Connecticut marketplace highlights and updates
- 2019 rate filings due July 16, 2018 (in 2017, the deadline was May 1)
- New law makes pregnancy a qualifying event, starting January 2019
- Lawmakers considered individual mandate, but it did not pass
- Lawmakers also consider reinsurance, but it did not pass
- Enrollment higher than 2017, despite much shorter enrollment period
- Average approved rate increase of 29.3 percent for 2018
- Premiums would have been lower without CSR funding uncertainty
- Broker commissions required for 2018
Connecticut exchange overview
Access Health CT is a successful state-run exchange that has dodged many of the technology problems that plagued other exchanges over the first few years of operation. But two of their four carriers exited the exchange at the end of 2016, and a third carrier briefly planned to exit the exchange at the end of 2016, but reversed that decision within 24 hours. So two carriers offered coverage through Access Health CT for 2017, and both are continuing to participate in the exchange in 2018.
ConnectiCare has the majority of the exchange’s enrollees (as has been the case since 2016), with more than 72 percent of Access Health CT enrollees picking ConnectiCare for 2018 coverage.
Access Health CT is an active purchaser exchange, which means that the exchange can negotiate pricing with the insurers and actively pick which plans they want to make available on the exchange (as opposed to a clearinghouse exchange model, in which all plans that meet the minimum requirements can be sold on the exchange).
According to the Connecticut Health Foundation, the ACA has reduced the uninsured rate in Connecticut by 45 percent, and created access to coverage for 160,000 people (mostly via Medicaid) who would not have been able to afford coverage without the ACA.
Jim Wadleigh has been CEO of Access Health CT since 2015, but announced in early 2018 that he would leave the position in April 2018. Until the exchange board hires a new CEO, three high-ranking staff members are leading Access Health CT: Chief Operating Officer Shan Jeffreys, Director of Finance James Michel, and Director of Human Resources Melinda Brayton.
Looking ahead to 2019
Rate filings for 2019 coverage are due in Connecticut by July 16, 2018. This is considerably later than last year, when rate filings were due in Connecticut by May 1, 2017.
Connecticut H.B.5210, which was signed into law in May 2018, mandates the ACA’s essential health benefits for individual and small group plans sold in the state, regardless of whether any future changes are made the federal level. The legislation also expands coverage for contraceptives by requiring coverage for all FDA-approved contraceptive measures, rather than just the FDA-approved contraceptives for women, which is what federal regulations require. There’s an exception in the legislation for HSA-qualified high deductible plans (HDHPs), since plans that cover male contraception before the deductible are not considered HSA-qualified under IRS rules (the IRS has granted a transitional period, through 2019, when they’re not enforcing this, since several states have recently mandated pre-deductible male contraceptive coverage).
But although Connecticut lawmakers also considered legislation to implement an individual mandate and to seek federal funding for a reinsurance program, neither of those bills passed in the 2018 session (details below).
Legislation to make pregnancy a qualifying event: Passed, and awaiting governor’s signature
Under the ACA, various life changes are considered qualifying events, and they trigger special enrollment periods, either in the exchange or in the entire individual market (all of these qualifying events are explained in detail in our guide to special enrollment periods). The qualifying events are similar to those that already existed for the employer-sponsored market, but there are some qualifying events that are specific to the individual market (prior to 2014, qualifying events weren’t necessary in the individual market, since people could apply year-round — but insurers could reject applicants based on medical history, and that’s no longer allowed).
The birth of a baby is considered a qualifying event under federal rules, but a pregnancy is not. HHS considered the possibility of changing this a few years ago, but clarified in 2015 that they had decided against making pregnancy a qualifying event.
But in New York, legislation took effect in 2016 that makes pregnancy a qualifying event. And pregnancy will also be a qualifying event in Connecticut, starting in 2019. S.B.206 passed 139-10 in the Connecticut House, and 35-0 in the Senate during the 2018 session. Governor Malloy did not sign it, but it became law automatically, without his signature, since he also did not veto it.
