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DC health insurance marketplace: history and news of the state’s exchange

The District of Columbia has an individual mandate in 2019, and a 60-day SEP for people who find out about it after open enrollment ended

District of Columbia exchange highlights and updates

District of Columbia exchange overview

State legislative efforts to preserve or strengthen provisions of the Affordable Care Act

How hard is the District of Columbia fighting to preserve the Affordable Care Act’s provisions? Compare to other state efforts.

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.

DC has enacted an individual mandate that took effect as of January 2019 (Massachusetts also has an individual mandate, and New Jersey also has one as of 2019; Vermont will have an individual mandate in 2020).

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 U.S. 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 (US Census data put the uninsured rate slightly higher, at 3.8 percent in 2017, tied with Hawaii for as the second-lowest in the country).

In most states, the individual and small group market risk pools are completely separate. But in two states (Vermont and Massachusetts), they’re merged. DC has what’s often referred to as a “modified merged risk pool.” Essentially, the two risk pools are merged for the purpose of setting the index rate. But then the index rate is adjusted to be specific to each market, based on factors that are not uniform across the two markets.

So things like risk adjustment transfers, network size, morbidity, broker fees, and medical trend end up resulting in DC’s individual and small group markets having different rates and rate changes (the individual market tends to be more volatile, as is the case nationwide). Because morbidity is a factor that allows the rates to be adjusted after the index rate is set, the “modified merged risk pool” in DC is essentially much more similar to the separate risk pools in most other states, and is quite different from the truly merged risk pools in Vermont and Massachusetts.

DC has implemented programs to ensure that all residents have access to health coverage, regardless of their income or health status. Medicaid coverage in DC is available to residents with income up to 216 percent of the poverty level. In addition, DC Health Alliance, Cover All DC, and Immigrant Children’s Program are available to DC residents regardless of immigration status.

DC Health Alliance and Immigrant Children’s Program are available at no cost, while Cover All DC allows residents to purchase full-cost private health insurance, even without a qualifying immigration status. The ACA prevents undocumented immigrants from buying coverage in the exchange, even without financial assistance, so DC created Cover All DC in order to provide an avenue for those residents to purchase coverage.

2019 enrollment

Open enrollment in Washington, DC began November 1, 2018, and continued until February 6, 2019 (it was originally slated to end January 31, but a six-day extension was issued at the last minute). In order to extend open enrollment beyond the federally-scheduled window (which ended December 15), DC Health Link added a special enrollment period from December 16 through January 31, and then extended it through February 6.

As of February 10, DC Health Link reported that they had 20,894 individual market enrollees for 2019. At ACA Signups, Charles Gaba notes that while this is lower than last year’s reported enrollments, the official tally that CMS compiles was lower last year than what DC Health Link reported, because the CMS report subtracts people whose coverage is never effectuated. So it’s likely that enrollment ended up lower in DC for 2019 than it was for 2018, but not certain. And in addition, DC Health Link is allowing more people to enroll, even after February 6, to account for the fact that people might not have been aware of the District’s new individual mandate prior to the end of open enrollment.

There were about 16,000 people with individual-market coverage through DC Health Link in 2018. (According to the October board meeting, the exchange had a total of 93,553 enrollees, but 77,596 of them have small-group coverage).

People who didn’t know about DC’s new individual mandate have a one-time 60-day special enrollment period for 2019 coverage

As described below, DC has its own individual mandate in 2019. It took effect on January 1, 2019, the same day the penalty for the federal individual mandate was reduced to zero.

But the District’s individual mandate and associated penalty weren’t signed into law until September 2018, and there wasn’t a lot of publicity about the new mandate during open enrollment. So on February 15, 2019 — more than a week after open enrollment had ended in the District — DC Health Link announced that they would grant a 60-day special enrollment period to people who find out about the District’s new individual mandate penalty while filing their 2018 taxes.

People who didn’t know about the penalty and find out about it during the 2018 tax season have to contact DC Health Link to qualify for the special enrollment period. If they contact the exchange before filing their 2018 tax return, their special enrollment period begins the day they contact the exchange. If they contact the exchange after filing their tax return, their special enrollment period begins the day they filed their 2018 taxes.

So a person who files their taxes on April 15, 2019, could contact DC Health Link to let them know that they didn’t know about the new mandate and penalty until filing their taxes, and they would then have until June 14, 2019 to sign up for a health plan for 2019. Assuming they were uninsured at the start of the year, they would still face a penalty for being uninsured for part of 2019, but would not have to wait until January 2020 to be covered (as would be the case if they had to wait until open enrollment to sign up) and be penalized for being uninsured the entire year.

