Successful exchange broadens focus
Access Health CT has been widely considered one of the most successful state-run exchanges, and their technology platform was adopted by neighboring Maryland starting with the second open enrollment period. Enrollment in the exchange has continued to climb, and the state’s uninsured rate is now below four percent.
As Access Health CT gears up for their fourth open enrollment period, the exchange is looking beyond their initial mission of getting people enrolled in health coverage. They’re broadening their focus to include teaching people how to use their health insurance and ensure they’re receiving adequate preventive care, reforming the healthcare delivery system, helping consumers accurately calculate the cost of healthcare, and initiatives to make coverage and care more accessible and affordable.
Access Health CT is working to develop a claims database that will include cost and payment information (without personally-identifying details) for all health plans in Connecticut. The Supreme Court ruled in March 2016 that self-insured businesses could not be compelled to submit their claims data, which means the database may only end up including claims data for about two-thirds of the state’s residents.
Access Health CT had filed an amicus brief with the Court, asking them to agree that all payers – including self-insured employers – should be compelled to submit claims data; the Court ultimately did not agree. Even so, the database will provide a good source of information for insurers, healthcare providers, employers, and residents of Connecticut. Jim Wadeligh, CEO of Access Health CT, hopes the site will be up and running by the summer.
116,019 people enrolled in private plans through Access Health CT during open enrollment for 2016. For perspective, total private plan enrollment by the end of March 2015 stood at about 110,000 people; the 2016 enrollment total represented a five percent increase over the prior year. The enrollment total at the end of the 2016 open enrollment period was also above the high-end goal of 115,000 enrollees that Access Health CT had set for 2016.
78 percent of Access Health CT’s enrollees are receiving premium subsidies, and 32 percent are new to the exchange for 2016. Enrollees for 2016 are an average of 3.5 years younger than 2015’s enrollees.
In February, Access Health CT reported that 8,000 people hadn’t paid their initial premiums and their coverage had been terminated. But as Charles Gaba explains, the people who signed up in the latter half of January hadn’t even reached their March 1 effective date by that point, and their initial premiums weren’t overdue, even if they hadn’t been paid yet. Gaba estimated that about 92.5 percent of the initial enrollees had paid their premiums, which is better than the 88 – 90 percent national average.
Special enrollment periods now require proof of qualifying event
Now that open enrollment has ended, coverage for 2016 is only available for purchase – on or off-exchange – if the applicant has a qualifying event (Native Americans can enroll year-round without a qualifying event, as can anyone eligible for Medicaid -HUSKY – or CHIP).
This has been the case since 2014, but Access Health CT did not require proof of eligibility for special enrollment periods in 2014 and 2015. As a result, people who enrolled outside of open enrollment tended to use more healthcare services and were more likely to subsequently drop their coverage than people who enrolled during open enrollment. Starting in 2016, Access Health CT has said they will require proof of a qualifying event in order to grant a special enrollment period.
Healthcare.gov had the same lax enforcement of special enrollment period eligibility in 2014 and 2015, but they’re also tightening up the process of verifying qualifying events in 2016, and hope to reduce the adverse selection that has been taking place outside of open enrollment.
Market share by carrier
There was some shifting of market share among the four insurers that offer health plans through Access Health CT:
- In 2015, ConnectiCare had about 42.3 percent of the exchange market share, and they increased to 53 percent of exchange enrollees for 2016.
- In 2015, Anthem had 39.8 percent of the exchange market share, but they dropped to 33 percent of the 2016 enrollees.
- In 2015, Healthy CT (the CO-OP) had almost 15.6 percent of the exchange market share, but they dropped to just under 12 percent for 2016.
- In 2015, UnitedHealthcare had 2 percent of the exchange market share, and they also dropped for 2016, ending up with 1.3 percent of this year’s enrollements.
ConnectiCare’s increase in market share is not surprising, given that they were the only exchange carrier with an average rate decrease for 2016 (more details below).
Carriers cannot eliminate broker commissions
UnitedHealthcare had announced in late 2015 that they would not pay commissions for plans sold in 2016 (nationwide, not just in Connecticut). But the Connecticut Insurance Department issued regulations in February 2016 stating that carriers are required to pay broker commissions throughout the year, since commissions were included in the rate filings that carriers submitted in 2015, for plans effective in 2016.
