Highlights and updates
- Open enrollment for 2019 coverage in Illinois ended on December 15.
- Enrollment is still open for Illinois residents with qualifying events.
- Short-term health plans are available in Illinois with initial plan terms up to 364 days.
- Get Covered Illinois: A partnership exchange with the federal government
- Gundersen/Quartz offering plans in the Rockford area for 2019
- Rate hikes mostly small for 2019, with rates decreasing in some areas
- Enrollment down about 6% since 2017
- Humana exited, 4 insurers remained for 2018
- Average 2018 rate hikes ranged from 17% to 43%
- 2018 rates reflect uncertainty at the federal level & lack of CSR funding
- BCBSIL left underutilized SHOP exchange at the end of 2017
Illinois exchange overview
Illinois operates a partnership exchange with the federal government; the state runs Get Covered Illinois, including a website, in-person assistance, and a help desk, and the federal government provides the IT platform — Healthcare.gov — that Illinois residents use to enroll in coverage or make changes to their plan. In January 2016, the Governor appointed Karen Woods, a former Blue Cross Blue Shield executive, to lead Get Covered Illinois.
Starting in August 2015, the Illinois Department of Insurance began administering Get Covered Illinois, and 15 staff positions were eliminated in the move to “streamline program processes, improve efficiency, and align services leading to increased access to health coverage for Illinoisans.”
Get Covered Illinois has minimal staff at this point, and the Trump Administration announced in mid-2017 that they would no longer fund community enrollment assistance programs in 18 cities across the country, including Chicago. The federal government also drastically reduced the advertising budget for HealthCare.gov.
All of this has left consumer advocates in Illinois scrambling to try to fill in the gaps and ensure that there’s enough outreach and enrollment assistance available to consumers — a problem that was compounded by the fact that open enrollment was much shorter for 2018 coverage, and the shorter schedule (November 1 to December 15) is slated to remain in place going forward.
Lawmakers in Illinois passed legislation that would have limited short-term health plans, but Governor Rauner vetoed it in August 2018. As a result, short-term health insurance can be purchased in Illinois with an initial term of up to 364 days. At the discretion of the insurer, plans can also be renewed for a total duration of up to 36 months.
Gundersen/Quartz joined Illinois exchange for 2019
Open enrollment for individual market coverage in Illinois ended on December 15, 2018, but Illinois residents with a qualifying event can still enroll in ACA-compliant plans.
The Illinois health insurance exchange has four insurers in 2018, but that has grown to five for 2019. Gunderson/Quartz has joined the exchange in the Rockford area, in four counties: Boone, Ogle, Stephenson, Winnebago.
The coverage areas for the other exchange insurers are unchanged from 2018’s coverage areas. HCSC offers coverage statewide, and HAMP offers coverage in eight of the 13 rating areas in Illinois. But Celtic/Ambetter only offers plans in two rating areas, and Cigna offers plans in three rating areas (both carriers limit their coverage to the Chicago area).
Premium changes are mostly small for 2019, with some decreases
In October 2018, the Illinois Department of Insurance published an analysis of on-exchange health plans for 2019, including a summary of how premiums are changing and information on which insurers are offering plans in each area of the state. The report does not address average rate changes for each insurer, but focuses instead on rate changes by metal level:
- Premiums for the lowest-priced bronze plans in the Illinois exchange are are increasing by 6 percent in 2019.
- Premiums for the lowest-priced silver plans are decreasing by 4 percent.
- Premiums for the second-lowest-priced silver plans are decreasing by 3 percent ( CMS has pegged the decrease at 2.7 percent in Illinois). Note that the second-lowest-cost silver plan in each area is the benchmark plan, and is used to calculate premium subsidy amounts.
- Premiums for the lowest-priced gold plans are decreasing by 6 percent.
Overall, the Department of Insurance noted that average rates are decreasing in several rating areas, and that average rate changes across most of the state vary between a decrease of 5 percent and an increase of 5 percent.
In June 2018, the insurers filed the following average rate increases, which were mostly approved without significant modifications:
- Celtic Insurance Co. (Ambetter): Celtic proposed an average rate increase of 1.11 percent for plans without adult dental/vision coverage, and 0.27 percent for plans with adult dental/vision coverage. But the approved rate changes represent an average decrease of 3.77 percent and 4.39 percent, respectively.
