Highlights and updates
- Open enrollment will last 3 months (twice as long as most states)
- CareFirst & Kaiser remaining in exchange, adding more plans
- Proposed average rate increase: 26% individual; 11% small group
- Robust small group market used by Congress and staffers
- Only 4% of enrollees receive premium subsidies (nationwide it’s 84%)
DC exchange overview
In DC, coverage in the individual and small group markets is only available through DC Health Link, the state-run exchange; there’s no option to select an off-exchange plan.
According to a Kaiser Family Foundation analysis, DC Health Link had enrolled 74 percent of eligible DC residents as of February 1, 2016. This was dramatically higher than the 46 percent average across the whole US. And while DC has a significant advantage in this regard due to the fact that there are no off-exchange plans available, Vermont had the same limitation on off-exchange plans through the end of 2015, but Vermont Health Connect had only enrolled 49 percent of the state’s eligible enrollees.
The National Center for Health Statistics reports that the District of Columbia attained an uninsured rate of just 3.7 percent in 2016 — tied with Wisconsin for the third-lowest rate in the country.
Open enrollment will 2018 will run for three months
Nationwide, open enrollment for 2018 coverage is scheduled to be much shorter than it was in previous years. It will run from November 1, 2017 to December 15, 2017 — lasting just over six weeks, which is half the length of the last several open enrollment periods.
The new time frame for open enrollment is half as long as originally scheduled, and the new dates were announced in April 2017, less than seven months before the start of open enrollment. In order to avoid undue pressure on state-run exchanges (as opposed to those that use HealthCare.gov), HHS noted in the new regulation that state-run exchanges would be able to use their flexibility to establish special enrollment periods that could be used to essentially extend open enrollment.
DC Health Link announced in June that open enrollment for 2018 would follow the originally scheduled time frame: Beginning November 1, 2017 and ending January 31, 2018. Colorado and Minnesota have also extended open enrollment, but only until mid-January; DC Health Link is — so far — the only state-run exchange that has opted to keep the full three-month open enrollment schedule for 2018 coverage.
All insurers remaining, more plan options proposed for 2018
DC Health Link offers individual market plans from CareFirst Blue Cross Blue Shield (HMOs and PPOs as two separate entities) and Kaiser. Small group plans are available from four insurers: Care First, Aetna, Kaiser, and UnitedHealthcare (as is the case in the individual market, some of these insurers offer plans under two separate entities in the small group market).
May 1, 2017 was the deadline for DC insurers to file rates and plans for 2018 coverage. All of the current exchange insurers have filed rates and plans for 2018 coverage. And while some areas of the country are facing a dearth of choices in their exchanges, DC’s insurers have filed proposals for more plans in 2018 than they offer in 2017: In the small group market, 158 plans were filed (up from 151 this year) and in the individual market, 26 plans were filed (up from 20 this year).
Insurers filed the following average rate increases, which are now under consideration by the DC Department of Insurance, Securities, and Banking, with a public hearing scheduled for August 17:
- CareFirst HMO (CareFirst Blue Choice): 39.6 percent (6,176 current members)
- CareFirst PPO (GHMSI): 19.7 percent (7,795 members)
- Kaiser: 13 percent (2,484 members)
If rates are approved as filed, that’s a weighted average rate increase of 26.1 percent in DC’s individual market for 2018. That’s a little lower than the average across the five other states where rate filings had been publicized as of mid-May.
Small group market
- CareFirst (GHMSI): 15.3 percent (26,013 members)
- CareFirst Blue Choice: 9.5 percent (33,120 members)
- Kaiser: 5 percent (3,882 members)
- Aetna Life Insurance Company: 7.4 percent (800 members)
- Aetna Health: 9.4 percent (410 members)
- UnitedHealthcare Insurance Company & UnitedHealthcare of the Mid-Atlantic: 10.2 percent (8,509 members and 127 members, respectively)
If rates are approved as filed in the small group market, that’s a weighted average rate increase of 11.4 percent.
In mid-May, DC Health Link launched their new Broker Quoting Tool, designed to make it easier for brokers to “develop and customize the optimal benefit coverage for prospective employer clients.”
DC Health Link SHOP exchange: A solution for people in other parts of the country?