The new law calls for a special enrollment period that lasts for 30 days from the time a woman’s pregnancy is confirmed by a licensed health care provider. The special enrollment period will only apply to ACA-compliant individual market plans, and will only be available for women who do not already have minimum essential coverage. So it will not allow a pregnant woman to switch from, say, a bronze plan to a gold plan when she finds out she’s pregnant.
The bill was sent to Governor Malloy on May 18. The Connecticut Senate’s office did not anticipate any objection from the governor, given the overwhelming support the bill had during the legislative session. But Malloy had previously expressed concerns about a pregnancy-related special enrollment period, and opted to let the bill become law without his signature, as of June 1.
The text of the legislation states that the special enrollment period will apply to “pregnant individuals not more than thirty days after the commencement of the pregnancy, as certified by any licensed health care provider acting within the scope of such health care provider’s practice.” This is a bit ambiguous, and there was extensive debate in the Connecticut House in terms of whether that meant that the 30-day window would start when the pregnancy began (many women don’t realize they’re pregnant until more than 30 days after the pregnancy commences), or when the pregnancy is confirmed by a medical provider. But Senator Kevin Kelly (R-Stratford), who was a co-sponsor of the bill and is the Senate Republican chair of the Insurance and Real Estate Committee, confirmed that the special enrollment period would start when the pregnancy is confirmed by a medical provider, and would last for 30 days.
Now that the legislation has been enacted, pregnancy will become a qualifying event in Connecticut’s individual insurance market as of January 2019.
Enrollment higher than 2017, despite much shorter enrollment period
Enrollment for 2018 coverage through Access Health CT reached 113,134 people by the time open enrollment ended on December 22, 2017. For 2017 coverage, when open enrollment lasted three months instead of seven weeks, enrollment in Access Health CT plans ended up at 111,542 people. So enrollment ended up about 1.4 percent higher in 2018, despite the shorter enrollment period and GOP efforts to sabotage the ACA throughout 2017.
Open enrollment for 2018 coverage began on November 1, 2017, and continued until December 22, 2017, with all coverage effective January 1, 2018. This was different from previous years, when open enrollment continued into the new year, but it’s also a one-week extension of the open enrollment period that applied in most states this fall.
Under HHS guidance, open enrollment in states that use HealthCare.gov ended December 15, but state-run exchanges with their own enrollment platforms — like Access Health CT — had the option to extend open enrollment using a special enrollment period. Ultimately, ten of the 12 states with their own enrollment platforms had announced plans to extend open enrollment.
Access Health CT explained in June 2017 that the state’s insurers wanted all enrollees to have full-year plans for 2018, indicating that they were unlikely to extend open enrollment into January. But the one-week extension was a compromise that allowed people a little additional time to sign up, while maintaining full-year coverage for all enrollees.
In addition to the extra week at the end of open enrollment Access Health CT significantly increased access to in-person enrollment assistance during the fall 2017 open enrollment period. The exchange previously had two in-person enrollment assistance centers (in New Haven and New Britain), but spread their in-person assistance centers out across the state as of the start of open enrollment in November 2017, offering in-person assistance in Bridgeport, Danbury, East Hartford, Hartford, Milford, New Britain, New Haven, Norwich, Stamford, and Waterbury.
Lawmakers considered individual mandate in 2018, but bills did not pass
In late 2017, Republican lawmakers in Congress passed the Tax Cuts and Jobs Act, which eliminates the ACA’s individual mandate penalty after the end of 2018. So while there is still a federal penalty for being uninsured in 2018, that will not be the case in 2019 and beyond.
Several states considered state-based individual mandates during the 2018 legislative sessions, including Connecticut. Two bills — H.B.5039 and H.B.5379 —were introduced in early 2018, both of which would have implemented a state-based individual mandate in Connecticut. Neither bill passed in the 2018 session, though, and the legislature adjourned on May 9.
H.B.5039 was the more straightforward bill, with an individual mandate penalty resembling the ACA’s penalty, but slightly smaller: Only adults would have been subject to the penalty, and it would have been 2 percent of household income or $500 per uninsured adult (as opposed to the ACA’s 2.5 percent of household income or $695 per uninsured adult). The bill included other healthcare reform provisions as well. In March, a House committee removed the individual mandate provision altogether, so the most recent version of the bill did not include an individual mandate, and was instead focused on benefits that would be required on health plans, and surprise balance billing. The legislative commissioner’s office made the bill (without the individual mandate provision) available for a full House vote as of April 9, but the vote never happened and the bill died when the session ended a month later.