UnitedHealthcare and the CT Insurance Department reached a compromise of $10 per plan commission, which is 50 percent reduction from the previous commissions. The other three carriers never attempted to reduce commissions in Connecticut for 2016.
Connecticut is one of four states that has taken action to limit carriers’ ability to cut broker commissions in an effort to reduce sales. Colorado, Kentucky, and California have taken similar steps, and commissions continue to be paid in those states for plans sold during special enrollment periods throughout the year.
When carriers are allowed to eliminate broker commissions, the result can be that commissions are eliminated on plans with higher metal levels (which appeal to sicker enrollees who need better coverage), or on plans sold outside of open enrollment. The states that have taken steps to protect broker commissions have done so in an effort to ensure that everyone has access to professional advice, including sicker consumers and those who experience a qualifying event during the year.
UnitedHealthcare exiting Access Health CT for 2017
In November 2015, UnitedHealthcare announced that they might exit the exchanges at the end of 2016. So it was no surprise when they started announcing in April 2016 that they would exit the exchanges in certain states at the end of the year. In mid-April, it became clear that they would only remain in a “handful” of exchanges in 2017, and Connecticut is one of the many states where UnitedHealthcare is exiting the exchange at the end of this year.
This story is certainly big news, and many media outlets are quick to point out that UnitedHealthcare is the largest insurer in the US. That’s true, but their focus is not the individual market – which is primarily what the exchanges offer.
So although UnitedHealthcare is exiting Access Health CT at the end of 2016, it’s important to keep in mind that they only have 1,477 enrollees in the individual market through Access Health CT, and just 124 people covered under small group plans through the Access Health CT SHOP exchange. Their market share is dramatically smaller than the other three carriers that offer plans in 2016, and their exit has to be viewed from that perspective.
The exchange reassured UnitedHealthcare members that they will help them with the transition to a new plan during the open enrollment period that begins on November 1. And as long as people continue to pay their premiums, their coverage will remain in effect for the remainder of 2016.
Exchange reaching out to new citizens
Access Health CT is the first exchange to actively reach out to people who are newly-naturalized citizens, letting them know about their coverage options and the special enrollment period that applies for people who gain citizenship.
Access Health CT is sending representatives to the naturalization ceremonies in US District Courts in New Haven, Bridgeport, and Hartford, so they can be on hand to provide information to the newly-naturalized citizens. Roughly 15,000 people become citizens in Connecticut each year.
Impact on the uninsured rate
In Connecticut, there were still 247,000 uninsured residents in 2015, according to Kaiser Family Foundation data (census data put the number at about 248,000 in 2014) and Access Health CT worked to enroll as many of them as possible during open enrollment. According to Kaiser Family Foundation data, a quarter of the people who were still uninsured in 2015 were eligible for premium subsidies in the exchange, and 28 percent were eligible for Medicaid.
Access Health CT has pegged the uninsured rate lower than the census data and KFF data. Their estimate is that there were still 136,000 uninsured residents in the state in 2015. But Access Health CT’s CEO Jim Wadleigh has said he wants to move away from using the uninsured rate as a gauge for how well the exchange is performing. He prefers other metrics that relate to public health, like how many people have a primary care physician and are receiving regular check-ups.
Even still, on the sixth anniversary of the ACA becoming law, Wadleigh noted that the exchange had enrolled over 700,000 people in coverage so far and had played a significant role in reducing the state’s uninsured rate to 3.8 percent (the enrollment total includes Medicaid and CHIP. In addition to private health plans, 138,908 residents enrolled in Medicaid/CHIP through the exchange during the 2014 open enrollment period, and 277,336 did so during the 2015 open enrollment period; Medicaid/CHIP enrollment continue year-round, but tend to spike during open enrollment).
1.6 percent weighted average rate increase
In May 2015, the Connecticut Insurance Department released the 2016 rate filings that carriers in the state had filed. UnitedHealthcare’s rate request for their off-exchange plans was a whopping 33 percent, but it was an outlier, and it was also only for off-exchange coverage. For the four carriers that offer plans on Access Health CT, the weighted average requested rate increase was initially 7.7 percent.
But over the next two months, the requested rate changes in Connecticut were adjusted downwards twice, ending up at 2.9 percent for plans sold through Access Health CT (and 5.2 percent marketwide, including off-exchange plans).