- Health Alliance Medical Plans, Inc. (HAMP): 4.7 percent average increase. HAMP has 35,032 members in 2018
- Health Care Service Corporation, (HCSC, Blue Cross Blue Shield of Illinois): 0.9 percent average increase. HCSC offers a PPO throughout Illinois, and is the only insurer to do so.
- Cigna: 7 percent average increase
Illinois Department of Insurance Director Jennifer Hammer has noted that the market in Illinois is stabilizing, both in terms of the rate changes and the fact that the number of insurers in the exchange is growing from four to five. But at ACA Signups, Charles Gaba estimates that average premiums in Illinois would have dropped by about 13 percent if the individual mandate penalty wasn’t being eliminated, and if the Trump Administration hadn’t taken action to expand access to short-term plans and association health plans (both serve to siphon healthy people out of the ACA-compliant risk pool, leading to higher premiums for the people who remain).
Lawmakers in Illinois tried to limit short-term plans in 2018 in an effort to stabilize the individual market, but Gov. Rauner vetoed their legislation, paving the way for the Trump Administration’s relaxed rules for short-term plans to take effect in October 2018. As of early November, the Illinois Department of Insurance had approved “quite a few” short-term and association health plans for sale in the state.
Illinois insurers will are continuing to add the cost of cost-sharing reductions (CSR) to on-exchange silver plans for 2019, just as they did for 2018. This is confirmed in HAMP’s rate filing, which notes that the process for handling the cost of CSR was prescribed by Illinois insurance regulators. If the same plan is sold both on- and off-exchange, it will have the same price both places. But if a plan is only sold outside the exchange, it doesn’t have to include the cost of CSR in its premiums.
The average benchmark plan (second-lowest-cost silver plan) in Illinois is increasing in price by 4.1 percent in 2019. Premium subsidies are based on the cost of the benchmark plan, so subsidies will grow slighly in 2019, assuming enrollees’ incomes remain unchanged. But it’s important for everyone with individual market coverage to shop carefully during open enrollment, as the plan that offered the best value in 2018 might not be the best choice for 2019.
334,979 people enrolled in plans through the Illinois exchange during open enrollment for 2018 coverage. That was a 6 percent decline from the 356,403 who enrolled the year before. There were some states that ended up with increased enrollment for 2018, but they were the exception rather than the rule, and most of them had state-run exchanges (either fully state-run, or state-run exchanges utilizing HealthCare.gov). Across states with federally-run exchanges, including Illinois, average enrollment declined by more than 5 percent from 2017 to 2018.
The decrease in enrollment can be attributed to several factors:
- Open enrollment was significantly shorter for 2018 coverage, lasting just over six weeks, instead of three months.
- The Tump Administration made substantial cuts to HealthCare.gov’s marketing and enrollment outreach budgets in the weeks leading up to open enrollment, resulting in fewer resources available to educate consumers about health insurance options and help them enroll.
- And the ongoing debates about health care reform in 2017 resulted in significant consumer confusion regarding whether the individual mandate was still in place for 2018. In December 2017, after open enrollment for 2018 coverage had ended, the GOP tax bill was enacted, and it does include repeal of the individual mandate penalty. But that provision won’t take effect until 2019; people who are uninsured in 2018 will still face a penalty, which will be assessed on their tax returns in early 2019.
As of early 2018, effectuated enrollment in the Illinois exchange stood at 304,712 people. Of those enrollees, 86 percent were receiving premium subsidies that covered nearly 83 percent of their total premiums. And 45 percent of the enrollees were receiving cost-sharing reductions (CSR). CSR benefits continue to be available to eligible enrollees, despite the fact that the Trump Administration cut off funding for CSR in the fall of 2017. The insurers have simply added the cost of CSR to premiums (typically to silver plan premiums, as is the case in Illinois), resulting in larger premium subsidies.
Humana left at the end of 2017, members had until March 1, 2018 to pick a new plan
Humana, one of the five insurers that offered plans in the Illinois exchange in 2017, exited the individual health insurance market nationwide at the end of 2017. Illinois has 13 rating areas, and Humana offered coverage in 2017 in northern Illinois, in three full areas (5, 7, and 8) and in part of rating area 10. Rating areas 7, 8, and 10 still had plans available from HAMP and HCSC in 2018. But rating area 5 (the Rockford area) only had plans available from HCSC (Blue Cross Blue Shield of Illinois) after Humana left (a list of which Illinois counties are in each rating area is available here). For 2019, however, Quartz is offering plans in four counties in rating area 5, allowing Rockford residents a choice between Quartz and HCSC.