H.B.5379 incorporated ideas proposed by Yale economist, Fiona Scott Morton. It would have been a much more radical individual mandate, with penalties of up to $10,000 (applicable to households earning just over $100,000 a year) for people who chose to remain uninsured. The idea was that the penalty would be equal to the lowest-cost silver plan (after any applicable premium subsidies) in the exchange, making it an obvious choice for people to enroll in coverage rather than pay the penalty. Under ACA rules, the penalty is often much cheaper than purchasing health coverage, which makes some people opt for the penalty instead.
For people who don’t qualify for premium subsidies, but whose income isn’t drastically higher than the upper threshold for subsidy eligibility (400 percent of the federal poverty level) health insurance can often be much more than 9.66 percent of income. But H.B.5379 would have capped their penalty at the lesser of 9.66 percent of income or $10,000, and would have directed the penalty into a healthcare savings account, administered by the exchange, from which the household could then withdraw money to pay for health care.
Lawmakers also considered reinsurance legislation in 2018, but it did not pass
Legislation (H.B.5114) was also introduced in Connecticut in 2018 to create a reinsurance program (and an individual mandate), but it did not pass either. Incidentally, H.B.5114 would also have implemented an individual mandate and a tax penalty for failure to comply with the mandate.
The text of the bill was brief and did not contain any details about how the reinsurance program would have worked. Instead, it would have directed the Department of Revenue Services to “establish a task force to develop a reinsurance program that will enable the state to seek a “State Innovation Waiver” from the federal government.”
An innovation waiver (1332 waiver) can be used to obtain federal “pass-through” funding for a reinsurance program. The idea is that the reinsurance program would result in lower premiums, which would, in turn, result in lower premium subsidies. The amount the federal government saves on premium subsidies is then passed on to the state (rather than being kept by the federal government), and the state uses it to cover most of the cost of the reinsurance program.
Alaska, Oregon, and Minnesota have already obtained federal funding for reinsurance programs with 1332 waivers, and several other states are considering similar proposals in 2018. But Connecticut’s H.B.5114 did not advance out of committee in the 2018 session, which ended on May 9.
Average approved 2018 rate increase for Anthem and ConnectiCare = 29.3%, assumed CSR funding would be eliminated
Connecticut was among the states with the earliest rate filing deadline for 2018 coverage; rates and forms had to be filed with the Connecticut Insurance Department by May 1, 2017. Access Health CT confirmed by phone that both Anthem and ConnectiCare filed rates for 2018 exchange plans, although ConnectiCare filed a revised rate proposal in mid-May (both the original and revised filing are available in SERFF). The Connecticut Insurance Department had a public hearing about the rates in June, and maintained a public comment period from May 8 through July 1.
On September 13, the Connecticut Insurance Department announced that rates had been approved for both insurers.
Both insurers initially filed rates based on the assumption that cost-sharing reductions (CSR) would continue to be funded by the federal government. But amid ongoing uncertainty on that issue, the Connecticut Insurance Department eventually asked both insurers to refile new rates based on the assumption that CSR funding will not continue in 2018. Insurers were instructed to apply the additional cost of providing CSRs to the premiums for silver plans sold via Access Health CT (CSRs are only available on silver, on-exchange plans). Ultimately, the Trump Administration eliminated CSR funding in October 2017, so the Insurance Department’s decision turned out to be wise. And loading the cost of CSR only onto silver plans is the approach that protects the majority of consumers.
The final average rate increases that were approved by the Connecticut Insurance Department on September 13 are as follows:
- Anthem: 31.7 percent. Anthem has 35,000 policy-holders in 2017. Anthem had initially proposed a 33.8 percent average increase, and revised it to 41 percent after regulators asked the insurers to base their rate proposals on the assumption that CSR funding would be eliminated. The Insurance Department deemed that rate increase excessive. But the average rate increase that was ultimately approved by state regulators, was only a little lower than Anthem had proposed initially, despite accounting for unfunded CSRs.
