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Alabama health insurance

AL exchange options dwindle to one company, health rankings slide

In Alabama, the cost of health insurance and the options available to consumers have gone in vastly different directions. During 2017 open enrollment, those shopping the state’s health insurance exchange will see rate increases averaging 36 percent, a jump well above the national average of 25 percent. Their choices, on the other hand, will be reduced health plans offered by a single carrier: Blue Cross Blue Shield, which currently enrolls most of Alabama’s exchange enrollees. This won’t be the first times BCBS rates have risen in Alabama; Time reports they went up 28 percent from 2015 to 2016.

With a federally facilitated health insurance exchange and refusal to expand Medicaid, Alabama is among states more resistant to the Affordable Care Act. These decisions have surely impacted the health of its residents as well as their access to healthcare.

With a single company offering coverage through Alabama’s exchange in 2017 and the 2016 general election in November, what will happen to the state’s percentage of uninsured, health insurance premiums, and overall public health indicators in the year to come?

Alabama health ratings

The Commonwealth Fund’s Scorecard on State Health System Performance, 2015, rated Alabama 47th among the 50 states and District of Columbia. Alabama’s state score was based on 4th quintile placement for three categories, Avoidable Hospital Use & Costs, Healthy Lives, and Equity, as well as 3rd quintile placement for the Access and Prevention categories. Despite coming in 36th for the percentage of uninsured adults ages 19 to 64, the state was among the top 10 (sixth) for its percentage of uninsured children ages 0 to 18. The state also has high vaccination rates among infants, which earned it another top 10 placement (seventh) for that indicator. More details on Alabama’s score can be found here.

Similarly, Alabama came in 46th, in the 2015 edition of America’s Health Rankings. As with its Commonwealth Fund Scorecard, Alabama’s performance was negatively impacted by a relatively high uninsured rate and positively affected by a relatively high rate of immunized children.

For yet another look at health indicators that might explain Alabama’s health rating, check out the 2016 listing of Key Health Data About Alabama compiled by Trust for America’s Health. A county-by-county analysis provided by the Robert Wood Johnson Foundation and the Population Health Institute at the University of Wisconsin allows you a more microscopic view of Alabama’s health and access to healthcare.

How the ACA has helped Alabama

While it may not be seeing the nation’s largest improvements, Alabama is seeing improvements under the Affordable Care Act. From before the first Obamacare open enrollment period through September 2015, Alabama’s uninsured rate dropped 4.7 percentage points from 17.7 percent to 13 percent. In the same timeframe, the national rate dropped from 17.3 percent to 11.7 percent.

The vast majority (89 percent) of Alabamians who enrolled in qualified health plans (QHPs) through Alabama’s health insurance exchange (i.e., in 2016 received financial assistance.

2017 rates and carriers for Alabama

During 2017 open enrollment, there will be fewer options for Alabama residents who buy individual health plans from the state’s federally facilitated exchange. While there were three exchange-based health insurance carriers in 2016, there will be only one in 2017: Blue Cross Blue Shield of Alabama.

Humana and UnitedHealthcare are exiting the individual market completely, which means they will not sell to Alabamians on- or off-exchange in 2017. The remaining carrier, Blue Cross Blue Shield of Alabama, already covers the majority of the state’s enrollees. Freedom Life will sell off-exchange plans in Alabama, giving those who buy off-exchange coverage a total of two carrier options.

Blue Cross Blue Shield of Alabama had proposed rate increases that average 39.3 percent for 2017, and the Alabama Department of Insurance approved final rates averaging 36 percent.

AL enrollment in qualified health plans

The Kaiser Family Foundation in 2013 estimated Alabama’s potential market size to be 464,000 people and that 270,000 of them would qualify for tax credits to help lower their premiums. As of April 2014, there were 97,870 people enrolled in qualified health plans (QHPs) through Alabama’s health insurance exchange.

Alabama’s 2016 exchange enrollment was up 14 percent over 2015, with 195,055 enrollees. Forty-three percent of those enrollees were new to the exchange for 2016.

Alabama and Obamacare

In 2010, Alabama’s Congressional delegation opposed the health reform law. Sens. Jeff Sessions and Richard Shelby both voted no on the law while six Alabama representatives voted no in the House.