DC Health Link’s small business (SHOP) exchange is robust, both in terms of enrollment and insurer participation. Part of its success is because members of congress and their staffers are required to use DC Health Link SHOP exchange to get their coverage, if they wish to keep their employer contribution to their health insurance. DC Health Link SHOP plans include nationwide network options, which is important due to the fact that members of congress and their staffers live all over the country.
In May 2017, Senator Claire McCaskill (D, Missouri) announced legislation that would allow people in counties without any exchange insurers to purchase coverage through DC Health Link, just as members of congress and their staffers currently do (McCaskill’s press release noted that she forfeits her employer contribution, and instead buys coverage in Missouri, through HealthCare.gov, paying full price).
There are not currently any counties that are imminently facing a complete lack of insurers in the exchange in 2018, but it could certainly happen, especially with the level of uncertainty surrounding health care reform in 2017.
The text of McCaskill’s legislation is not yet available as of May 19. Congress and staffers obtain coverage through DC’s SHOP exchange, which is set up for employer contributions but not individual market premium subsidies. So it’s unclear how people would get their premium subsidies through DC’s exchange under McCaskill’s bill.
Uncertainty regarding market stabilization for 2018
DC Health Link Director, Mila Kofman reported in a podcast in mid-April that the market stabilization rules that HHS finalized in April 2017 (which had not yet been finalized as of Kofman’s podcast) could end up having the opposite effect, creating less stability in the insurance markets. Specifically, she pointed to the proposed rule (which was finalized even more strictly than proposed) that allows insurers to deny coverage to applicants who lost coverage under one of the insurer’s plans within the past 12 months for non-payment of premiums. Under the new rules, the insurer can require the applicant to pay up the past-due premiums before enrolling. Kofman points out that this situation (loss of coverage due to non-payment of premiums) is particularly likely among young, healthy enrollees. And the new rules make them less likely to re-enroll, since they may not have the money to pay up past-due premiums before re-enrolling.
Mid-way through the 2017 open enrollment period, the percentage of new enrollees in DC Health Link was 47 percent higher than it had been a year earlier (mid-way through the open enrollment period for 2016). And 60 percent of the new enrollees for 2017 at that point were 34 or younger, which is the demographic that’s most needed in health insurance risk pools to balance out the claims costs for older, sicker enrollees. That’s also a demographic more likely to skip enrollment if roadblocks (like those in the market stabilization rule) are put in their way.
Kofman explained that the best thing the Trump Administration could do in terms of market stability is to ensure ongoing funding of cost-sharing subsidies, strongly enforce the individual mandate, and stop creating uncertainty via continued talk of ACA “repeal and replace.” She also reiterated DC leadership’s commitment to making the insurance market work, and the fact that all options are being considered in terms of localized actions that might need to be taken to stabilize the market.
By the time open enrollment for 2017 concluded at the end of January, 21,248 people had enrolled in individual market plans through the exchange. HHS reported that effectuated (paid-up) enrollment stood at 18,038 as of February 2017.
By March 5, plan selections had grown to 24,351. New enrollees accounted for 7,207 enrollments, while the rest had renewed coverage from 2016. At that point, 18,683 people had in-force, paid-up coverage (19,424 had effectuated their coverage, but some had dropped it since paying their initial premiums). When rate filings were submitted in May 2017, however, the total in-force enrollment in the individual market stood at 16,455 (represented as people who will be impacted by the rate filings for CareFirst and Kaiser).
Kofman explained in mid-April that more than 19,000 people had effectuated coverage at that point (there are always some enrollees who either never pay their initial premiums, or who drop coverage soon after enrolling). Although enrollment at the end of open enrollment was lower than it had been a year earlier, effectuated enrollment was higher at the end of March; as of March 31, 2016, effectuated enrollment had been 17,266.
Of the people who had selected plans by March 5, only about 4 percent were receiving premium subsidies, and this was also the percentage reported in term of the number of people with effectuated enrollment who were receiving premium subsidies as of February. This is by far the lowest percentage in the country, and dramatically lower than the 84 percent average nationwide. Although DC Health Link’s default is to have subsidy-eligible consumers receive 85 percent of their calculated subsidy up-front each month (and reconcile the difference on their tax returns), the large majority of subsidy-eligible enrollees take more than 85 percent of their subsidy up-front.