The first round of assessed individual mandate penalties in DC will show up on tax returns that are filed in early 2020, for the 2019 tax year.

Average rate increase of 13% in the individual market for 2019 (down from the 15.5% that insurers proposed)

Proposed 2019 rate changes for DC health plans were published in early June 2018. In September, the DC Department of Insurance, Securities, and Banking published the final approved average rate changes for 2019:

  • Group Hospitalization and Medical Services (CareFirst PPO): 9.9 percent increase (reduced from the 16.7 percent increase initially proposed)
  • CareFirst Blue Choice (CareFirst HMO): 10.4 percent increase (slightly higher than the 9.5 percent increase that was initially proposed)
  • Kaiser of the Mid-Atlantic States: 20 percent increase (approved as initially filed)

The DC Department of Insurance, Securities, and Banking worked with the carriers to ensure that the rates were actuarially sound. As proposed, the 2019 rates would have amounted to a weighted average increase of 15.5 percent. But the final approved rate hike amounts to a weighted average increase of 13 percent instead.

It’s noteworthy that although DC’s individual mandate wasn’t finalized until September, it appears that the insurers based their proposed premiums for 2019 (filed in June 2018) on the assumption that the mandate would end up being implemented in the District. Both Kaiser and CareFirst noted in their rate filings that they were not adding a premium load for the elimination of the federal mandate penalty. That likely explains why the approved rate increases in DC were not significantly smaller than the proposed increases, despite the fact that the official approval of the District’s individual mandate happened between when rates were initially filed and when they were approved.

CareFirst also clarified that they were also not adding any sort of premium load as a result of the Trump Administration’s efforts to expand short-term health insurance plans.

The District of Columbia has enacted emergency legislation that limits the duration of short-term health plans to three months and prohibits renewals. In addition, the legislation (signed into law on December 10) also prevents short-term plans from excluding pre-existing conditions or basing eligibility on medical history. Permanent legislation has also been enacted, to take over when the emergency legislation ends, and most insurers that previously offered short-term health insurance in DC have stopped doing so.

Read more about short-term health insurance in DC.

Small-group health insurance premiums for 2019

In the small group market, the proposed rate increases were small or non-existent for the three largest insurers (based on enrollment), but quite significant for the insurers that have a smaller market share. However, the final average approved rate changes were generally much smaller than insurers had proposed:

  • Aetna Health: 3.4 percent increase (significantly smaller than the proposed 18.73 percent increase) (only 183 members)
  • Aetna Life: 9.5 percent increase (also significantly smaller than the proposed 23.48 percent increase) (only 468 members)
  • UnitedHealthcare of the Mid-Atlantic, Optimum Choice (United Healthcare HMO) and UnitedHealthcare Insurance Company: 9.8 percent increase (as opposed to the 17.9 percent proposed increase) (combined total of 1,519 members)
  • Kaiser of the Mid-Atlantic States: 0 percent — no rate change, approved as filed (2,356 members)
  • Group Hospitalization and Medical Services: 1.7 percent increase (down from the 5.2 percent increase initially filed) (14,729 members)
  • CareFirst Blue Choice: 1.9 percent increase (down from the 3.2 percent increase initially filed) (21,577 members)

At their October 2018 meeting, DC Health Link’s board of directors reported in December 2017 that 4,960 small businesses were enrolled in plans through DC Health Link’s small business marketplace, with a total of 77,596 covered members.

DC has an individual mandate in 2019

In the summer of 2017, the DC Health Link board created an ACA Working Group, comprised of insurers, small businesses, brokers, consumer advocates, and health care providers, with the goal of coming up with changes and improvements that DC could make at the local level to stabilize its insurance market and ensure that affordable coverage would continue to be available in the District.

In January 2018, the Working Group reconvened in order to address two new issues: President Trump’s October 2017 Executive Order that called for Association Health Plans to be expanded, and the December 2017 GOP tax bill that repealed the individual mandate (with a delayed implementation; the individual mandate will be repealed as of 2019).

In mid-February, the Working Group unanimously voted to recommend that DC implement its own individual mandate. The following week, the DC exchange board approved a resolution calling for an individual mandate in DC, and noting that without an individual mandate, enrollment in individual market plans in DC was projected to drop by 15 percent in 2019, with an associated premium increase of about 7 percent (healthy people would drop coverage, leaving a risk pool with overall poorer health and a smaller population over which to spread the costs, resulting in higher premiums for everyone). As of 2018, with the federal individual mandate in place, 96 percent of DC’s residents had health insurance.

