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Alabama health insurance marketplace guide 2023
Two new insurers joining Alabama's exchange for 2023
Alabama exchange overview
Two new insurers (Ambetter/Celtic and Ascension/US Health & Life) are joining the Alabama exchange for 2023, bringing the total number of participating insurers to five.
During open enrollment for 2022 coverage, a record-high 219,314 people enrolled in private individual-market plans through the Alabama exchange.
Frequently asked questions about Alabama's ACA marketplace
As of 2023, five insurers will offer coverage through the exchange in Alabama, including two newcomers:
- Blue Cross Blue Shield of Alabama (plans available statewide)
- Bright Health (plans available in the Birmingham area)
- UnitedHealthcare (plans available in the Mobile, Dothan, and Huntsville areas)
- US Health & Live/Ascension Personalized Care (new for 2023, in Mobile County)
- Celtic/Ambetter from Alabama (new for 2023)
Historically, Alabama’s health insurance market was considered one of the least competitive in the nation. And although there are three insurers offering coverage in the state’s exchange in 2022, most of the state still only has plans available from Blue Cross Blue Shield of Alabama.
Humana and Blue Cross and Blue Shield of Alabama sold individual health insurance through the federal marketplace in Alabama for 2014. UnitedHealthcare joined the exchange for 2015, offering plans in all 67 Alabama counties. Those three insurers continued to offer plans in Alabama’s exchange in 2016, but Blue Cross Blue Shield still covered the majority of the state’s exchange enrollees.
United and Humana both left the Alabama exchange at the end of 2016. The Alabama Department of Insurance confirmed that both carriers’ exits applied to the entire individual market in the state, so individual market United and Humana plans were not available on or off-exchange in Alabama as of 2017, when Blue Cross Blue Shield of Alabama was the only health insurance carrier offering plans in the Alabama exchange.
Humana had 15,226 individual market members in Alabama in 2016, including both on and off-exchange. UnitedHealthcare’s total exchange enrollment in the state was 20,488 in 2015. All of these enrollees had to switch to BCBSAL in 2017 in order to continue to have coverage.
Although BCBSAL was the state’s lone exchange insurer in 2017, Bright Health joined in the Birmingham area in 2018 and has continued to offer coverage there. And for 2022, UnitedHealthcare returned to Alabama’s exchange, bringing the total number of insurers to three. As noted above, two additional insurers are joining the state’s exchange for 2023.
The open enrollment period for individual/family coverage runs from November 1 to January 15 in Alabama. Learn more in our comprehensive guide to open enrollment.
Outside of open enrollment, a qualifying event is generally necessary to enroll or make changes to your coverage. But some people can enroll without a specific qualifying event, including Native Americans and subsidy-eligible applicants with household income up to 150% of the poverty level.
According to ratereview.healthcare.gov, Alabama’s insurers have proposed the following average rate changes for 2022:
- Blue Cross Blue Shield of Alabama: 3.1% increase
- Bright Health: 8.1% increase
- UnitedHealthcare: 13.9% increase
- Ascension/US Health & Live: New for 2023 (so no rate change)
- Celtic/Ambetter: New for 2023 (so no rate change)
In July 2022, the Alabama Department of Insurance published a summary of the proposed rate changes for each specific plan that the insurers offers.
Average rate changes are calculated before premium subsidies are applied, and 94% of Alabama exchange enrollees receive premium subsidies. Subsidies are larger and more widely available than they used to be, thanks to the American Rescue Plan.
For perspective, here’s a look at how premiums have changed in Alabama’s exchange in previous years:
- 2022: Average rate increase of 6.7%. BCBSAL increased rates by an average of 7.15%. Bright Health decreased average premiums by 15.6% (after increasing rates by 22% the year before). UnitedHealthcare rejoined Alabama’s market in 2022 after a five-year hiatus, so they didn’t have any applicable rate change. The Alabama Department of Insurance published a summary of the proposed rate changes for each specific plan that the insurers offer; the approved rates were essentially identical to the rates that the insurers had proposed.