The low number of subsidy-eligible enrollees in DC is likely due to a combination of the fact that there is no off-exchange market in the District, the median household income is among the highest in the country, and Medicaid eligibility is quite generous (so lower income applicants who would get subsidized QHPs in other states are eligible for Medicaid instead in DC).
As of December 2016, DC Health Link’s SHOP (small business) exchange had 58,323 enrollees. That’s far higher than any other state, but off-exchange small business plans are not available in the District. In addition, Congress and their staffers use DC Health Link’s SHOP exchange to obtain coverage (see details below), inflating the enrollment beyond what it would be if that were not the case. Kofman reported in April that total small business enrollment was up to about 67,000, and that about 11,000 of those were Congressional enrollees.
In-force small business enrollments as of March 5 stood at 66,222 enrollees, with a total of 4,076 businesses enrolled. When rate filings were submitted in May 2017, total in-force small group enrollment stood at 72,861. Small groups are not limited to open enrollment; business owners can purchase a plan at any point in the year, so enrollment can continue to climb throughout the year.
Rates and plans for 2017
The same carriers that offered plans in 2016 in DC’s exchange have continued to do so in 2017, although the total number of individual market plans available has dropped from 26 to 20 (but in the small group market, there are 151 plans, up from 136 in 2016).
The Department of Insurance, Securities and Banking (DISB) published a press release in May 2016 with details about the proposed rate changes that had been filed for 2017. In late September, they put out another press release with the approved average rate changes. In the individual market, the following average rate changes apply in 2017:
- CareFirst HMO (CareFirst Blue Choice): 22.8 percent (the carrier had requested a 13.3 percent average rate increase)
- CareFirst PPO (GHMSI): 1.8 percent (the carrier had requested no rate change for 2017)
- Kaiser Health Plan of the Mid-Atlantic (HMO only): 12 percent average rate increase (approved as requested)
There are a total of 20 plans available in the individual market in DC in 2017, including four PPOs and 16 HMOs. Plans at all four metal levels, plus catastrophic plans, are available from both CareFirst and Kaiser. CareFirst has a total of four PPO plans and five HMO plans (down from six and nine, respectively, in 2016), while Kaiser has 11 HMO plans available.
22.9k enrolled for 2016; 17.3k effectuated
22,912 people enrolled in qualified health plans (QHPs) through DC Health Link during the 2016 open enrollment period, including the two day extension that the exchange granted at the beginning of February (November 1 to February 2). For perspective, DC Health Link enrolled roughly 20,000 people during the 2015 open enrollment period, including the tax-season special enrollment period that was offered in 2015.
16,900 of DC Health Link’s enrollees already had coverage in 2015 through DC Health Link. The large majority of them — 13,815 people — were automatically renewed into the same plan they had in 2015. But 3,085 enrollees switched to a different plan for 2016, saving an average of four percent on their premiums.
6,012 enrollees are new to the exchange for 2016. In 2015, there were 4,879 new enrollees, so the exchange attracted 23 percent more new enrollees this year.
DC Health Link also noted that their new enrollees are younger than their existing enrollees. 61 percent of the exchange’s new enrollees are 34 or younger, whereas just 49 percent of existing enrollees (who have maintained coverage for 2016) are 34 or younger.
In July 2016, DC Health Link published another enrollment report, but it shows cumulative numbers – that is, enrollment totals since the exchange opened for business on October 1, 2013, including individual plans, small business plans, and Medicaid. The enrollment total of 22,912 people on individual private plans as of February 1 is still the most recent 2016 enrollment data that DC Health Link has publicized.
But the enrollment report published in July indicates that DC Health Link has enrolled 2,157 people in individual QHPs, 2,354 people in SHOP plans, and 14,344 people in Medicaid since open enrollment ended (Medicaid enrollment is year-round, and employers can purchase SHOP plans at any time during the year; enrollment in individual QHPs outside of open enrollment is limited to special enrollment periods).
In terms of effectuated (paid up) enrollments, there were 17,266 people with effectuated coverage in individual market plans through DC Health Link as of March 31. That’s a 25 percent attrition rate, which is much higher than the national average. People drop their coverage—or never pay for it—for a variety of reasons after open enrollment ends, but the impact appears to be more significant in DC than elsewhere in the country.
Just 6.9 percent of the effectuated enrollees were receiving premium subsidies in 2016 — by far the lowest rate in the country; the national average was nearly 85 percent. For DC residents receiving subsidies, their subsidies averaged $183 per month.