In March 2018, DC Mayor, Muriel Bowser, unveiled her proposed Fiscal Year 2019 Budget, which included $1.1 million for implementation of an individual mandate in DC. That money would cover technology adjustments, changes to the DC tax code, and efforts to publicize the local individual mandate.

The city council considered Mayor Bowser’s budget and published their own proposed budget in mid-May. The DC City Council’s proposed Budget Support Act of 2018 included an individual mandate, with a penalty for non-compliance, effective as of January 2019 in DC. The city council approved the budget in June, with the individual mandate intact.

Republicans in Congress tried to intervene at that point, however, with a measure (which passed the House in July) that would have blocked the District from using local funding to implement an individual mandate. But the measure failed in the Senate in early August, paving the way for DC to move forward with their individual mandate.

The DC Budget was transmitted to Mayor Bowser in mid-August, and she signed it on September 5 (the final budget is here). The mandated, dubbed the “Individual Taxpayer Health Insurance Responsibility Requirement,” took effect in January 2019.

The mandate called for in the DC budget is much like the ACA’s federal mandate, but with some specifics to tailor it to DC’s needs. This chart provides an overview of how DC’s proposed mandate compared with the federal mandate, as of early 2018. But some changes were made along the way. For example, the early draft called for an exemption for people who have a gap in coverage of three months or less — instead of less than three months, as is the case under the federal mandate — but that modification was not included in the final version of the District’s mandate; people who are uninsured for three months in 2019 face a penalty in DC):

  • The mandate penalty is the same amount as the federal mandate penalty was in 2018 ($695 per uninsured adult, or 2.5 percent of household income, whichever is greater), but the maximum penalty is tied to the average cost of a bronze plan in DC, as opposed to the average nationwide cost of a bronze plan. The ACA penalty was supposed to be inflation adjusted annually starting in 2017 (the adjustment was $0 for 2017 and 2018), so DC will be responsible for setting the inflation adjustment each year.
  • Most of the exemptions that apply to the federal penalty also apply in DC, but with some changes. People with DC Healthcare Alliance coverage are considered covered and not subject to a penalty (under the ACA’s individual mandate, DC Healthcare Alliance is not considered minimum essential coverage), as are those covered under the Immigrant Children’s Program. People with fairly high incomes (up to 222 percent of the poverty level for people age 21 and older, and up to 324 percent of the poverty level for people up to age 20) are not subject to the penalty (Medicaid eligibility extends to these levels in DC, so this exemption basically just means people who are eligible for Medicaid are not subject to the penalty if they’re uninsured).
  • If the federal penalty is ever reinstated, people in DC would not be subject to two penalties. If that were to happen, the amount of the DC penalty would be reduced by the amount that the person owes under the federal penalty.
  • Crucially, new association health plans (AHPs) created under relaxed federal rules do NOT qualify as coverage under the DC mandate. But AHPs that already met federal rules as of 2017 (and are considered minimum essential coverage) continue to be considered coverage under DC’s mandate in 2019.
  • Money collected via the DC individual mandate penalty will be used for outreach to get uninsured people covered, and “activities that increase the availability of health insurance options or increase the affordability of insurance premiums in the individual health insurance market.

Massachusetts has an individual mandate that predates the ACA, and that continues to be in effect in 2019. New Jersey also has a mandate in 2019. Vermont will have an individual mandate starting in 2020. So DC was the fourth jurisdiction to impose an individual mandate, and is one of three localities that has an effective mandate in 2019.

Open enrollment for 2018

Nationwide, open enrollment for 2018 coverage was much shorter than it was in previous years. It ran from November 1, 2017 to December 15, 2017 — lasting just over six weeks, which was half the length of the last several open enrollment periods.

The new time frame for open enrollment was 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, 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 2017 that open enrollment for 2018 would follow the originally scheduled time frame: Beginning November 1, 2017 and ending January 31, 2018. Ultimately, ten of the 12 exchanges that operate their own enrollment platforms opted to extend open enrollment, but only three — DC, New York, and California — kept the full three-month open enrollment schedule for 2018 coverage. And at the last minute, DC Health Link opted to add another five days, extending open enrollment until February 5, 2018. All plans selected between January 18 and February 5 took effect on March 1. In announcing the five-day extension, DC Mayor, Muriel Bowser, directly stated that DC’s approach was in contrast to the federal government’s approach “which shortened the open enrollment period and slashed outreach and support.” Bowser noted that DC was “committed to giving our residents the time and support they need to get covered and stay covered.”