At the state level, Gov. Robert Bentley indicated early on that he would support a state-run health insurance exchange, but ultimately sided with the state legislature, which decided to cede exchange control to federal government. The state did not expand Medicaid in 2014.

Alabama Medicaid expansion

Alabama’s opposition to the Affordable Care Act also meant that the state opted to not accept Obamacare’s Medicaid expansion. As a result, 139,000 of Alabama’s uninsured nonelderly population fall into the coverage gap, with no access to financial assistance with their health insurance. However, changes to Alabama Medicaid have been made and proposed.

In May 2014, Alabama submitted a Section 115 demonstration waiver proposal to CMS. The proposal, which is called Alabama Medicaid Transformation, was approved in February 2016. The waiver calls for Medicaid funds to be distributed on a per-patient basis to regional care organizations (RCOs), which will use preventive care and early interventions to keep patients out of the hospital. RCOs that spend less than their per-patient allocation may keep their remaining funds; those that exceed their allocation must cover additional costs themselves.

On February 9, 2016, Democratic State Senator William Beasley introduced SB 182, which called for straightforward Medicaid expansion as outlined in the Affordable Care Act. The bill remains in committee.

Under Alabama’s current requirements, average monthly Medicaid enrollment has grown 11 percent from before the ACA through June 2016. See for a full overview of Alabama’s Medicaid and CHIP programs.

Other reform provisions in Alabama

The Affordable Care Act established a federal loan program to encourage the creation of nonprofit, consumer-run health insurance issuers – called Consumer Operated and Oriented Plans (CO-OPs).  By January of 2013, 24 CO-OPs had received loans totaling $1.98 billion. However, several of these CO-OPs struggled with low enrollment or faced financial difficulties in their infancy and 12 CO-OPS had announced their closure by 2015.

Alabama did not create a CO-OP.

Is there a high-risk pool in AL?

Before the ACA reformed the individual health insurance market, coverage was underwritten in nearly every state, including Alabama.  Because pre-existing conditions were a factor in eligibility for coverage, some people were unable to purchase a private plan at all, or were only able to get one that excluded their pre-existing conditions.

The Alabama Health Insurance Plan (AHIP) was created in 1998 to give applicants an option for coverage if they were ineligible to purchase individual health insurance because of their medical history.  But unlike risk pools in many other states, AHIP was only available to applicants who were HIPAA eligible, coming off of a group plan with no more than a 63-day gap in coverage.

Under the ACA, all new health insurance policies became guaranteed issue starting on January 1, 2014. This change largely eliminated the need for high risk pools and MCHA stopped enrolling new members as of January 1, 2014.  In March 2014, the Alabama Senate passed SB 123, allowing AHIP to “cease operations upon allowing current participants enough time to transition out of the plan.” But the plan website has not yet announced a termination date for existing members.

Medicare enrollment in the state of Alabama

Alabama Medicare enrollment reached 968,010 in 2015, about 20 percent of the state’s population compared with 17 percent of the population enrolled in Medicare nationwide.

Historically, Alabama has had the second-highest percent of Medicare recipients listed as disabled, 24 percent, tied with Mississippi and just below Kentucky’s 25 percent. The other 76 percent of Alabama Medicare beneficiaries qualify based on age alone.

As of 2014, Medicare paid about $9,150 annually per Alabama enrollee each year. Based on data available for 2009, the state ranked 19th in overall spending with $8.04 billion annually.

Alabama Medicare recipients can opt to enroll in Medicare Advantage plans instead of original Medicare if they wish to gain additional benefits beyond what traditional Medicare coverage offers. 25 percent selected Medicare Advantage in 2015, compared with 31 percent nationwide.

Forty-seven percent of Alabama Medicare beneficiaries (455,086) are enrolled in Medicare Part D plans, which provide stand-alone prescription drug coverage.

State-based health reform legislation

Recent Alabama legislation related to healthcare reform:

  • SB147 was signed into law and became Act Number 2015-227 in May 2015. This legislation ensures that insurance executive compensation in Alabama will be kept confidential. As such, it is not subject to open records requests, Freedom of Information Act (FOIA) requests, or subpoena.

Here’s a summary of other recent Alabama bills related to healthcare reform (the 2017 legislative session in Alabama ended on May 19):