Small group market
For 2017, small group rates in DC only increased by an average of 0.36 percent, and unlike the rest of the country, DC Health Link has a very robust small group market (there’s no off-exchange small group market in DC, and Congress is required to use DC Health Link’s SHOP exchange, both of which have contributed to the high enrollment).
The small group market had 136 plans available in 2016, and all four carriers are continuing to participate in the small group market in 2017, with a total of 151 plans available. There was some shuffling of available options in the small group market for 2016: 77 small group plans from 2015 were terminated, and 17 new plans were added. For plans that continued from 2015 to 2016, the average rate increase was 4.74 percent. And starting on April 1, 2016, DC Health Link began offering dental coverage for small businesses.
By late 2015, there were about 19,800 people enrolled in small business plans through DC Health Link, drastically more than most states had enrolled. DC Health Link had fewer than 15,000 insureds in the individual market in 2015; in every other exchange, individual enrollments far outnumber small group enrollments. By December 2016, SHOP exchange enrollments in DC had grown to 58,823, and by April 2017, it had reached 67,000. For comparison, California (which has 58 times as many people as DC) had 29,544 people covered under SHOP plans.
Just as there is no off-exchange enrollment available for individuals in DC, use of the SHOP was mandated for all DC small businesses in a decision that drew strong criticism and pushback. Exchange officials said the mandate was necessary given the small population in the District. Without requiring small employers to participate, officials said, enrollment simply wouldn’t be high enough to sustain exchange operations. Small businesses protested the decision. The board maintained the requirement, but did allow some businesses until 2015 to comply.
Members of Congress and their staff use DC Health Link small business exchange
As of mid-2015, Congress and their staffers accounted for 16,100 of the small business enrollees in DC. That had fallen to about 11,000 by early 2017, despite the fact that overall SHOP enrollment in DC Health Link had grown considerably, to about 67,000 people. The Grassley Amendment to the ACA dictates that Congress and Congressional staffers can only be offered coverage through the exchange—as opposed to the FEHBP that’s available to other federal government employees.
DC Health Link is the designated marketplace for members of Congress and their official office staff following a rule issued by the Office of Personnel Management, which oversees benefits for federal employees. Congress and their staffers are eligible to continue receiving the federal employer contribution toward their coverage so long as they select a plan through DC Health Link’s SHOP exchange (note that they do not enroll in individual market plans, as they would not be eligible for an employer contribution for those plans; instead, they enroll in SHOP plans, which are jointly funded by employers and employees).
Congress and staffers are allowed to instead purchase individual market coverage (on or off-exchange) in their home states, but they would not be able to receive premium subsidies if their income is over 400 percent of the poverty level (which would be the case for all members of Congress and many staffers, unless they have very large families to support on their income), and employer contributions aren’t applicable to individual market coverage. So the only way Congress and staffers can get employer contributions to their health insurance is to select coverage in the DC Health Link small business exchange.
The OPM rule that allowed members of Congress and their staffers to retain the employer contributions to their premiums has not been without controversy, and President Trump has threatened to end the “bailouts” for members of Congress if Senate Republicans aren’t successful in their efforts to repeal the ACA (that threat came shortly after Senate Republicans failed to pass three different versions of the repeal bill that the House had passed in May.
Only exchange that extended 2016 open enrollment
Open enrollment for 2016 ended nationwide on January 31. In many states (including those that use Healthcare.gov), the exchange allowed enrollees who began the process by midnight on January 31 to finish enrolling past the deadline. But DC Health Link was the only exchange that gave additional time for all residents, regardless of whether they had begun the process by January 31.
DC Health Link issued a two-day extension, giving residents until February 2 at 11:59pm to enroll in a health plan for 2016, with coverage effective March 1. The exchange issued the extension due to high volume and the blizzard that hit the area in late January.
Two individual market carriers in 2016
In 2015, DC Health Link offers 31 individual plans from three carriers (Aetna, CareFirst, and Kaiser). But Aetna discontinued their six individual market plans in DC at the end of 2015, leaving just CareFirst and Kaiser for enrollees shopping for 2016 coverage. As a result, there are 26 different plans available; 11 from Kaiser and 15 from CareFirst. Kaiser’s plans are all HMOs, while CareFirst is offering a mix of HMOs and PPOs.