- 2021: Average increase of 5.3%. BCBSAL, which has the lion’s share of the market, increased premiums by an average of 5%. Bright’s increase was an average of 22%, but their filing indicated that they only had about 3,800 enrollees (versus 168,113 for BCBSAL). So the overall weighted average increase was about 5.3% for 2021.
- 2020: Average increase of 3.3%. Bright Health increased average premiums by about 9 percent, but Blue Cross Blue Shield of Alabama, which has most of the enrollment, only increased average premiums by 3.5 percent. The overall weighted average increase amounted to 3.3 percent.
- 2019: Average decrease of 2%. Both of the Alabama exchange insurers implemented 2019 rates that were lower than their 2018 rates. Bright Health had an average rate decrease of 15.55%. And Blue Cross Blue Shield of Alabama had an average rate decrease of 0.5% (ranging from a decrease of 3.8% to an increase of 3.9%, depending on the plan). These rate changes were approved as proposed for both insurers, and amounted to a weighted average decrease of about 2%. Both insurers noted in their rate filings that they expected increased morbidity (ie, a less healthy population, and thus premiums that are higher than they would otherwise have been) as a result of the elimination of the individual mandate penalty after the end of 2018, and the expansion of short-term health plans and association health plans. So although the insurers decreased their average premiums in Alabama in 2019, they would have decreased them even more if the individual mandate penalty had remained in place and if non-ACA-compliant plans hadn’t been expanded by the Trump administration.
- 2018: Average increase of 15.6%. The bulk of the increase applied to silver plans, due to the Trump administration’s decision to stop funding cost-sharing reductions; Alabama’s insurers have continued to add the cost of CSR to silver plan rates in subsequent years. This makes premium subsidies larger than they would otherwise be, since subsidy amounts are based on the cost of the benchmark silver plan in each area.
- 2017: Average increase of 36%. Blue Cross Blue Shield of Alabama was the only insurer offering plans for 2017, and their average rates increased by 36%. 2016 was the first year that the state took part in the rate review process for ACA-compliant plans (for 2017 coverage); in previous years, the federal government handled the review process, as Alabama did not have an effective rate review process. That changed in the spring of 2016 however, and the state collaborated with HHS to ensure that the rates and plans filed for 2017 were in compliance with ACA requirements. Although, like many other states, Alabama regulators do not have the power to reject rate increases or prevent them from taking effect.
- 2016: Average increase of 24.4%. In 2016, there were three insurers offering plans in Alabama’s exchange. Humana’s average rate increase was just under 9%, Blue Cross Blue Shield of Alabama’s was 28%, and UnitedHealthcare’s was 24.5%.
- 2015: Average increase of 3%, according to a study by the Commonwealth Fund.
219,314 people — a record high — enrolled in private individual market plans through the Alabama exchange during open enrollment for 2022 coverage. Here’s a summary of enrollment numbers in Alabama’s exchange over the years:
- 2014: 97,870 people enrolled
- 2015: 171,641 people enrolled
- 2016: 195,055 people enrolled
- 2017: 178,414 people enrolled
- 2018: 170,211 people enrolled
- 2019: 166,128 people enrolled
- 2020: 160,429 people enrolled
- 2021: 169,119 people enrolled
- 2022: 219,314 people enrolled
As was the case in the majority of the states that use HealthCare.gov, peak enrollment initially came in 2016 in Alabama. Enrollment in most states that use HealthCare.gov then declined until 2020, but increased somewhat in 2021 and hit a new record high in 2022 — the same pattern we see in Alabama.
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American Rescue Plan and Inflation Reduction Act have made coverage more affordable in Alabama
The American Rescue Plan, which was enacted in 2021, temporarily made subsidies larger and more widely available, by eliminating the income cap for subsidy eligibility and reducing the percentage of income that people have to pay for the benchmark plan. The Inflation Reduction Act has extended those provisions through 2025.
The ARP’s subsidy enhancements led to record-high exchange enrollment in 2022, both in Alabama and nationwide.
Insurance executive compensation is a secret in Alabama
Under a law passed in Alabama in 2015 (SB147, which became Act Number 2015-227 when it was signed into law), insurance executive compensation in Alabama is now kept confidential, and is not subject to open records requests, freedom of information requests, or subpoena.