By the end of open enrollment, 22,717 people had enrolled in individual market coverage through DC Health Link, versus 23,779 the year before. 55 percent of all enrollees for 2018 were 34 or younger, which is a demographic that helps to stabilize the risk pools.

As is always the case, some enrollees didn’t pay their initial premiums and their coverage wasn’t effectuated. 17,630 people had paid-up individual market coverage in DC’s exchange as of February 19, 2018.

Notably, enrollment in small group plans through DC Health Link stood at 76,574 as of February 19, which is dramatically higher than small business exchange enrollment in other states. Members of Congress and their staff enroll in DC Health Link small business plans, but they account for only a small fraction of the total. The robust enrollment is likely due in large part to the fact that there is no off-exchange small group market in DC — all small businesses in the District that want coverage must enroll in plans via DC Health Link.

Of the people who had signed up for individual plans via DC Health Link as of mid-February, only a little more than 5 percent were receiving premium subsidies (1,219 out of the 22,717 who had enrolled). This was a little higher than 4 percent the year before, but by far the lowest percentage in the country. In 2017, an average of 84 percent of exchange enrollees nationwide were receiving premium subsidies. 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).

Insurers offering 2018 plans, rates increases

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 2017 exchange insurers filed rates and plans for 2018 coverage. And while some areas of the country were facing a dearth of choices in their exchanges, DC’s insurers is offering more plans in the individual market in 2018 than they offered in 2017, with 26 plans available for 2018, up from 20 in 2017. In the small group market, there continue to be 151 plans available from four different insurers.
The following average rate increases for 2018 were approved in October 2017 by DC regulators:

Individual market

  • CareFirst HMO (CareFirst Blue Choice): 19.6 percent (the initially proposed rate increase was an average of 39.6 percent). There were 6,176 members on these plans as of 2017
  • CareFirst PPO (GHMSI): 19.6 percent (the initially proposed rate increase was an average of 19.7 percent), There were 7,795 members on these plans as of 2017.
  • Kaiser: 13 percent, approved as initially filed. There are 2,484 members on these plans as of 2017.

As initially filed, the proposed weighted average rate increase was 26.1 percent. But due to the smaller-than-proposed increase for CareFirst’s HMO, regulators reported that the average approved rate increase would be 15.64 percent for the individual market, before accounting for premium subsidies.

Small-group market

In the small-group market, some insurers’ rate proposals were approved as filed, while others were adjusted during the rate review process. The following rate changes were approved in October 2017:

  • CareFirst (GHMSI): 15.5 percent (the initially proposed average rate increase was 15.3 percent) (26,013 members)
  • CareFirst Blue Choice: 7.2 percent (the initially proposed average rate increase was 9.5 percent) (33,120 members)
  • Kaiser: 5 percent, approved as initially filed(3,882 members)
  • Aetna Life Insurance Company: 7.4 percent, approved as initially filed (800 members)
  • Aetna Health: 9.4 percent, approved as initially filed (410 members)
  • UnitedHealthcare Insurance Company & UnitedHealthcare of the Mid-Atlantic: 5.6 percent (the initially proposed average rate increase was 10.2 percent) (8,509 members and 127 members, respectively)

As initially filed, the small-group market was facing an average rate increase of 11.4 percent, but the final approved rates represent an average increase of 7.26 percent.

In May 2017, 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.”

CSR funding fairly insignificant in DC

Throughout the country, the Trump Administration’s decision to cut off funding for cost-sharing reductions (CSR) had a significant impact on premiums for 2018. In many states, insurers had already filed rates based on the assumption that CSR funding would end, and in some of the other states, insurers scrambled to revise their filings to add the cost of CSR during an emergency refiling window that the federal government opened just before the start of open enrollment (CSR funding was eliminated on October 12; open enrollment began on November 1).

But in DC, the impact of CSR funding is minimal. Both CareFirst and Kaiser based their proposed rates on the assumption that CSR funding would continue for 2018. The Trump Administration announced in October 2017 that CSR funding would end immediately, although Congress could allocate CSR funding in the future, restoring federal funding for the program.

