the benchmark Silver plan, price increases are more muted, mostly averaging 3 percent to 6 percent in much of the state, especially for enrollees willing to shop around this year in order to make sure they still have the second-lowest-cost Silver plan in 2015. The Virginia Association of Health Plans has called the price increases “relatively modest” for people who were enrolled in an exchange plan in 2014 and are renewing it or switching to another exchange plan for 2015.
Plans in the exchange are sold by nine carriers: Optima Health, Anthem Blue Cross and Blue Shield, CoventryOne, CareFirst BlueChoice, Inc. Innovation Health Insurance Company, CareFirst BlueCross BlueShield, Kaiser Permanente, Aetna and Anthem Health Plans of Virginia.
In the Richmond area, a 40 year old non-smoker purchasing the lowest-cost Silver plan from Anthem would have paid $258/month in 2014, and that is going up just slightly to $264/month in 2015. The lowest cost Silver plan from Coventry for the same enrollee is increasing in price from $230/month in 2014 to $241/month in 2015. Compared with rate increases in the individual market before the ACA, these are minimal changes. And for people who qualify for subsidies, they are offset by higher subsidies in 2015.
More money for enrollment assistance
Two Virginia advocacy organizations – the Virginia Poverty Law Center and Advanced Patient Advocacy LLC – received $1.9 million in federal grant money (out of a total of $60 million awarded nationwide) in order to operate and expand the enrollment assistance they provide as ACA navigators.
And in mid-October, it was announced that Virginia is receiving another $9.3 million federal grant that will be used to hire 100 enrollment assisters for the state. Virginia is one of just four states to receive this additional grant. Governor Terry McCauliffe is planning to use this money together with $4.3 million that the state has in remaining federal funds that were allocated towards establishing a state-run exchange – which Virginia did not do. The money will all be used to boost enrollment efforts in the state during the 2015 open enrollment period.
One of the enrollment challenges facing Virginia is the relatively high percentage of the population living in rural areas (13 percent), and also a high rural poverty rate (18 percent). In-person assistance can be harder to come by in rural areas, and internet connection can often be unreliable or slow in those areas.
Navigator organizations are working to develop strategies to reach out to the “high pockets of uninsured folks” in the state’s rural areas, and get them enrolled in the exchange during the open enrollment period that began November 15 and continues until February 15. People who want their new coverage to be effective January 1 must complete their enrollment by December 15.
Grandmothered plans ending in Virginia
Policy cancellations are once again in the news this fall in Virginia, as the state is one of 15 that did not accept the HHS proposal to allow grandmothered (transitional) health plans to renew again into 2015.
People with non-grandfathered pre-2014 health plans will need to select an ACA-compliant plan to replace their old coverage, and although some have estimated the number of upcoming policy cancellations in Virginia to be 250,000, the actual number is unknown at this point.
It’s important to remember however, that these individuals are not losing coverage. They will all be eligible to select a new ACA-compliant plan, either through the exchange, or directly through a carrier. Income-based subsidies to help pay for coverage and possibly lower enrollees’ out-of-pocket costs will be available to those who enroll through the exchange.
By April 19, 216,356 people had selected a private plan in the Virginia exchange. An additional 48,660 exchange enrollees had been found to be eligible for Medicaid or CHIP by mid-April, under the state’s existing guidelines.
Uninsured rate slightly higher in 2014
In 2013, the uninsured rate in Virginia was 13.3 percent. According to a Gallup poll, that rate had climbed slightly, to 13.4 percent, by mid-2014. Virginia was one of only three states where the uninsured rate increased during the first half of 2014. The state’s failure to expand Medicaid is no doubt a significant factor in the lack of progress on insuring the uninsured.
Medicaid expansion… or not
Virginia has not expanded Medicaid (meaning that there are nearly 200,000 people currently in the coverage gap), but has considered the “Virginia way” that political leaders are offering as an alternative to Medicaid expansion.
Governor Terry McAuliffe, who took office in early 2014, has said that Medicaid expansion is one of his main priorities, and considering pushing it through without the support of the state legislature. The GOP legislature in Virginia has strongly rejected Medicaid expansion, utilizing every legal – and possibly not-so-legal – measure they can to block it.