People who had coverage with Humana in 2017 were automatically enrolled in replacement plans by the exchange if they didn’t pick their own new plan by December 15, 2017. But those individuals also had a special enrollment period, through March 1, 2018, during which they could pick their own replacement plan.
Ambetter/Celtic offers exchange plans in rating area 1 and part of rating area 3. Cigna offers coverage in rating areas 1 and 3, and in part of area 4. According to CMS data, the vast majority of Illinois has two insurers offering coverage in the exchange for 2018, although there are a few counties where just one insurer offers plans, and a few counties have three insurers.
Throughout 2017, when insurers were deciding on a strategy for 2018, there was considerable in terms of the future of the ACA and the stability of the individual health insurance market. The Trump Administration cut off funding for cost-sharing reductions (CSR) in October (but insurers are legally obligated to provide lower cost-sharing for low-income enrollees, and have added the cost of CSR to silver plan premiums for 2018). And throughout the year, including during open enrollment for 2018 coverage, the Trump Administration did not indicate how strongly they would enforce the ACA’s individual mandate penalty. Ultimately, Republican lawmakers repealed the individual mandate penalty altogether in late December (after open enrollment had ended), but that repeal won’t take effect until 2019. This was a departure from previous legislative efforts to repeal the individual mandate, all of which would have been retroactively effective.
Not surprisingly, these two issues — CSR and enforcement of the individual mandate — were the top two concerns for insurers as they decided whether to remain in the exchanges and/or individual market in 2018. HCSC (Blue Cross Blue Shield of Illinois) said earlier in the year that they would likely file rates and plans for 2018 (which they did), but would wait until the summer to decide whether they’ll actually remain in the exchange, indicating that the decision would hinge on the Administration’s actions regarding market stabilization. Ultimately, Humana was the only insurer that opted to pull out of the exchange in Illinois. The remaining insurers all continued to offer coverage for 2018.
Approved rate increases for 2018: Insurers accounted for federal uncertainty in their rates
The four insurers offering exchange coverage in Illinois in 2018 have implemented the following average rate increases, which were approved by state regulators:
- Celtic Insurance Co. (Ambetter):
15.3 percent, revised in August 2017 to 43.1 percent, based on uncertainty regarding CSR funding (the funding was later eliminated altogether by the Trump Administration). The cost of CSR was added to silver plan rates, both on and off-exchange. Rate change applied to 36,030 members.
- Health Alliance Medical Plans, Inc. (HAMP):
45.7 percent, revised slightly downward to 41.1 percent (rate includes a factor to account for the “potential elimination” of the individual mandate and cost-sharing reduction funding). The cost of CSR was added to on-exchange silver plan rates. Rate change applied to 34,171 members.
- Health Care Service Corporation, (HCSC, Blue Cross Blue Shield of Illinois):
17.9 percent, revised slightly downward to 16.6 percent in early September (included a rating factor to account for “loosening of the individual mandate enforcement,” and “uncertainty regarding the continuation of CSR funding”) Rate change applied to 296,621 members, by far the largest market share of any of the Illinois insurers.
35.3 percent, revised downward to 27 percent (rate change was based on the—correct—assumption that CSR would not be funded). Rate change applied to 26,993 members.
The Illinois Department of Insurance advised insurers to add an additional premium load to silver plans for 2018 to account for the possibility that cost-sharing reductions might not be funded, but they did not allow insurers to file two sets of rates simultaneously (one assuming cost-sharing reductions would continue to be funded, and one assuming they wouldn’t), as some other states did. They did allow insurers to file revised rates if necessary, and CMS gave HealthCare.gov insurers an extension on revising rates (as late as September 5) and committing to exchange participation (as late as September 27). Ultimately, Celtic revised their rates sharply higher (to account for the potential CSR funding cut and the expected lack of enforcement of the individual mandate), but the other insurers had already accounted for those in their initial filings, and actually revised their proposed rates slightly downward later in the summer.
HAMP appears to be the only insurer that has similar off-exchange silver plans that don’t include the cost of CSR added to the premiums. The Illinois Department of Insurance confirmed by phone that the cost of CSR was added to all silver plans, on and off-exchange in Illinois, but a search of available plans does show off-exchange HAMP silver plans that are less expensive than the on-exchange versions. For the other insurers, however, it appears that the cost of CSR was baked into silver plan premiums for 2018, regardless of whether consumers shop on or off-exchange. For enrollees who get premium subsidies, the additional premiums are offset by larger premium subsidies. But for those who don’t get premium subsidies (ie, income above 400 percent of the poverty level, or impacted by the family glitch), a non-silver plan might have been the best choice for 2018.