But CSR funding has a very minimal impact in the District. DC Health Link’s executive director, Mila Kofman, explains that only 300 people in DC receive CSR benefits, and the total cost is about $150,000 per year (as opposed to CBO’s nationwide cost estimate of about $7 billion in fiscal year 2017 and $10 billion in fiscal year 2018).

The reason so few people in DC receive CSR is that DC Medicaid covers people with income up to 215 percent of the poverty level (as opposed to 138 percent in most states that have expanded Medicaid). Under the ACA, CSR benefits extend to 250 percent of the poverty level, although they’re most robust for people with income up to 200 percent of the poverty level. But in DC, people with income up to 215 percent of the poverty level are on Medicaid instead of private plans in the exchange, which means they’re not using CSR.

Although the rate filings for CareFirst and Kaiser note that rates were developed based on the assumption that CSR funding would continue in 2018, it appears that it didn’t make much of a difference one way or the other, since it’s such a small factor in the cost of coverage in DC.

However, the effect of CSR defunding is regional, rather than being limited to DC. Kofman noted that “in DC, we are concerned about our carriers. They are regional (in MD and in northern VA). Also, the issue for us is big picture – when you take out $7 billion from the health insurance industry it will have a rippling effect on the entire private market.” [Ultimately, the lack of CSR funding has turned out to be a smaller issue than anticipated, because insurers in most states simply added the cost of CSR to their premiums for 2018. In most cases, they added the cost only to silver plan premiums, which results in much larger premium subsidies, and lower after-subsidy premiums for people who buy bronze and gold plans.]

So while CSR funding is not a significant factor in DC itself, the overall issue of CSR funding had an impact on the insurers that offer coverage in the DC area: Filings in Virginia were based on the assumption that CSR funding would not continue; rate that were initially approved in Maryland were based on the assumption that CSR funding would continue, but those rates were revised in late October to add the cost of CSR to on-exchange silver plans instead.

DC Health Link’s robust 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 (by December 2017, enrollment in DC Health Link SHOP had grown to 75,633 people — far more than any other SHOP exchange in the country). 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 weren’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. Ultimately, Congressional Republians failed in their 2017 efforts to repeal the ACA, but their tax bill did repeal the individual mandate penalty, albeit with a delay: the repeal takes effect in 2019.]

DC Health Link SHOP exchange

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, paying full price).

Although there were concerns in the summer of 2017 that some areas of the country might end up without any exchange insurers for 2018, that did not come to pass — all areas of the country have at least one insurers offering plans in the exchange. But the GOP tax bill that was enacted in late 2017 will eventually repeal the individual mandate penalty (starting in 2019), and while the Congressional Budget Office has noted that the individual market is expected to remain stable in “almost all areas of the country” without the mandate, that leaves the door open for potential market destabilization in some areas, with no insurers continuing to offer individual market coverage.

McCaskill’s legislation (S.1201, the Health Care Options for All Act) was introduced in May 2017, although it did not advance during the 2017 legislative session, and as noted above, the situation of “bare” counties did not end up being an issue for 2018. But the legislation called for the government to implement a system that would allow people in counties without any exchange options to instead purchase coverage (with applicable premium subsidies, if the enrollee is eligible) via the DC SHOP exchange. The SHOP exchange is currently set up to provide employer-sponsored coverage, but if S.1201 were to be enacted for a year after 2018, individuals would also be able to obtain DC SHOP coverage.

Uncertainty regarding market stabilization for 2018

DC Health Link Director, Mila Kofman reported in a podcast in April 2017 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.

[Note that a person’s past-due premiums would never be more than three months — if they get premium subsidies and their account is currently in the three-month grace period as of when they’re trying to re-enroll for the coming year — and would not be more than one month if their plan had already been terminated within the past year due to overdue premiums. If an account is terminated due to non-payment and the person was receiving premium subsidies, he or she would have received one month of coverage essentially free, and would have to pay back that month before enrolling in a new plan. But if the person was not receiving premium subsidies, the plan would have been terminated as of the last paid-up date, so the person would not owe any back premiums.]

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 was 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. Ultimately, cost-sharing subsidy funding was eliminated, but the fix that most states used (adding the cost to silver plan premiums, thus resulting in larger premium subsidies) has protected most enrollees across the country. And while the GOP tax bill does repeal the individual mandate, that won’t take effect until 2019.

2017 enrollment

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.

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.

Only exchange that extended 2016 open enrollment

Open enrollment for 2016 ended nationwide on January 31. In many states (including those that use, 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.

2016 rates

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)

2015 rates

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

DC Health Benefit Exchange Authority

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 Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.