Prior to the start of open enrollment, Aetna sent letters to “hundreds” of DC insureds, letting them know that the carrier “can no longer meet the needs of [its] customers while remaining competitive in the market” and that their current coverage would terminate at the end of 2015. Aetna’s enrollees were able to choose replacement coverage from among the 26 plans offered by CareFirst and Kaiser for 2016. DC Health Link Director Mila Kofman has noted that Aetna’s individual market share was small, so their exit didn’t impact most of the exchange’s enrollees.
For the two remaining carriers in the individual market, regulators from the DISB reduced proposed rates across the board before approving them:
- CareFirst requested a 6.5 percent rate increase for their HMO products, and a 14.5 percent rate increase for their PPO plans. But regulators approved a 2 percent rate increase for the HMOs and a 4.6 percent rate increase for the PPOs.
- Kaiser had requested an 8.8 percent rate increase, and regulators approved a 6.6 percent rate increase.
CareFirst had significantly more market share than Kaiser in 2015, despite the fact that Kaiser had lower premiums (CareFirst also dominated the market in 2014). But Kaiser’s premiums increased by a slightly higher percentage than CareFirst’s, which helps to even out the premiums. Across the whole individual market – not including Aetna’s enrollees – the average rate increase for 2016 was just 4.25 percent, which was far below the national average.
Plan Match tool helps consumers choose
In September 2015, DC Health Link launched their new Plan Match tool that assists consumers in narrowing down the available options. DC joins a handful of other states that have created interactive tools to help consumers determine which health insurance plans will best meet their needs.
The Plan Match tool is anonymous, and users only need to enter their age, perceived health status, and anticipated medical needs. With that information, the tool compares projected out-of-pocket spending across all the available plans so that consumers will have a better idea of how each plan will work in their own specific circumstances.
The Plan Match tool first became available in September for consumers shopping for 2015 plans as a result of a qualifying event. DC Health Link anticipates the launch of a similar tool for small group enrollees at some point in the future.
Improved provider directory
In addition to the Plan Match tool, DC Health Link has also upgraded its provider directory. Real-time updates to the directory will make it easier for consumers to accurately determine whether their doctors are in the networks of the health plans they’re considering.
Funding plan created controversy
The District of Columbia’s health insurance marketplace, DC Health Link, was identified as the nation’s second most expensive on a per enrollee basis in 2014, and its long-term funding plan triggered a lawsuit. The exchange’s 2015 fiscal year budget was about $28 million, but Kofman requested $32.5 million for the 2016 fiscal year, in order to cover the cost of adding 19 full-time positions to their staff (instead of relying on contract workers).
DC Health Link’s funding plan was formed to meet the requirement that all state-run exchanges be self-sufficient by 2015. A number of state-run exchanges have placed a tax on premiums sold through the exchange.
However, given the District’s small population, a premium tax would have to be very high to sustain DC Health Link — 17 percent according to a Washington Post article. Accordingly, the D.C. Council approved a one percent tax on premiums for all health-related insurance plans sold in the District — not just those sold on the exchange.
The tax is designed to apply to plans that can’t be sold on the exchange, including hospital indemnity plans, disability coverage, and long-term care plans. There is no off-exchange market for standard health insurance in DC, and grandmothered plans were not allowed to remain in force in the District. But “health-related” plans has a much wider scope, and includes many products that were never intended to be sold in the exchange.
Many insurers that sell health-related insurance products outside of the marketplace were vehemently opposed to the plan, but the exchange has defended the tax by pointing out that people who have access to health insurance are more likely to buy the supplemental products sold outside the exchange. They view the exchange as a sales booster for other health-related insurance products, and want those carriers to bear part of the revenue burden for the exchange. And the funding proposal had strong support from the exchange’s insurers, as well as local advocacy and business groups.
But the American Council of Life Insurers filed a lawsuit in July 2014, claiming the tax was unconstitutional and a violation of the ACA. A U.S. District Court judge dismissed the suit in November 2014, writing that the ACA gave state-run exchanges broad authority to establish funding mechanisms.
In December 2014, the American Council of Life Insurers appealed the November ruling to the U.S. Court of Appeals for the D.C. Circuit. In March 2016, the appeals court vacated the district court’s dismissal of the case, allowing the possibility that it could once again move forward.