The Congressional Budget Office projected that without federal funding for cost-sharing reductions, silver plan rates nationwide would have had to increase by an average of 20 percent in 2018 (not all states allowed insurers to add the increase to only silver plans, although that’s the approach that makes the most sense and shields consumers from the impact as much as possible, since unsubsidized enrollees would be able to purchase gold or bronze plans that don’t include the extra premiums, and subsidized enrollees would have larger subsidies to offset the higher rates). A Kaiser Family Foundation analysis estimated that silver plans in Illinois would have had to increase prices by 14 percent to account for the elimination of CSR funding (in addition to the regular rate increase that would be necessary even if cost-sharing reduction funding were continued). The cost of CSR has been added to the silver plans for all four of the Illinois exchange insurers, and ended up being a significant portion of the overall rate increase.
BCBS of Illinois left SHOP exchange, Health Alliance still offering SHOP plans
BCBS of Illinois has announced that they would exit the small business (SHOP) exchange at the end of 2017, but would continue to offer exchange plans for individuals; Illinois had a total of 738 small businesses enrolled in SHOP plans as of early 2017, covering 3,512 members.
Health Alliance is continuing to offer SHOP plans for small businesses, and is the only insurer in the SHOP exchange in 2018. Their plans are not available in all areas, however. You can check your zipcode on their site to see if they offer small group plans in your area.
Most small businesses enroll directly with insurers rather than SHOP, and they can still enroll directly with BCBS of Illinois in 2018.
ACA insurance gains in Illinois, but future is uncertain
As a result of the ACA, 850,000 people in Illinois gained health insurance coverage from 2010 to 2015 (this number continued to increase in 2016, but has declined somewhat since then). The coverage gains include all the avenues that the ACA created, including Medicaid expansion, which Illinois implemented.
As of March 2017, there were 655,307 people who had gained coverage in Illinois as a result of Medicaid expansion. By September 2017, enrollment in Medicaid expansion in Illinois stood at 630,655, a decrease of about 25,000 people since March, and below the level it had been in mid-2016. This indicates that Medicaid expansion enrollment likely stabilized in 2016/2017, after growing sharply in 2015 and 2015 (updated enrollment totals are posted here by Illinois Department of Healthcare and Family Services).
Under the ACA’s Medicaid expansion, the federal government pays 94 percent of the cost in 2018, 93 percent in 2019, and will pay 90 percent of the cost after that. But that’s assuming the ACA remains in place, with no changes to Medicaid expansion. Republican efforts to repeal the ACA in 2017 included provisions to eliminate the enhanced federal funding for new Medicaid expansion enrollees within the next few years, and to convert overall federal Medicaid funding to block grants or a per-capita allotment, with the end goal of sharply reducing federal Medicaid funding over the long run. Ultimately, none of those legislative efforts succeeded, and Medicaid expansion remains unchanged in 2018. Lawmakers have shifted their focus to revising Medicaid rules to allow work requirements and lifetime coverage limits instead of outright repeal of the Medicaid expansion program. The overall result would still be fewer people enrolled in Medicaid over the long run.
In addition to the coverage gains via Medicaid expansion, there were more than 253,000 people receiving subsidies to offset the cost of their private coverage in the Illinois exchange in 2017, and nearly 150,000 receiving cost-sharing subsidies (cost-sharing reductions). Both of those subsidies continue to be available in 2018. Total enrollment in the exchange dropped by about 6 percent in 2018, but it’s likely that a larger percentage of enrollees were eligible for premium subsidies, given the sharp rate increases that applied for 2018.
Young adults in Illinois would still be able to remain on their parents’ health coverage regardless of whether the ACA remains in place, as Illinois implemented a law in 2009 allowing that.
356,403 people enrolled in 2017 coverage through the Illinois exchange during open enrollment, including new enrollees and renewals. People who were new to the exchange for 2017 made up about a quarter of the total enrollments by the end of December.