In early April, the Virginia Senate finance committee approved a state budget that included funding to create a private marketplace (Marketplace Virginia) that would use federal funds to help provide private health insurance to people who would otherwise be covered by Medicaid if the state were to expand the program.
But when it came time to vote on the budget, Republicans in the Senate rejected it because of the Marketplace Virginia inclusion, and a stale-mate ensued. A government shut-down was looming if an agreement wasn’t reached before the July 1 start of the new fiscal year. But in early June, Democratic Senator Phillip Puckett resigned, giving the GOP control of the state Senate; the budget quickly passed.
Gov. McAuliffe approved the budget on June 20, and the shut-down was averted. But he used his line-item veto powers to remove several Republican additions to the budget that would have blocked Medicaid expansion. Republicans are sure to push back against what they consider an over-reach of executive powers, although McAuliffe vowed to expand Medicaid with or without their support.
In September however, McAuliffe pulled back from his push for Medicaid expansion, proposing instead a ten step plan that will gradually get health insurance to about 200,000 Virginia residents – roughly half as many as would gain coverage under Medicaid expansion.
McAuliffe’s plan involves enrolling people who already qualify for health coverage but are not yet receiving benefits, as well as expanding coverage for 20,000 people with severe mental illness and for 5,000 children of low-income state employees.
A private exchange
The Virginia Chamber of Commerce announced in early June that it is working with ChamberSolutions to create a new small business private health insurance marketplace called Virginia Benefits Market.
The private exchange for employer-based coverage (initially, two or more employees) is expected to be available for use during the 2015 open enrollment period, and plans to offer health coverage as well as dental, vision, life, disability, and critical illness plans.
The private exchange should not be confused with the SHOP exchange run by HealthCare.gov, but all of the health plans that will be sold through the Virginia Benefits Market will be ACA-compliant.
History of the Virginia exchange
Former Virginia Gov. Bob McDonnell, a Republican, opposed the Affordable Care Act. But along with the Republican-controlled General Assembly, he was conflicted as how best to resist the law’s implementation in the state.
In a 2011 letter to state legislative leaders, McDonnell wrote of extreme difficulty in determining whether “ceding control of an exchange to the federal government or creating our own is in the Commonwealth’s best interest.” The governor’s and General Assembly’s actions over the next few years reflected their shared reluctance to implement either option.
In August 2010, McDonnell appointed the Health Reform Initiative Advisory Council. The council issued a report in December 2010 and recommended that Virginia implement a state-based exchange.
The Virginia General Assembly passed legislation in 2010 to invalidate the individual mandate of the Affordable Care Act, and the state attorney general filed a lawsuit against Kathleen Sebelius, the secretary of the U.S. Department of Health and Human Services, based on the new law. After a series of legal actions, the state law was ultimately ruled invalid.
In 2011, the General Assembly passed legislation that was supportive of a state-based exchange, and McDonnell signed the bill into law. However, throughout the 2012 session the General Assembly failed to pass additional legislation necessary to move ahead with exchange implementation.
In January 2014, Governor Terry McAuliffe was inaugurated in Virginia, and unlike McDonnell, McAuliffe is very supportive of the ACA and of Medicaid expansion in Virginia.
HHS-run exchange, but some state oversight
Finally, after President Obama’s re-election, McDonnell notified HHS that Virginia would not proceed with a state-based exchange nor Medicaid expansion. While the norm for the federally operated exchange leaves no role for the state, McDonnell did lobby for oversight of the health plans that will operate on the exchange within the state.
HHS approved McDonnell’s request in March 2013, and the federally-run exchange opened for business on October 1 with health plans overseen by the state Division of Insurance.
In good news for the exchange, on February 18 a Federal Judge in Virginia rejected the arguments of three Virginia plaintiffs in a lawsuit claiming that subsidies were only to be available in states running their own exchanges. This latest decision comes on the heels of similar rulings on other lawsuits that made the same challenge to the ACA.
Virginia health insurance exchange links
Virginia Consumer Assistance Program
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.
(877) 310-6560 / firstname.lastname@example.org
State Exchange Profile: Virginia
The Henry J. Kaiser Family Foundation overview of Virginia’s progress toward creating a state health insurance exchange.