In September 2015, regulators released final rates for Connecticut, reducing the rate hikes even further. The final weighted average 2016 rate hike was just 1.63 percent for plans sold on Access Health CT (market share is as of March 2015):
- Anthem (39.8 percent of enrollees) = 2.4 percent increase (Anthem originally requested a 6.7 percent increase, but revised it down to a requested 4.7 percent increase in July)
- ConnectiCare (42.3 percent of enrollees) = 1.3 percent decrease (carrier originally requested a 2 percent increase, but revised it down to a requested 0.7 percent increase in July)
- Healthy CT (15.6 percent of enrollees) = 7.2 percent increase (HealthyCT, an ACA-created CO-OP, had originally requested a rate increase of 13.96 percent, but revised their request down to a 3.43 percent increase in July. Ultimately, insurance regulators found that to be insufficient and determined that a 7.2 percent increase would be necessary. This came on the heels of a rate decrease for 2015 – most of the country’s CO-OP’s lowered their rates in 2015, but ultimately ended up losing money throughout the year).
- United Healthcare (2 percent of enrollees) = 5.5 percent increase (United originally requested a 12.4 percent increase but revised it down to a requested 11.4 percent increase in July).
Market-wide, including off-exchange plans, the Connecticut individual market had a weighted average rate increase of 3.53 percent for 2016. In Connecticut’s small group market, things look even better: a market-wide weighted average rate decrease of 2.9 percent.
In Hartford, the average benchmark premium in 2016 is 1.2 percent less expensive than it was in 2015, but consumers should keep in mind that the benchmark plan isn’t necessarily the same plan from one year to the next – it’s just the second-lowest-cost Silver plan in a given area for a given year. So although subsidy amounts are tied to the benchmark prices, changes in benchmark premiums aren’t an accurate indicator of what’s happening with overall rates.
During the 2016 open enrollment period, Wadleigh noted that enrollees who “actively shop for plans are seeing a 4 to 6 percent decrease in premiums this year,” while “customers who are staying with their current plan [from 2015] are seeing a 2 to 4 percent increase, on average. These are some of the lowest increases in the country.”
In 2014, Connecticut had the 4th highest premiums in the US, but a Kaiser Family Foundation analysis found that Connecticut ranked 9th in the country for average benchmark plan premiums in the exchange in 2015. For 2016, benchmark premiums in Hartford are lower than benchmark premiums in major metropolitan areas of 11 other states.
And in good news on the rate front, ConnectiCare has stated that the average age of their enrollees declined from 2014 to 2015, and it declined again in 2016 (enrolling “young invincibles” has been a primary goal for all of the exchanges, as they tend to be relatively healthy). In addition, carriers in the exchange have said that although there was an influx of previously uninsured enrollees in 2014 who had “pent-up” healthcare needs, that’s likely to level out at time goes by and more people are continuously insured.
Regulators ultimately approved a rate increase of just 2.4 percent for Anthem for 2016, but when Anthem revised their proposed rate change from 6.7 percent down to 4.7 percent in July, they noted that the initial filing was based on claims data through March, while the second filing was based on claims data through May. Clearly, claims started to taper off as the spring wore on, indicating that the initial surge in demand for healthcare from newly-insured members doesn’t necessarily continue long-term.
The ACA had some built-in mechanisms to stabilize premiums, but two of them – reinsurance and risk corridors – were only established as three-year programs. So as of 2017, they will no longer exist, and the general assumption is that rates will increase as a result. The current estimate for Connecticut is that rates will climb by an average of $25 to $30 per month in 2017 as a result of the reinsurance and risk corridors programs winding down At ACAsignups, Charles Gaba translated that into a one-time 5 to 6 percent rate increase. But again, that’s not part of the calculation that was used for 2016 rates.
CO-OP beating the odds
By the end of 2015, 12 of the 23 CO-OPs that were created under the ACA had shut down. But Connecticut’s CO-OP, HealthyCT, is still selling plans for 2016. HealthyCT lost $28 million in 2014, and although the rate of losses slowed in the first half of 2015, they still lost $9.5 million by mid-2015.
In late 2015, HealthyCT CEO Ken Lalime said that the carrier has enough reserves to continue operating without making a profit for another 12 to 18 months, although he anticipated that the CO-OP will be profitable within that time frame.
In order to be successful, start-up health insurance carriers must experience enrollment growth, but with premiums that are high enough to cover claims and administrative expenses. Admittedly, that’s a tough target to hit. In 2014, HealthyCT had projected 25,000 enrollees but they had less than a third of that amount – just 7,966 members – at the end of 2014. That year, HealthyCT’s rates were among the highest on Access Health CT, hampering their enrollment goals.