For perspective, 388,179 people enrolled during the 2016 open enrollment period, so enrollment declined by a little more than 8 percent. Across all the states that use HealthCare.gov, there was an average enrollment decline of about 5 percent in 2017. This is due to a variety of factors, including higher premiums, insurers exiting the exchanges, uncertainty about the future of the ACA, and the Trump Administration’s decision to pull advertising for HealthCare.gov in the final week of open enrollment.
Average full-price (pre-subsidy) premiums in the Illinois exchange are $517/month in 2017. But 79 percent of enrollees are receiving premium subsidies, which bring their average after-subsidy premiums down to $230/month. Although rates increased sharply in the Illinois exchange in 2017, premium subsidies offset much of the rate increase for the majority of the exchange’s enrollees.
The average Illinois subsidy amount in 2017 is $287/month, which is 24 percent higher than the average $231/month subsidy in Illinois in 2016 (larger subsidies are necessary when premiums climb, in order to keep the after-subsidy premium at an affordable level). HHS estimated in 2016 that there were 130,000 people in Illinois with off-exchange coverage who would be eligible for subsidies if they switched to the exchange. If they made that switch during open enrollment, they’re now receiving subsidies. If they remained outside the exchange, however, they bore the full brunt of the higher premiums for 2017.
Rates and participating carriers for 2017
The Illinois exchange has five carriers offering plans for 2017, down from nine in 2016. Harken, Aetna, Coventry, and UnitedHealthcare exited at the end of 2016, and Land of Lincoln Health was placed in liquidation at the end of September, with coverage ending September 30 (details on the departures are below). But Cigna has joined the exchange in the Chicago area for 2017.
Most counties in Illinois have two carriers offering plans for 2017, although much of central Illinois has three carriers, and a few counties have just one.
Health Care Service Corporation (Blue Cross Blue Shield of Illinois) is the only insurer offering PPOs in the exchange, and they’re available statewide. The rest of the insurers offer HMO or POS plans (details on page 18 of this Illinois Department of Insurance summary).
The participating exchange carriers proposed the following rate increases for 2017:
- Celtic Insurance Co. (Ambetter): 45 percent to 59 percent, depending on whether the plan includes dental and vision (up from the average rate increases of 18.6 percent or 22.3 percent that Celtic originally filed)
- Health Alliance Medical Plans, Inc. (HAMP): 16 percent to 52 percent, depending on plan (original rate filings had an average rate increase of 28.37 percent, later revised to 37.3 percent)
- Health Care Service Corporation, (HCSC, Blue Cross Blue Shield of Illinois): 51.3 percent (BCBS had more than three-quarters of the individual market share in Illinois in 2016, and are the only insurer to offer plans state-wide in the exchange in 2017; their 2017 rate filing included an assumption that cost-sharing subsidies would be eliminated under the House v. Burwell case, which has not yet happened. The ruling in favor of House Republicans (ie, that cost-sharing subsidies have been illegally funded) was appealed by the Obama Administration, and both sides agreed to a stay in the case until May 22, while they sort out what happens next. The Trump Administration has indicated that they will pay insurers for cost-sharing subsidies in May 2017, but ongoing funding has not yet been appropriated)
- Humana Health Plan, Inc.: 46.3 percent (exiting at the end of 2017).
- Cigna: new to exchange for 2017
The Illinois Department of Insurance published details in mid-September showing the average approved rate increase based on metal levels, rather than specific to each carrier. The average rate increases across the state for the following segments of various metal levels are:
- Lowest-cost Bronze plan = 44 percent
- Lowest-cost Silver plan = 45 percent
- Second-lowest-cost Silver plan (ie, the benchmark plan) = 43 percent
- Lowest-cost Gold plan = 55 percent
While this analysis didn’t indicate how much a specific plan’s premium would change (in many cases, a different carrier is offering the plan that falls into one of those categories for 2017), it did present a reasonable picture of the overall rate changes for 2017, and it also indicated that subsidies would rise sharply in Illinois in 2017, since the subsidy increase will be based on the increase in the cost of the second-lowest-cost Silver plan in each area.
In October, HHS confirmed that the average second-lowest-cost benchmark plan in Illinois would increase in price by 43 percent in 2017 (before any subsidies are applied). That’s nearly double the 22 percent average increase across all the states that use HealthCare.gov. But in terms of actual dollar amounts, the average second-lowest-cost silver plan in Illinois (for a 27-year-old enrollee, before subsidies) is $298/month in 2017 — very much on par with the $296/month average across all HealthCare.gov states.