Meanwhile, in January 2015, the DC Council passed a temporary version of the exchange’s proposed funding model, imposing the one percent tax on all health plans and health-related plans. Then in May 2015, the Council approved the assessment to take effect immediately in order to fund the exchange’s 2016 fiscal year. The assessment will eventually undergo congressional scrutiny in order to become permanent.
The assessments are collected annually, starting in the summer of 2015. In July 2015, the board approved a measure that lays out exactly what products are exempt from the assessment, and also provides a means for assessed carriers to appeal their assessments.
2015 enrollment data
As of June 9, DC Health Link was reporting cumulative individual enrollment of 22,889 people (and 19,124 people in SHOP plans). But that includes people who enrolled in 2014 and didn’t keep their coverage for 2015. At ACAsignups, Charles Gaba has broken down the enrollments by year, and came up with 19,891 as of April 28, and another 535 people had enrolled by June 7, bringing the total to 20,426.
But HHS reported that 14,960 people in DC had effectuated (in-force) coverage in place as of the end of March (attrition is to be expected – not everyone pays the initial premiums due, so some plans are never effectuated). Effectuated enrollment declined slightly again during the second quarter, and stood at 14,637 by the end of June.
Of the people who enrolled in individual private plans during the 2015 open enrollment period, 26 percent were new to the exchange for 2015, and about 10 percent were receiving premium subsidies. This is dramatically lower than the rest of the country (nearly 84 percent of exchange enrollees nationwide are receiving premium subsidies), but DC does not allow the sale of off-exchange plans, so everyone who needs to purchase individual insurance in DC must do so through the exchange, regardless of whether they qualify for premium subsidies. Vermont had a similar requirement until the end of 2015, but every other state allows people to purchase coverage on or off-exchange (subsidies are universally only available in the exchange, however).
DC Health Link also announced that as of June 9, 2015, Medicaid enrollment through the exchange had reached 83,465 people since October 1, 2013. Not all of those people have remained on Medicaid however.
On October 21, 2015, DC Health Link reported that cumulative total enrollment from October 1, 2013 through October 16, 2015 stood at 173,090 people, including Medicaid, QHPs, and SHOP (small business) enrollments. They broke it down as follows:
- 25,702 people enrolled in a private qualified health plan,
- 125,261 people have been determined eligible for Medicaid, and
- 22,127 people enrolled through the DC Health Link small business exchange, including Congressional enrollment (members of Congress and their staffers are required to use the exchange as a result of the Grassley Amendment in the ACA)
The D.C. DISB approved 2015 premiums in September 2014. For individual plans, average rate changes by carrier varied from a 6.1 percent decrease to a 7.6 percent increase. For small group plans, the range was a 17.2 percent decrease to a 12.7 percent increase. See the DISB website for details.
Analysis by the Commonwealth Fund shows that the average increase for individual/family plans in 2015 was 11 percent. The analysis considered all marketplace carriers and metal levels.
Looking back on 2014 enrollment
During 2014 open enrollment, 10,714 people signed up for individual or family coverage through DC Health Link.
At 45 percent, the District led the nation in the percentage of people ages 18 to 34 signing up for private health plans during 2014 open enrollment. Nationally, the figure was 28 percent.
The selection of health plans was quite evenly spread across the metal levels in the District. Twenty-nine percent of health plan enrollees selected bronze plans, 25 percent selected silver plans, 22 percent selected gold plans, and 19 percent selected platinum plans. An additional four percent selected catastrophic plans, which are available only to those under 30 or those who qualify for a hardship exemption. Nationally, 2014 enrollment was heavily skewed to silver plans, with 65 percent of enrollees selecting these mid-level plans.
History of the District’s exchange
The District of Columbia was an early adopter in moving to implement a health insurance exchange. The Health Reform Implementation Committee (HRIC), formed at the direction of Mayor Vincent Gray, issued its final recommendations in October 2011. The D.C. City Council adopted many of the committee’s recommendations and passed a bill to create the District of Columbia Health Benefit Exchange Authority, which Gray signed it into law in January 2012. The District of Columbia received federal approval to operate a state-based exchange in December 2012.
In June 2013, the exchange was rebranded as DC Health Link.
District of Columbia health insurance exchange links
DC Health Link