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A TRUSTED INDEPENDENT HEALTH INSURANCE GUIDE SINCE 1994.
North Carolina uses the federally run health insurance exchange – HealthCare.gov.
For 2023, CareSource joined the North Carolina exchange (on the heels of four new insurers that joined in 2022), but Bright Health exited the market at the end of 2022. So the number of participating insurers remained unchanged at ten.
Enrollment climbed to a new record high in 2022, with more than 800,000 people signing up for private individual market plans through the North Carolina exchange during open enrollment. The previous record high came the year before, when about 670,000 people enrolled.
The American Rescue Plan’s subsidy enhancements have been extended through 2025 by the Inflation Reduction Act, so coverage continues to be more affordable in 2023 than it was prior to 2021.
North Carolina uses the federally run exchange (HealthCare.gov). And after a decade of resistance from state lawmakers, North Carolina’s legislature passed a bill in 2023 that calls for the state to implement the ACA’s expansion of Medicaid.
While the federal government is running the marketplace in North Carolina via Healthcare.gov, the state department of insurance reviews the rates proposed by insurers who want to sell policies in North Carolina through the federal exchange (state regulators review rates in nearly every state). Much to the dismay of North Carolina’s former Insurance Commissioner, Wayne Goodwin, this is the only involvement that the state has with the exchange.
North Carolina’s path toward ACA implementation was a complicated one that covered all bases. The state took official actions toward each one of the options for a health insurance marketplace: state-run, partnership, and federally operated. In June 2011, North Carolina passed a law stating an “intention” to develop a state-run health insurance exchange.
The House at one point authorized a state-run exchange, but the Senate did not. Outgoing Gov. Bev Perdue announced in November 2012 that the state would partner with the federal government to run the marketplace. Finally, new Gov. Pat McCrory announced in February 2013 that North Carolina would default to the federal marketplace.
For 2023 coverage, the following insurers offer plans in the marketplace in North Carolina, with localized coverage areas:
There has been a trend toward increased insurer participation in North Carolina’s exchange over the last few years. CareSource is new for 2023, and North Carolina’s exchange also gained four new insurers in 2022 (Aetna CVS Health, Friday Health Plans, AmeriHealth Caritas, and Celtic/WellCare).
In 2014, plans were only available through two carriers in North Carolina’s exchange: Blue Cross Blue Shield of North Carolina and Coventry Health Care of the Carolinas (Aetna). But nearly two-thirds of the state’s 100 counties had only Blue Cross Blue Shield as an option, because Coventry only offered plans in 39 counties.
United Healthcare joined the individual health insurance exchange in North Carolina in 2015 (United already had a strong market share in North Carolina, outside the exchange), and the three insurers continued to offer plans in the exchange in 2016 as well. BCBSNC plans were available statewide, United’s plans were available in 77 counties, and Aetna’s plans were available in 39 counties (Humana had planned to join the exchange in four counties in the Charlotte and Winston-Salem area, but ended up withdrawing their application in 2015)
UnitedHealthcare exited the individual market entirely in North Carolina at the end of 2016, as was the case in the majority of the states where United offered exchange plans in 2016. Aetna also exited the exchange in North Carolina, along with most of the other states where they were participating in the exchanges.
North Carolina Insurance Commissioner, Wayne Goodwin, expressed his dismay at Aetna’s announcement, saying “I am shocked and disappointed that Aetna and its executives have chosen to abandon their Exchange members. We at NCDOI were in the middle of reviewing Aetna’s rate requests for 2017. Never during the review did the company indicate any concern that the requested rates would not solve. I am angered by the impact Aetna’s decision will have on Tar Heel families and our market.”
But Cigna joined the North Carolina exchange as of 2017, offering exchange plans in five counties in the Raleigh/Durham area. For 2019, Ambetter/Centene joined the North Carolina exchange in Durham and Wake counties. And for 2020, Bright Health joined the exchange in the Charlotte and Winston-Salem areas.
For 2021, UnitedHealthcare rejoined North Carolina’s exchange, and Oscar also joined the exchange, offering plans in the Asheville area.