But the CO-OP lowered premiums for 2015 to among the lowest offered through Access Health CT. As a result, their membership grew considerably. They had 31,212 members in mid-2015, and enrollment had increased to 36,000 by early November. Their 2016 rates are not as competitive as they were in 2015, but their rate increase was still modest, at 7.2 percent. Lalime is expecting growth in 2016, but he said most of it will likely be outside the exchange.
Unlike many other CO-OPs, HealthyCT wasn’t counting on the risk corridors payout that they were owed for 2014. So when CMS announced in October 2015 that carriers would get just 12.6 percent of what they were owed, the blow wasn’t as significant for HealthyCT as it was for some of the other CO-OPs. Unlike most CO-OPs, HealthyCT also sells coverage in the large group market, which means they can have a stronger off-exchange presence than carriers that just sell individual and small group plans.
HealthyCT also built its own provider network, instead of having to pay to rent a network from another carrier, as was the norm for many CO-OPs. HealthyCT was created by the Connecticut State Medical Society and their association of independent physicians. Lalime was the executive director of the Connecticut State Medical Association for nearly 15 years before he left to run HealthyCT. So he had an advantage in terms of recruiting doctors to participate in HealthyCT’s network.
Access Health CT fee increase
In May 2015, the Access Health CT board of directors approved an increase in the fee levied on health insurance carriers to support the exchange. The fee was previously 1.35 percent of premiums, but has increased to 1.65 percent in 2016. For reference, Healthcare.gov has a 3.5 percent assessment, but Healthcare.gov’s assessment only applies to plans sold through Healthcare.gov. Access Health CT’s assessment applies to all individual and small group premiums in Connecticut, regardless of whether they’re on or off-exchange.
Carriers in Connecticut had filed their initial 2016 rate proposals in April 2015, and the revised rates described above were filed in July. Despite the fact that the fee hike had been announced in the interim, the revised rates were mostly lower than what the carriers had initially filed.
But exchange still on solid financial ground
Although many other state-run exchanges are struggling to become financially self-sustaining now that federal funds are drying up, Access Health CT is on solid financial footing. The exchange board approved an $81.6 million budget proposal for the 2016 fiscal year, but more than half of that amount will be reimbursed by the state Department of Social Services, as it’s money that’s spent to enroll people in the Medicaid program.
The new budget reduces spending by nearly 25 percent, and Access Health CT’s CEO Jim Wadleigh noted that Connecticut is “the best positioned state in the country” in terms of having an exchange that’s on track to be financially self-sufficient.
Access Health CT’s CFO Steven Sigal noted in mid-2015 that while the exchange wants to have nine months of reserves on hand, at that point it had between five and seven months of reserves. Increasing the carrier fee to 1.65 percent of premiums should help bolster the exchange’s reserve cushion.
By March 26, 2015, enrollment in private plans through Access Health CT had reached 110,095 people. That included everyone who selected a plan, although some enrollees never paid their initial premiums, and others opted to cancel their coverage early in the year. As of March 31, HHS reported that 98,269 people had effectuated private plan coverage through the exchange in Connecticut, although that number fell to 92,213 by the end of June (attrition is a normal part of the individual health insurance market, particularly with the new system that conducts the bulk of the year’s enrollment during a single quarter – during the rest of the year, overall effectuated enrollment will naturally decline).
But by mid-September, the Connecticut Mirror was reporting an effectuated enrollment of 96,621 people in Access Health CT, which represented a 4.8 percent increase since June.
Access Health CT worked to obtain documentation to verify income and immigration from thousands of 2015 enrollees whose initial application wasn’t complete with that data. About 7,000 of them did not respond to repeated requests for information, and risked losing their coverage as a result – but the exchange noteed that they would work with carriers to get coverage reinstated if the enrollees were able to provide the necessary documentation. Another 16,000 people had already submitted the required documentation by August 2015.
A study conducted in Connecticut in June found that 50 percent of the people who were new enrollees in the exchange for 2015 were previously uninsured. 38 percent of the people who enrolled in private plans during the second open enrollment period were new to the exchange for 2015. Of the people who had in-force coverage at the end of June, 78 percent were receiving premium subsidies and 42 percent were receiving cost-sharing subsidies.