- ConnectiCare Benefits, Inc.: 27.7 percent. ConnectiCare had 50,907 policy holders in 2017. ConnectiCare had originally proposed an average rate increase of 15.2 percent, but that was revised to 17.5 percent in May. The significantly larger approved rate increase was due to the new assumption that CSR funding would be eliminated. But it’s worth noting that the Connecticut Insurance Department only approved about half of the additional rate increase for silver plans that ConnectiCare had proposed to cover the cost of unfunded CSRs. The insurer had based its proposed additional rate increase on modeling that projected a migration away from silver plans if their rates climb relative to other metal levels, but the Insurance Department only allowed them to use actual enrollment experience to determine the necessary rate increase (Note that ConnectiCare Inc. and ConnectiCare Insurance Company are separate entities that offer plans outside the exchange).
- Anthem has fewer silver plan enrollees than ConnectiCare — relative to each insurer’s overall membership — which means that the loss of CSR has more of an impact on ConnectiCare’s business, necessitating a larger rate increase.
Based on the Insurance Department’s projected enrollment numbers for each carrier, the approved weighted average rate increase was 29.3 percent, assuming everyone kept the same plans in 2018.
When the rates were approved, the Connecticut Insurance Department’s spokeswoman, Donna Tommelleo, explained that “if certainty is given to federal CSR funding, it is the Department’s hope that states are given flexibility to approve rates that do not include the added amount for non-payment of CSRs.” But ultimately, certainty on the CSR funding question did come — but it was confirmation that CSR funding would indeed end. As a result, the rates that were approved for 2018 in Connecticut should end up being adequate, but not excessive.
2018 premiums would have been lower if CSR funding had been allocated
Throughout early and mid-2017, one of the most pressing concerns for market stability in 2018 was ongoing funding for the ACA’s cost-sharing subsidies. Insurers are required to provide better coverage to low-income enrollees who pick silver plans, and the federal government is supposed to reimburse insurers for doing so — to the tune of about $7 billion a year. In mid-2017, there were nearly 43,000 Access Health CT enrollees receiving cost-sharing subsidies. And during open enrollment for 2018 coverage, more than 53,000 people selected plans with cost-sharing subsidies.
But cost-sharing subsidies were the subject of a lawsuit since 2014, and the Trump Administration threatened to eliminate the funding throughout the time in 2017 when insurers were setting their rates for 2018 coverage. Not surprisingly, this caused considerable uncertainty in the market.
Without federal funding for CSRs, insurers either have to increase premiums (beyond the amount they would otherwise have to increase premiums), or exit the market altogether. To clarify, insurers are still required to provide cost-sharing reductions to eligible enrollees, even after the federal funding has been eliminated.
As described above, the Connecticut Insurance Department asked Anthem and ConnectiCare to submit supplemental rates for silver plans that were ultimately approved. The approach of putting all of the CSR load on silver plans is consistent with what the Congressional Budget Office deemed most useful to consumers. That’s because it allows the vast majority of the higher premiums to be offset by larger premium subsidies, while allowing people who don’t get premium subsidies to purchase bronze or gold plans (or platinum, where they’re available) that don’t include the increased premiums to cover the cost-sharing reductions. People who do receive premium subsidies but not cost-sharing reductions are also able to purchase bronze or gold plans that provide better values with the larger premium subsidies, since the premium subsidies are based on the cost of a silver plan but can be applied to any metal-level plan.
Because of the Insurance Department’s rate review process and ability to disapprove excessive rates, the overall weighted average approved rate increase for 2018 was only marginally higher than insurers had proposed earlier in the year, when the assumption was that CSRs would continue to be funded (29.3 percent, versus 24.2 percent).