For 2022, Friday Health Plans, AmeriHealth Caritas, Aetna/CVS, and Celtic/WellCare joined the exchange. UnitedHealthcare of North Carolina was also listed as a new insurer for 2022, but that’s because they transitioned from one UHC license to another. UHC of NC exited the state’s market at the end of 2016, triggering a five-year ban from the market (under long-standing HIPAA rules). UnitedHealthcare rejoined North Carolina’s market for 2021, but had to use the UnitedHealthcare of Wisconsin license due to the five-year ban. That five-year window ended at the end of 2021, so UHC of NC rejoined the market for 2022. So while it appeared that there were five new insurers in the state’s marketplace for 2022, it was really four from a consumer perspective.
For 2023, CareSource joined North Carolina’s exchange, bringing total insurer participation to eleven.
The open enrollment period for individual/family health coverage runs from November 1 to January 15 in North Carolina.
Outside of that window, you’ll need a special enrollment period in order to enroll or make a change to your coverage. Most special enrollment periods are triggered by a qualifying life event, although some special enrollment periods (such as the enrollment opportunity for Native Americans, or for people earning under 150% of the poverty level) are not tied to a specific qualifying event.
If you have questions about opportunities to enroll in health coverage, you can read more in our comprehensive guide to open enrollment and guide to special enrollment periods.
There are ten insurers offering plans in North Carolina’s marketplace for 2023. The nine insurers that offered plans in the marketplace in 2022 implemented the following average rate changes for 2023:
According to ACA Signups, the overall average proposed rate change amounted to an increase of just under 7%, but some insurers’ rates were revised during the review process, and Bright Health, which had a fairly large market share, exited the market at the end of 2022. So the overall final rate change was a bit different from what insurers had initially proposed.
(The North Carolina Department of Insurance clarified in the fall of 2022 that they wouldn’t publicize final rates until the Department made them uniformly available in October 2022, just prior to the start of open enrollment for 2023 coverage.)
ACA-compliant plans debuted in 2014, and premiums were essentially insurers’ educated guesses, since they had no claims experience with these plans. In subsequent years, the following average rate changes were implemented in North Carolina’s individual market:
800,850 people enrolled in private individual market plans through North Carolina’s exchange during the open enrollment period for 2023 coverage This was by far a record high, dwarfing the prior year’s record high when a little more than 670,000 people had enrolled.
Among the states that use HealthCare.gov, only Florida, Georgia, and Texas have higher enrollment than North Carolina (California, which has a state-run exchange, is the only other state with higher enrollment).
Here’s a summary of total enrollment in individual market plans through North Carolina’s exchange during open enrollment each year:
Across all the states that use HealthCare.gov, enrollment generally declined under the Trump administration but has rebounded in 2021 and 2022. The record-high enrollment for 2022 can be attributed to enhanced premium subsidies under the American Rescue Plan, a longer open enrollment period, and increased federal funding for enrollment assistance and outreach.
North Carolina lawmakers passed S.B.86 by a wide margin in 2019, and although Governor Roy Cooper did not sign it, the bill became law without his signature. (Cooper considered a veto, and Lt. Gov. Dan Forest urged him to do so, but he opted to let the bill become law without his signature).
The NC legislation essentially mirrors the federal guidelines for association health plans (AHPs) that the Trump administration finalized in 2018, allowing small businesses to join together and obtain large-group health insurance based on either a common industry (eg., numerous small bakeries joining together) or a common geographical area (eg., a group of unrelated small businesses that are all based in the same state). The legislation also calls for allowing sole proprietors to join AHPs, as is the case under the federal guidelines.
In March 2019, a federal judge blocked some provisions of the federal AHP rules, calling the regulations an “end-run around the ACA.” Specifically, the judge overturned the provisions that allow sole proprietors to join AHPs, as well as the provision that allowed unrelated small businesses that share only a geographical location (and not a commonality of interest) to join AHPs. The Trump administration appealed the decision in April 2019; oral arguments were heard by the U.S. Court of Appeals, DC Circuit, in November 2019, but a ruling had not yet been issued as of February 2021, when the Biden administration asked the court to stay the appeal, and the court agreed. The case was still pending as of 2022.
