Health insurance in Alabama
- Alabama uses the federally facilitated marketplace and enrolls through HealthCare.gov.
- Open enrollment for 2021 coverage in Alabama will run from November 1-December 15, 2020. Residents with qualifying events can still enroll or make changes to their 2020 coverage.
- Short-term health plans can be sold in Alabama with initial plan terms up to 364 days.
- Two insurers are offering 2020 coverage through the Alabama exchange.
- About 160,000 enrolled in 2020 coverage through the Alabama exchange.
- Alabama continues to reject the ACA’s Medicaid expansion.
- As of April 2020, there were 1,056,255 Alabama residents enrolled in Medicare.
Alabama’s health marketplace
Alabama uses the federally facilitated marketplace, so residents enroll in exchange plans through HealthCare.gov. For 2021 coverage, open enrollment will run from November 1, 2020 through December 15, 2020. Outside of open enrollment, people with qualifying events can change plans or enroll, depending on their circumstances.
Two carriers – Blue Cross Blue Shield of Alabama and Bright Health – offer plans through the exchange in Alabama.
160,429 people enrolled in individual market plans through Alabama’s exchange during the open enrollment period for 2020 coverage, down nearly 18 percent from peak enrollment in 2016.
Read our full overview of the Alabama health insurance marketplace.
Medicaid coverage in Alabama
Alabama has not accepted federal funding to expand Medicaid under the ACA. An estimated 324,000 Alabamans would gain coverage if the state were to accept federal funding to expand the program.
The federal government covers 90 percent of the cost of Medicaid expansion in the states that have accepted the funding. But Alabama is among the shrinking minority of states that continue to reject Medicaid expansion. As a result, there are 134,000 Alabama residents who live in poverty and have no realistic access to health coverage (many of the people who would become eligible for Medicaid under expansion are people with income between 100 and 138 percent of the poverty level, who are currently eligible for premium subsidies in the exchange; people with income below the poverty level are currently in the coverage gap in Alabama and any other state that hasn’t expanded Medicaid).
Read more about Alabama’s and ACA’s Medicaid expansion.
Short-term health insurance in Alabama
Alabama doesn’t have state regulations for short-term health insurance plans, so the state defaults to new federal regulations. That means short-term plans are allowed to have initial terms up to 364 days, and total duration – including renewal – of up to 36 months.
Read more about short-term health insurance in Alabama.
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. According to US Census data, the uninsured rate in Alabama in 2013 was 13.6 percent, and that had fallen to 9.1 percent by 2016 — although it had increased to 10 percent by 2018 (there has been a nationwide uptick in the uninsured rate under the Trump administration).
The national uninsured rate was 8.9 percent in 2018, but Alabama’s rejection of Medicaid expansion leaves more than a hundred thousand residents without any realistic access to coverage, and results in an uninsured rate that’s significantly higher than it would otherwise be. A 2020 analysis by the Robert Wood Johnson Foundation estimated that if Alabama were to expand Medicaid, the state’s uninsured rate would drop by 43 percent — the largest projected drop among all of the states that have not yet expanded Medicaid.
The vast majority (90 percent) of Alabama residents who enrolled in qualified health plans (QHPs) through Alabama’s health insurance exchange (i.e., Healthcare.gov) in 2020 received financial assistance to cover a significant portion of their premiums. Average premium subsidies in Alabama in 2020 amounted to $561 per month (covering the majority of the average $691/month premium).
Alabama and Obamacare
In 2010, Alabama’s Congressional delegation opposed the health reform law. Senators Jeff Sessions and Richard Shelby both voted no on the law while six Alabama representatives voted no in the House. Sessions was subsequently appointed Attorney General by President Trump, and a highly watched special election resulted in Doug Jones — a Democrat — winning Sessions’ former seat (Sessions resigned as Attorney General in 2018, and announced in 2019 that he will run for Senate again in 2020 in an effort to win back his old seat).
Shelby remains in the Senate, so Alabama’s Senate delegation is split now, with one Democrat and one Republican. In the House of Representatives, Alabama has six Republicans and one Democrat. All of Alabama’s Republican Representatives voted yes on the American Health Care Act, which was the 2017 legislation that would have repealed major portions of the ACA. That bill ultimately died when it failed to pass in the Senate.
At the state level, then-Governor 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. Bentley was replaced in 2017 by Gov. Kay Ivey, who is strongly opposed to the ACA. The state has not accepted federal funding to expand Medicaid under the ACA.
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.” By 2017, the AHIP website was no longer operational.
Medicare enrollment in the state of Alabama
As of April 2020, there were 1,056,255 Alabama residents enrolled in Medicare.
Alabama Medicare recipients can opt to enroll in Medicare Advantage plans or Original Medicare — there are pros and cons either way. Thirty-seven percent of Alabama beneficiaries were enrolled in Medicare Advantage in 2018. The national average was 34 percent.
In 2018, about 35 percent of Alabama Medicare beneficiaries were enrolled in stand-alone Medicare Part D plans, which provide prescription drug coverage. Most Medicare Advantage plans include Part D coverage, so most people who purchase stand-alone Part D plans are enrolled in Original Medicare.
Read more about Medicare in Alabama, including the state’s rules for Medigap plans.
Alabama health insurance resources
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.
Scroll to the bottom of this page for a summary of other recent Alabama bills related to healthcare reform.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.