But it’s notable that rates would have ended up lower than the initially proposed 24.2 percent increase due to the rate review process. The federal government’s failure to provide certainty to insurers regarding CSR funding (and ultimately, the government’s decision to eliminate the funding) resulted in sharply higher average premiums in the individual market for 2018. In states like Connecticut that opted to put the entire CSR load onto on-exchange silver plans (most states took the same approach), most of the additional cost is being borne by the federal government, in the form of higher premium subsidies (premium subsidies are based on the cost of the second-lowest-cost silver plan, so as those rates grow, premium subsidies also grow)
Throughout 2017, Access Health CT’s then-CEO, Jim Wadleigh, has expressed concern about the possibility that the exchange’s insurers might not return for 2018. In April 2017, Wadleigh said that he was “worried that [Access Health CT] could be seen as the first marketplace not to have carriers in 2018” and he reiterated that concern in August (this did not come to pass, as both ConnectiCare and Anthem are offering plans in the exchange in 2018).
In late August 2017, state regulators and the exchange added a two-week extension to the deadline for insurers to make a commitment to being in the exchange for 2018. Anthem and ConnectiCare were given until September 15 to commit to offering plans in the exchange for 2018; the previous deadline was September 8 (that deadline was already an extension; it had started at July 1, and subsequent extensions had pushed it out to September 1 and then September 8). Connecticut regulators had to finalize rates by September 30, a month ahead of the start of open enrollment.
ConnectiCare warned the exchange in May 2017 that if the Republican efforts to repeal the ACA continued to advance, the insurer would be forced to withdraw from the exchange (ultimately, GOP efforts to repeal the ACA did not pass, although GOP lawmakers did succeed in eliminating the individual mandate penalty starting in 2019). Anthem had already expressed reservations about ongoing exchange participation in 2018 (not just in Connecticut, but in all the states where they offer exchange plans; ultimately they pulled out of several states and scaled back their participation in others), and had told Wadleigh in an email in March 2017 that it was “highly probable” that they would withdraw from the market at the end of 2017, due to ongoing market uncertainty.
No broker commissions in 2017, but exchange began requiring them in 2018
Although two carriers offered plans through Access Health CT in 2017, neither of those carriers paid broker commissions for exchange plans in 2017 (both continued to pay commissions for off-exchange plans).
Connecticut regulators had previously stepped in to prevent carriers from cutting broker commissions for 2016, noting that the commissions were included in the filed rates (details below). But for 2017, neither exchange carrier included broker commissions in their rate filings for on-exchange plans.
About 40 percent of Access Health CT’s enrollments were done with the help of brokers for 2016, but most brokers were unable —or understandably unwilling —to work for free in 2017 (brokers do not receive any compensation other than the commissions paid by insurers, unless they’re paid as in-house, salaried staff for another entity). The exchange maintained an in-house staff of 21 brokers who are salaried, and they worked to assist enrollees for 2017. But by January 2017, Access Health CT could tell that the lack of broker support was hurting their enrollment and customer service efforts.
As a result, in late January 2017, the Access Health CT board of directors voted to require insurers to pay broker commissions for on-exchange plans, although they didn’t stipulate that the commissions had to be the same as off-exchange commissions (video of the board meeting is here; the discussion about broker commissions begins around the 8:30 mark, and the vote is around the 31 minute mark).
The board voted to require commissions for all on-exchange plans, and also to require commission parity between on and off-exchange plans. But Anthem filed rates for 2018 that included $5 per member per month commissions on-exchange, and $15 per member per month commissions off-exchange (this was included in the rate filing that was approved in September). This still effectively incentivizes brokers to enroll people off-exchange, but the customer service situation for Access Health CT should be better than it was during enrollment for 2017 coverage. ConnectiCare’s rate filing indicates a slight increase in administrative costs (which includes commissions), from 13 percent of premiums in 2017 to 13.9 percent of premiums in 2018. But that includes all administrative costs, which obviously encompasses much more than commissions.
Access Health CT has a web page where enrollees can find in-person assistance, including brokers. The exchange also has locations in New Haven and New Britain where enrollees can receive in-person help. Those locations will be relocated (within the same towns) during the open enrollment period in the fall of 2017, and eight additional in-person enrollment assistance centers will be opened as well.
State-run exchanges ask Congress to stabilize individual insurance market
In late August, 12 state-run exchanges (including two — Oregon and Nevada — that rely on HealthCare.gov for enrollment) sent a letter to the ranking members of the Senate Committee on Health, Education, Labor, and Pensions, asking them to take action to “stabilize and strengthen the individual health insurance market.”