S.B.86 also notes that if those provisions in the federal AHP regulations are struck down by the appeals court, North Carolina would “conduct a study on the feasibility of submitting a 1332 waiver request” to CMS in order to seek approval for allowing sole proprietors and unrelated small businesses (that share only a geographical location) to join AHPs. As of late 2022, however, North Carolina has not submitted any 1332 waiver proposals to CMS (a complete list of states that have is available here)
If sole proprietors and small businesses are ultimately allowed to join together to obtain AHP health coverage that follows large group rules (instead of individual market and small group rules), the health plans issued under those rules are expected to be less expensive, since they could be less generous. There’s no requirement, for example, that large group plans cover essential health benefits. Most current large employers do cover EHBs, but an AHP would have less incentive to do so (compared with large employers, for whom robust employee benefits are a key part of compensation, recruitment, and retention).
The Trump Administration waffled throughout 2017 in terms of whether they’d continue to fund cost-sharing reduction (CSR) payments to insurers, and Congress failed to take action to appropriate funding. Under the ACA, insurers are required to provide more robust coverage to eligible low-income enrollees, and the federal government is supposed to reimburse insurers for the cost. House Republicans sued the Obama Administration in 2014 over the legality of the federal payments to insurers (which weren’t specifically appropriated by Congress), and a judge sided with House Republicans in 2016. The Obama Administration appealed, however, and cost-sharing reduction payments continued to flow to insurers for more than a year.
But President Trump repeatedly threatened to cut off funding for cost-sharing reductions, and in mid-October 2017, he announced that CSR funding would end immediately. By that point, rates were already finalized for 2018, and both North Carolina insurers had already based their premiums on the assumption that federal funding for CSR would not continue in 2018 — a prescient decision, in hindsight.
Blue Cross Blue Shield of North Carolina filed 2018 rates in May 2017, and the filing painted a clear picture of the importance of the CSR issue: Blue Cross Blue Shield of NC proposed a 22.9% rate increase, but they noted that 14 percentage points of that rate increase were based on an assumption that cost-sharing reductions (CSRs) wouldn’t be funded in 2018. They said they would re-file lower rates if the federal government were to provide “firm commitment to fully fund CSR payments in 2018 in a timely manner.” Had that commitment been forthcoming — which it wasn’t — the new rate filing would presumably have been in the range of 8.9%.
But Blue Cross Blue Shield of North Carolina filed new rates in early August, noting that “the individual market in North Carolina has become less volatile…we got information in June and July that made us confident we could reduce our requested rate increase for 2018” The new rate filing was for an average increase of 14.1%. That rate filing was ultimately approved by regulators, and BCBSNC clarified in October that if CSR funding had continued, the average rate increase for 2018 would have been “near zero.”
Cigna also filed rate proposals for 2018, but they had — and continue to have — a much smaller membership in North Carolina, due to their limited coverage area. Their initial rate filing was for an average increase of 32%, but a subsequent filing, dated in late July, proposed a rate increase of 24.61%. In both cases, the cost of CSR had been added to premiums, as Cigna had based their rate proposal on the assumption that CSR funding would not continue.
So for 2018 coverage, the average approved rate increases for North Carolina were:
As always, it’s important to note that these premium increases refer to full-price premiums. For people who receive premium subsidies (which included 93% of the people who were enrolled through North Carolina’s exchange in 2017), the subsidies grow in order to keep after-subsidy premiums affordable. In 2017, the average BCBSNC premium was $655/month, but for subsidized enrollees, the average after-subsidy premium was just $155/month. People who are eligible for premium subsidies began receiving larger subsidies in 2018 to offset all or most of the rate increase due to CSR defunding, although some enrollees may have had to switch plans in order to get the most value from their premium subsidies. But people who pay full-price for their coverage, which included 7% of exchange enrollees in 2017, as well as anyone who has off-exchange coverage in North Carolina, felt the full impact of the premium increases as of January 2018.