Cigna joins exchange in Chicago area with competitive rates for 2017
The Illinois Department of Insurance confirmed in mid-September that Cigna would offer on-exchange plans in the exchange, in the Chicago area. A quick check of a few zip codes using HealthCare.gov’s browsing tool indicates that Cigna is offering some of the least-expensive plans in the Chicago area for 2017 (the two network options they offer are also narrower than other carriers’ networks)
Cigna was also planning to expand their exchange offerings in a few other cities around the country for 2017, in contrast with several other big-name insurers (Aetna, Humana, and UnitedHealthcare) that are reducing their participation in the exchanges.
By the end of December, Cigna had enrolled about 25,000 people in exchange plans in the Chicago area, out of 276,740 total enrollments in the Chicago area.
Land of Lincoln CO-OP closed September 30, 2016
On July 12, regulators at the Illinois Department of Insurance announced that they would be taking over Land of Lincoln Health—an ACA-created CO-OP—and establishing an orderly wind-down of the carrier’s business. Land of Lincoln plans were no longer for sale in Illinois as of July, and the CO-OP was placed in liquidation on September 29, with coverage for existing members ending on September 30, 2016. FAQs about the situation have been published on the Land of Lincoln Health site. The Illinois Life and Health Guaranty Association covered Land of Lincoln claims (beyond the insurer’s assets), but announced in 2018 that they would no longer accept any new claims for Land of Lincoln insureds or providers.
The state worked with HHS to implement a special enrollment period for Land of Lincoln’s 49,000 members so that they would be able to transition to new plans:
- A special enrollment period began August 2 and continued through September 30. CO-OP members who enrolled during this time frame had an October 1 effective date with their new carrier, and thus no gap in their coverage.
- The special enrollment period continued from October 1 through November 29 for any Land of Lincoln CO-OP members who don’t pick a new plan by September 30. The CO-OP coverage ended on September 30, and anyone enrolling on October 1 or later will have a gap in coverage, since their earliest possible effective date at that point was November 1 (regular effective dates will apply during this time frame, which means enrollments completed by the 15th of the month will have coverage effective the first of the next month).
- ACA Signups reported that as of mid-late September, only 34 percent of Land of Lincoln’s members had selected a new plan.
In Oregon and New York, when CO-OPs closed mid-year, other carriers in the state agreed to enroll the CO-OP members and credit them for the out-of-pocket costs they had incurred to that point in the year. But that did not happen in Illinois.
Blue Cross Blue Shield of Illinois — by far the largest insurer in the state’s individual market — said they would not be able to credit Land of Lincoln members for out-of-pocket costs they’ve already incurred in 2016 if the members switched to BCBSIL starting in October. The state noted that it did not have the power to force carriers to give transitioning CO-OP members credit for their out-of-pocket costs for the first three quarters of 2016, and no other carriers said they would do so. The result is that CO-OP members who had already incurred charges in 2016 had to start over again on their out-of-pocket exposure for the year as of October 1, under the new plan they selected. And then they had to start over again just three months later, on January 1, paying towards 2017’s out-of-pocket exposure.
In April 2017, Illinois regulators reached out to previous Land of Lincoln members, explaining that they could file claims against the liquidated assets of the CO-OP if they could demonstrate that they suffered a loss as a result of the mid-year shut-down. CO-OP members who had to start over with their deductibles and other out-of-pocket costs in October are the primary examples of people who can file a claim, although there is no guarantee that they will recoup the money they lost.
By the end of 2015, 12 of the original 23 CO-OPs created by the ACA had closed. And although Land of Lincoln Health was not among them, the CO-OP ceased individual and small group enrollments for 2016 mid-way through the open enrollment period, noting that they had already met their enrollment target for the year (Community Health Alliance in Tennessee did the same thing during the 2015 open enrollment period; ultimately they were one of the CO-OPs that shut down at the end of 2015).
Land of Lincoln Health lost $90.8 million in 2015, on the heels of a $17.7 million loss in 2014. And 44 percent of the CO-OP’s 2015 losses occurred in the fourth quarter of the year; losses had been at $50 million as of September 2015. Their losses in 2015 were the highest of all the CO-OPs that were still operational as of the start of 2016.
In 2014, Land of Lincoln Health struggled with low enrollment, with just 3,461 members at the end of 2014 (only about 4 percent of their target). But that changed dramatically in year two. For 2015, Land of Lincoln Health lowered their premiums by 20 to 30 percent, and in most areas of the state, they offered the lowest-priced silver plans.
