Two individual market carriers in 2016
In 2015, DC Health Link offers 31 individual plans from three carriers (Aetna, CareFirst, and Kaiser). But Aetna is discontinuing 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 will only be 26 different plans available; 11 from Kaiser and 15 from CareFirst. Kaiser’s plans are all HMOs, while CareFirst will offer a mix of HMOs and PPOs.
Aetna has 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 will terminate at the end of the year. Aetna’s enrollees will be able to choose replacement coverage from among the 26 plans that will be offered by CareFirst and Kaiser next year. DC Health Link Director Mila Kofman has noted that Aetna’s individual market share was small, so their exit won’t impact most of the exchange’s enrollees.
Open enrollment begins on November 1, for coverage effective January 1, 2016. Aetna’s individual market enrollees will have an opportunity to enroll during the regular open enrollment period, but they’re also eligible for a special enrollment period triggered by a qualifying event (loss of other coverage). The earlier they select a new plan, the better likelihood they have of receiving their new policy by the end of the year. But technically, they can enroll anytime until December 31 and still get a January 1 effective date (without a qualifying event, the enrollment deadline to get a January 1 effective date is December 15), and they also have until the end of February to select a new plan for 2016 – a full month past the end of open enrollment (the special enrollment period lasts for 60 days following the loss of other coverage).
For the two remaining carriers in the individual market, regulators from the Department of Insurance, Securities and Banking (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 has significantly more market share than Kaiser in 2015, despite the fact that Kaiser has lower premiums (CareFirst also dominated the market in 2014). But Kaiser’s premiums are increasing by a slightly higher percentage than CareFirst’s, which will help to even out the premiums. Across the whole individual market – not including Aetna’s enrollees – the average rate increase for 2016 is just 4.25 percent, which is far below the national average.
Plan Match tool helps consumers choose
In September, 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 is already available for consumers shopping for 2015 plans as a result of a qualifying event, and it will be available to anyone shopping for individual coverage during the open enrollment period that begins November 1. DC Health Link anticipates the launch of a similar tool for small group enrollees at some point in the future.
Small group market
The small group market will have 136 plans available in 2016, and all four carriers will continue to participate in the small group market. There will be some shuffling around of available options on the small group market however; 77 of the current small group plans are being terminated, and 17 new plans are being added. For plans that are continuing from 2015 to 2016, the average rate increase is 4.74 percent.
There are about 19,800 people enrolled in small business plans through DC Health Link, which is drastically more than most states have enrolled (DC Health Link has fewer than 15,000 insureds in the individual market; in every other exchange, individual enrollments far outnumber small group enrollments).
Just as there is no off-exchange enrollment available for individuals in DC, use of the SHOP is 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 business protested the decision. The board maintained the requirement, but did allow some businesses until 2015 to comply.
But DC’s small business enrollments are comprised mostly of Congress members and their staffers, who account for 16,100 of the small business enrollees in DC. 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 Personal 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.
Funding plan creates 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, and its long-term funding plan triggered a lawsuit. The exchange’s current budget is about $28 million, but Kofman has 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 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 have not been 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 are 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 has 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 is 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 late January, 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, 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 to be collected annually, starting in the summer of 2015. On July 21, 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 are new to the exchange for 2015, and about 10 percent are 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 is the only other state that requires individuals to purchase coverage through the marketplace.
DC Health Link also announced that as of June 9, Medicaid enrollment through the exchange had reached 83,465 people since October 1, 2013. Not all of those people have remained on Medicaid however.
Open enrollment for 2015 is over, including the special enrollment period (SEP) for District residents who learned when they filed their 2014 federal tax returns that they were being penalized for not having health insurance. The SEP ran from March 15 through April 30. Since then, individual coverage has only been available to applicants who have a qualifying event. There are some exceptions though: Native Americans can enroll year-round, as can applicants who are eligible for Medicaid/CHIP. Small businesses can enroll in SHOP plans year-round as well.
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 is 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
Implementing Health Insurance Exchanges: District of Columbia
The Henry J. Kaiser Family Foundation overview of the District of Columbia’s progress toward creating a state health insurance exchange.