In DC, coverage in the individual and small group markets is only available through DC Health Link, the state-run exchange. DC is one of only two markets (Vermont is the other) where 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 is significantly 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 Health Connect has the same situation but has only enrolled 49 percent of those eligible to enroll in Vermont.
According to the National Center for Health Statistics, the District of Columbia now has an uninsured rate of just 3.7 percent—tied with Wisconsin for the third-lowest rate in the country.
Rates and plans for 2017
The same carriers that offer plans in 2016 in DC’s exchange will continue to do so in 2017, although the total number of individual market plans available will drop from 26 to 18 (but in the small group market, there will be 152 plans, up from 136 this year).
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 the individual market, carriers have requested the following average rate changes:
- CareFirst HMO: 13.3 percent average rate increase
- CareFirst PPO: no requested rate change
- Kaiser Health Plan of the Mid-Atlantic (HMO only): 12 percent average rate increase
CareFirst has nine HMO plans and six PPO plans in 2016. They filed 2017 rates for just four HMO plans and three PPO plans. But according to DISB, CareFirst filed new rates in mid-July to include a platinum plan, which was not included in their original filings. It does appear, however, that CareFirst will not offer any HSA-qualified plans in the individual market in DC in 2017.
Although the price comparison chart shows average CareFirst HMO rate changes varying from 2 percent to 12.7 percent, DISB explained that those numbers only apply to the four plans that are remaining unchanged from 2016 to 2017 (that will likely increase to five once the platinum plan is included). DISB noted that the actuarial average rate increase is 13.3 percent if nobody were to make any changes to their coverage for 2017. The lower average rate changes indicated on the price comparison chart only apply to the four plans that will still be available in 2017.
Last year, for 2016 rates, regulators in DC approved lower average increases than the carriers had requested (see details below). It remains to be seen whether regulators will approve the rates that have been requested for 2017, or make adjustments before approving them.
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—by far the lowest rate in the country; the national average is nearly 85 percent. For DC residents receiving subsidies, their subsidies average $183 per month.
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).
Only exchange to extend 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.
Small group market
The small group market has 136 plans available in 2016, and all four carriers will continue to participate in the small group market in 2017, when a total of 152 plans will be 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, which is drastically more than most states have 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.
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.
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 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 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 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.
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