Access Health CT – like most other states – offered a special enrollment period (SEP) in the spring of 2015 for individuals who were previously unaware of the tax penalty for being uninsured. The requirement for insurance went into effect in 2014, but many people only learned about the penalty when they filled out their 2014 tax forms. The penalty-related SEP ran from April 1 through April 30, and Access Health CT announced that 1,429 people enrolled in private plans through the exchange during the SEP.
From November 15, 2014 through February 15, 2015, a total of 277,336 people enrolled in Medicaid or CHIP through Access Health CT. If you qualify for Medicaid (HUSKY), you can enroll anytime throughout the year, although enrollment does tend to peak during the open enrollment period for private plans, due to the outreach activities conducted by the exchange. Native Americans can also enroll in private plans through the exchange year-round.
2015 health plans and premiums
Four health insurers offered individual and family plans through Access Health CT for 2015. Anthem, Connecticare and HealthyCT returned from 2014, and UnitedHealthCare joined the exchange for 2015.
Regulators in Connecticut pushed back on the 2015 rates proposed by insurers. Connecticare and Anthem both requested increases of more than 10 percent, which regulators reduced to 3.1 percent or less. HealthyCT received approval to reduce its rates an average of 8.5 percent.
According to the Commonwealth Fund, 2015 rates on Access Health CT decreased 1 percent on average for individual coverage and 2 percent on average for family coverage. Although Connecticut had the 4th highest premiums in the nation in 2014, there were eight states where the average benchmark premiums in the exchange were higher than Connecticut’s in 2015.
Penalties going up for those not insured
The penalty for not having health insurance was higher in 2015 than it was in 2014, and it has increased again for 2016.
For those who remain uninsured in 2016, the fee will be the greater of 1) two and a half percent of annual household income above the tax filing threshold, OR 2) $695 per uninsured adult (half that amount for a child under 18) up to $2,085 for the family. The fee will be assessed when you file your 2016 taxes in 2017.
Learn more about the penalty and who is exempt.
History of Connecticut’s exchange
Connecticut was one of the early adopters in implementing a health insurance marketplace. Gov. Malloy signed legislation in 2011 to create the Connecticut Health Insurance Exchange, which was rebranded as Access Health CT in February 2013. The U.S. Department of Health and Human Services (HHS) approved Connecticut’s blueprint for a state-run exchange in December 2012.
Access Health CT describes itself as an active purchaser, but did not negotiate 2014 rates with health plans. Connecticut’s Fairfield County made the Kaiser Family Foundation list of the top 10 most expensive health insurance markets in 2014. Prompted by concerns over high premiums, Connecticut legislators revisited the issue during the 2014 session. SB-11 would have allowed Access Health CT to negotiate with insurers for plans sold in 2016. However, the bill did not pass (although perhaps counter-intuitively, premium analyses from 2014, 2015, and 2015 have found that state-run exchanges that use a clearinghouse model – as opposed to an active purchaser model – have lower overall average premiums).
Access Health CT has been one of the nation’s most successful marketplaces. Signs of that success include:
- Connecticut’s uninsured rate dropped by 50 percent: from 7.9 percent in 2012 to 4 percent in 2014.
- Connecticut launched a consulting business through which other states can license Access Health CT’s technology or pay Access Health CT to manage various marketplace functions. According to an article in the CT Mirror, nine states have expressed interest.
- Access Health CT’s former CEO, Kevin Counihan, was tapped to take over as the CEO of the federal exchange, HealthCare.gov. Jim Wadleigh took over the CEO role. Wadleigh previously served as the exchange’s chief information officer.
In addition to launching its own health insurance exchange, Connecticut also opted to expand Medicaid under the ACA, using federal funds to increase income eligibility for the program to 138 percent of the poverty level. There have been media reports that Connecticut is cutting back on Medicaid coverage for some enrollees, but Medicaid expansion under the ACA is still in place in Connecticut, and will continue to be in place going forward. The cuts are for parents with dependent children, who are currently eligible for Medicaid with household incomes up to 201 percent of the poverty level; the eligibility threshold is being reduced to 155 percent of the poverty level (in 2015 for households without earned income from a job, and in the summer of 2016 for households with earned income from a job).
Connecticut health insurance exchange links
Access Health CT
State Exchange Profile: Connecticut
The Henry J. Kaiser Family Foundation overview of Connecticut’s progress toward creating a state health insurance exchange.
Connecticut Health Reform Central
Information about exchange planning and development