Jim Wadleigh, Access Health CT’s CEO, is one of the signatories on the letter. The details of the letter are very similar to a letter that eight bipartisan governors also sent to Congress in late August.
The exchanges have asked Congress to:
- Allocate permanent funding for cost-sharing reductions (CSRs).
- Create a federal reinsurance program in every state (the ACA had one but it was temporary and only lasted through 2016; Alaska has established a reinsurance program and will get federal funding via a 1332 waiver; Iowa and Minnesota have also proposed 1332 waivers that would allow them to receive federal funding for reinsurance).
- Give states additional flexibility for 1332 waivers.
- Focus on long-term solutions, rather than temporary fixes. Insurance companies plan long-term, and insurance markets can’t adequately operate with constantly changing and uncertain regulations.
2018 small group exchange: 8 insurers participating
Eight insurers have filed rates for 2018 plans in Access Health CT’s SHOP exchange for small businesses. They include: Aetna, ConnectiCare Inc., ConnectiCare Insurance Co., Harvard Pilgrim, HPHC Insurance Co., Oxford Health Plans, Oxford Health Insurance, and UnitedHealthcare. At ACA Signups, Charles Gaba calculated an average proposed rate increase of 18.9 percent in Connecticut’s small group market (including on and off-exchange) for 2018.
Open enrollment for 2017 coverage began on November 1, 2016, and ended January 31. A total of 111,542 people enrolled in individual market plans through Access Health CT during open enrollment. That’s 3.9 percent lower than 2016 enrollment, when 116,019 people signed up.
There was an overall decline in enrollment across states that use HealthCare.gov in 2017, although states that run their own exchanges (which includes Connecticut) saw an average increase in enrollment. Declining enrollment is linked to a variety of factors, including higher prices and insurer exits from the exchange (both of which were an issue in Connecticut). But Connecticut also had no insurers paying broker commissions for on-exchange enrollments in 2017, which may have hindered enrollment by reducing the number of people available to assist with the process.
As of early May 2017, enrollment in private plans through Access Health CT stood at 100,303.
ConnectiCare remains in the exchange in 2017
ConnectiCare filed three separate 2017 rate proposals with the Connecticut Insurance Department (one in the spring, one on August 1, and another one later in August). In early September, Connecticut regulators announced that they had approved ConnectiCare’s second rate proposal, with an average increase of 17.4 percent. But they denied the carrier’s more recent request to raise rates by 27.1 percent, saying that the filing came in too late (they also rejected Anthem’s proposed 26.8 percent rate increase, directing the carrier to recalculate their numbers).
ConnectiCare had defended their proposed 17.4 percent rate hike during their hearing in early August, but later determined that even that level of rate increase would not cover their anticipated costs in 2017, and filed a new rate proposal on August 23. State regulators did not consider it, because they said the filing came too late.
Because state regulators refused to allow their last rate proposal (a 27.1 percent average increase) to be implemented for 2017, ConnectiCare filed a lawsuit against the Connecticut Insurance Department and has said that they would exit the Connecticut exchange if they are held to the currently-approved rate increase of 17.4 percent. ConnectiCare insured 47,600 people on their individual market exchange plans in 2016.
The day after the lawsuit was filed, a judge refused to grant ConnectiCare an injunction to prevent the already-approved rates from taking effect. That was on Friday, September 9. On Monday, September 12, ConnectiCare announced that they would exit the exchange at the end of the year, but noted that if they won their appeal regarding their latest proposed rate increase, they would like to re-enter the exchange for 2017. Without ConnectiCare, Access Health CT would have had just one carrier (Anthem) in 2017.
The Connecticut Insurance Department noted that they were reviewing the decision as of September 12. But by September 13, ConnectiCare had announced that they were reversing their decision, and would remain in the exchange for 2017. They agreed to the 17 percent average rate increase that the Insurance Department approved, and dropped their appeal for the higher rates. They will be allowed to raise the price of their off-exchange plans by an average of 38 percent (those plans are a separate product, called Solo).