The addition of the cost of CSR to Silver plan rates has ended up being beneficial for most consumers, as it results in larger premium subsidies (since subsidies are based on the price of the second-lowest-cost Silver plan).
Blue Cross Blue Shield of North Carolina announced in August 2017 that they would terminate their remaining grandfathered plans at the end of 2017. The insurer noted that while they initially had 330,000 grandfathered plan members in 2010, enrollment had dropped to 50,000 in 2017. And since nobody was able to join the insurance pool for those plans since the ACA was enacted in 2010, the risk pool got older and sicker — and thus more expensive — over the ensuing seven years.
Members with BCBSNC grandfathered plans were able to select from all of the available ACA-compliant plans in their area during open enrollment, including on and off-exchange plans. And while open enrollment ended on December 15, there was a special enrollment period (SEP) that continued through March 1, 2018 for anyone whose plan was terminated on December 31, 2017. The special enrollment period allowed former BCBSNC grandfathered plan members to enroll in a replacement plan on or off-exchange.
Blue Cross Blue Shield of North Carolina covers the majority of the state’s exchange enrollees, and they were the only exchange carrier that offered plans state-wide in 2016. In early 2016, they were considering the possibility of pulling out of the exchange in 2017. By May 2016, they had tentatively confirmed that they would continue to offer plans in the exchange in 2017, despite the losses they had incurred by that point. They had until September 24 to make a final decision; on September 22, they reiterated their commitment to remaining in the exchange in every county in North Carolina in 2017.
Their initial rate filings for 2017 included 24 plans, and an average rate increase of 18.8% But in late August, BCBSNC filed new rates, with an average rate increase of 24.3%. The carrier noted that exchange enrollees (not just in NC, but nationwide) have been sicker than expected, and using more health care services than other insured populations. So the new rate filing in late August was in response to the announced departure of Aetna from North Carolina’s marketplace and the expected influx of new (potentially high-cost) enrollees for BCBSNC.
For perspective, the state approved an average rate increase of 32.5% for BCBSNC plans heading into 2016, so the requested rate increase for 2017 (which was approved) was not as steep as it was a year earlier.
In 2014, BCBSNC lost $123 million on their exchange business, and that figure spiked to $282 million in 2015. The carrier filed a lawsuit against the federal government in June 2016, alleging that the government failed to live up to its obligations under the ACA’s risk corridor program.
Several other carriers had already filed similar lawsuits; carriers found out in the fall of 2015 that their payouts would be less than 13% of the total amount they were owed under the program. And in September 2016, HHS announced that risk corridor revenues from 2015 would all have to be allocated towards the 2014 shortfall, and that there would be no funding left to cover any of the money that carriers are owed under the program for 2015. The risk corridor debacle eventually made its way to the Supreme Court, and in 2020, the Court ruled in favor of the insurers, stating that the federal government is obligated to pay insurers the risk corridor money that was owed to them.
Although BCBSNC lost $405 million on ACA-compliant plans in 2014-2015, growth in investment income and Medicare Advantage during 2015 offset the losses in the exchange market, giving BCBSNC net earnings of $500,000 in 2015, as opposed to a $51 million loss in 2014 (Wendell Potter recently detailed how carriers can be losing money in the exchanges but still doing well overall). And BCBSNC’s ACA-compliant market losses were much smaller ($38 million) in 2016.
State Exchange Profile: North Carolina
The Henry J. Kaiser Family Foundation overview of North Carolina’s progress toward creating a state health insurance exchange.
North Carolina Institute of Medicine (NCIOM)
Health Insurance Smart NC
Assists people insured by private health plans, Medicaid, or other plans in resolving problems pertaining to their health coverage; assists uninsured residents with access to care.
Toll free: 1-877-885-0231
Managed Care Patient Assistance Program
Serves consumers who are members of managed health benefit plans.
(919) 733-6272 / Toll-Free: 1-866-867-6272 (in North Carolina only)
Community Care of North Carolina
Legal Aid of North Carolina (855-733-3711)
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.
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