The legislation was sponsored by Slade Blackwell (R, Mountain Brook), and passed with nearly unanimous support. It applies to all insurance companies in the state, but it primarily impacts Blue Cross Blue Shield — by far the dominant carrier in the state. That’s because national carriers, including Humana and UnitedHealthcare (the other two exchange carriers in Alabama) have to report executive compensation to the IRS and the SEC. But Blue Cross Blue Shield of Alabama (a state-based carrier) does not file with the SEC and doesn’t have to disclose executive compensation to the IRS.
Before Act 2015-227 took effect, it was public knowledge that the top ten executives at BCBSAL saw their compensation double from 2011 to 2013.
Reporter John Archibald described the new law as “royal treatment” for BCBS of Alabama, and it’s certainly concerning that executive compensation for the carrier is now protected from the public eye. But residents of Alabama are still protected by the ACA’s medical loss ratio, which requires carriers to spend at least 80% (85% in the large group market) of premiums on medical care and “quality improvements,” with administrative expenses — including executive compensation — coming out of the remaining 20% (15% in the large group market).
Alabama exchange history
The federal government operates the health insurance marketplace in Alabama, based on then-Gov. Robert Bentley’s November 2012 decision against a state-run marketplace. Bentley cited annual operating costs of up to $50 million as his reason for opting for a federally operated exchange, although it should be noted that the federal government does not run its exchange for free — CMS charges a fee equal to 2.75% of premiums in 2022 in states that rely on the federally-run exchange (this percentage has fluctuated over the years).
The decision against a state-run exchange came somewhat as a surprise. While the Republican governor consistently opposed many provisions of the Affordable Care Act, he repeatedly expressed support for a state health insurance exchange. Bentley supported exchanges during his campaign for governor, and as governor, he used an executive order to establish the Alabama Health Insurance Exchange Study Commission. In November 2011, that commission unanimously recommended Alabama implement a state-run exchange. However, bills to establish a state-run exchange failed to pass in both the 2011 and 2012 sessions.
Alabama has not expanded Medicaid. Former Gov. Bentley opposed Medicaid expansion, and his position became the subject of campaign ads, editorials, billboards, and websites during 2014. Late in 2014, Bentley reintroduced a discussion on Medicaid expansion. Bentley said his administration would explore options to obtain federal Medicaid funding for a state-designed solution with a work requirement for recipients. Conservative groups promptly accused Bentley of flip-flopping, but nothing had come of his Medicaid expansion talk as of 2017 when he resigned amid a scandal.
His successor, Governor Kay Ivey, has rejected Medicaid expansion efforts since taking office in 2017. As of 2022, there are still a dozen states that have not expanded Medicaid, and Alabama is one of them.
From a humanitarian standpoint, a Kaiser Family Foundation analysis estimates that there are 127,000 Alabama residents in the coverage gap as a result of the state’s refusal to accept federal funding to expand Medicaid. These people are not eligible for Medicaid due to the state’s strict eligibility requirements, but they also aren’t eligible for ACA subsidies in the exchange because their incomes are under the poverty level.
Read more about Medicaid in Alabama.
Alabama health insurance exchange links
Alabama Department of Insurance – Health Insurance Reform Information Center
State Exchange Profile: Alabama
The Henry J. Kaiser Family Foundation overview of Alabama’s progress toward creating a state health insurance exchange.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
Other types of health coverage in Alabama
Alabama has not accepted federal funding to expand Medicaid eligibility under the ACA.
More than a million Alabama residents have Medicare coverage; More than half of them have selected Medicare Advantage plans.
Find affordable individual and family plans, small-group, short-term or Medicare plans.
Learn about programs that provide financial help to Alabama Medicare enrollees – including Medicare Savings Programs and Medicaid.
Learn about adult and pediatric dental insurance options in Alabama, including stand-alone dental and coverage through Alabama's marketplace.
Learn about health insurance coverage options in your state.
Our state guides offer up-to-date information about ACA-compliant individual and family plans and marketplace enrollment; Medicaid expansion status and Medicaid eligibility; short-term health insurance regulations and short-term plan availability; and Medicare plan options.
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