At the end of open enrollment for 2016, ConnectiCare had 53 percent of the exchange market share — the highest of any of the four carriers in the exchange. As of the summer of 2016, there were about 47,600 people with ConnectiCare coverage through Access Health CT. The insurer’s decision to remain in the exchange means those people were able to keep their coverage in 2017.
HealthyCT shut down at the end of 2016
On July 5, 2016, the Connecticut Insurance Department announced that HealthyCT—the state’s ACA-created CO-OP—would no longer be allowed to issue new policies or renew existing policies, and would be shutting down at the end of 2016. HealthyCT had escaped the initial wave of CO-OP failures in the fall of 2015, but when it was determined that they would owe $13.4 million in risk adjustment payments, it became evident that they could not remain solvent.
HealthyCT had 13,000 individual market members, and 11,299 of them had coverage through the state-run exchange, Access Health CT. Their coverage continued through the end of 2016, but they needed to select 2017 coverage from another insurer during open enrollment.
UnitedHealthcare exited Access Health CT at the end of 2016
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 exited the exchange at the end of 2016.
Although UnitedHealthcare exited Access Health CT at the end of 2016, it’s important to keep in mind that they only had 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 was dramatically smaller than the other three carriers that offered plans in 2016, and their exit has to be viewed from that perspective.
Between HealthyCT and UnitedHealthcare, almost 13,000 exchange enrollees needed to select new coverage during open enrollment, as their plans are no longer available in 2017. But the large majority of Access Health CT enrollees did not need to switch plans during open enrollment unless they wanted to.
Rate changes for 2017
The Connecticut Insurance Department posted the proposed rate changes that were filed by all of the state’s carriers for 2017. When rates were filed there were still three carriers offering plans in the exchange, but with the announcement that HealthyCT would not offer plans in 2017, there are just two carriers offering coverage during open enrolment.
Anthem’s proposed rate increase was 26.8 percent. But the Connecticut Insurance Department rejected that rate proposal, and instructed the carrier to resubmit a new filing in early September. Ultimately, an average rate increase of 22.4 percent was approved for Anthem.
The two exchange carriers in Connecticut have the following average rate increases for 2017:
- Anthem: 22.4 percent
- ConnectiCare: 17.4 percent
The state conducted public hearings for Anthem and ConnectiCare’s proposed rates in early August (after HealthyCT’s closure was announced, but before ConnectiCare dropped out of the exchange).
For the entire individual market in Connecticut, the average rate increase is 24.8 percent for 2017. That’s higher than either of the average rate hikes for the exchange plans, because some carriers that only offer off-exchange plans have higher average rate increases. Five carriers — Aetna, Anthem, Cigna, ConnectiCare, and Golden Rule — are offering plans outside the exchange for 2017.
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. As of March 31, effectuated enrollment stood at 102,917. That’s an 11 percent attrition rate, which is a little lower than the national average.
Special enrollment periods now require proof of qualifying event
Outside of open enrollment, coverage 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 said they would require proof of a qualifying event in order to grant a special enrollment period. They further tightened up the requirements in 2017.
Healthcare.gov had the same lax enforcement of special enrollment period eligibility in 2014 and 2015, but they also tightened up the process of verifying qualifying events in 2016, in an effort to reduce the possibility of adverse selection taking place outside of open enrollment. Starting in the summer of 2017, the HealthCare.gov is requiring most people who apply outside of open enrollment to provide proof of their qualifying events before their application can be processed.
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, and the CO-OP is closing at the end of 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 not allowed to eliminate broker commissions in 2016
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.
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 beat the odds in 2015; but failed in 2016
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, was still selling plans for 2016. But 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 would 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 were not as competitive as they were in 2015, but their rate increase was still modest, at 7.2 percent. Lalime was expecting growth in 2016, but he said most of it would 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 sold coverage in the large group market, which meant they had 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.
But ultimately, the risk adjustment program proved to be the final nail in the coffin for HealthyCT. In the summer of 2016, the CO-OP owed $13.4 million to HHS under the risk adjustment program, and could not pay it and remain solvent. The carrier stopped issuing policies in mid-2016, and all exchange enrollees with with HealthyCT plans had to select coverage from another carrier during the open enrollment period for 2017 coverage.
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
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.