As a result, their membership ballooned to 50,000 people by the end of the 2015 open enrollment period. Most of them – about 80 percent – had individual market plans, while the rest had small group plans that averaged about 8 to 10 employees each. By the end of 2015, the CO-OP had about 20 percent of the exchange market in Illinois, and about ten percent of the entire individual market in the state.
During the first six months of 2015, Land of Lincoln Health paid out $26 million more in claims than they collected in premiums. In October 2015, HHS announced that carriers across the country – including CO-OPs – would get only 12.6 percent of what they were owed under the risk corridors program. Land of Lincoln sued the federal government in June 2016 over the still-unpaid risk corridor money, but the case was thrown out by a federal judge in November 2016, after Land of Lincoln Health had already closed down.
Land of Lincoln lost $7.1 million in the first quarter of 2016, up from the $5.3 million they lost in the first quarter of 2015.
In June 2016, the risk adjustment payment amounts for 2015 were published, and Land of Lincoln owed $31.8 million—the second highest amount of any of the remaining CO-OPs. But the Illinois Department of Insurance acted immediately in an effort to block the CO-OP from having to make that payment to HHS. The Department of Insurance’s position was that Land of Lincoln should withhold payment for the 2015 risk corridors program until they receive the $73 million they’re owed for the 2014 risk corridors program.
The letter to CMS regarding blocking the CO-OP from paying the risk adjustment bill was “designed to prevent an immediate liquidation” of Land of Lincoln. Ultimately, that strategy failed, the state of Illinois had no choice but to shut down the CO-OP.
Harken, Aetna, Coventry, and UnitedHealthcare exited at the end of 2016
Aetna exited the Illinois exchange at the end of 2016, as was the case in 11 of the 15 states where they offered exchange plans in 2016.
Harken Health also exited the exchange in Illinois, along with the exchange in Georgia (those were the only two states where Harken offered plans, and they had only joined the exchanges for the first time in 2016). Harken only offered coverage in the Illinois exchange in the Chicago area in 2016, and their departure, announced in late September, leaves Cook County residents with three carrier options in 2017. Harken is continuing to offer plans outside the exchange in 2017.
In 2016, there were two separate Coventry entities offering plans in the the Illinois exchange: Coventry Health & Life Insurance Co. as well as Coventry Health Care of Illinois, Inc. Rate change requests had been filed separately for each of them (20 percent average for Coventry Health Care of IL, and 10.3 percent for Coventry Health & Life Insurance Company), but the Illinois Department of Insurance released details in mid-September indicating that Coventry would not offer plans in the exchange in 2017 (their brochure still included Harken, as it was released prior to Harken’s announcement).
UnitedHealthcare only offered plans in Cook County in 2015, but offered plans in the exchange in 27 Illinois counties for 2016. According to Colleen Van Ham, CEO of UnitedHealthcare’s Illinois and Northwest Indiana division, the expansion in Illinois was done because “we believe it’s something we can do at an affordable price.” However, less than two weeks later, UnitedHealthcare scaled back their marketing and broker commissions nationwide, and hinted that they might not participate in the exchanges in 2017.
United has only remained in the exchanges in three states in 2017, out of the 34 where they offered exchange plans the year before. They exited the Illinois exchange at the end of 2016. For several months after United announced their upcoming exit, they maintained that Harken Health, a new subsidiary of UnitedHealthcare — would continue to offer plans in 2017. But at the end of September, it was announced that Harken would not continue to participate in the exchange.
388,179 people enrolled in private plans for 2016 through the Illinois exchange during the third open enrollment period. That’s an increase of about 11 percent over 2015’s enrollment, despite the fact that HHS began accounting for early attrition during open enrollment this time around, instead of waiting until after open enrollment had ended to begin subtracting early cancellations and unpaid enrollments. The 388,179 enrollment total as of February 1 has already been reduced to account for all enrollments that were cancelled by that point.
By March 31, effectuated enrollment in the Illinois exchange stood at 335,243, for an attrition rate of about 13.6 percent since the end of open enrollment (similar to the national average). 77.5 percent of Illinois exchange enrollees are receiving premium subsidies. Their average subsidy is $237 per month. Nationwide, 84.7 percent of enrollees qualify for subsidies that average $291 per month.
In addition to the private plan enrollments, another 626,000 people have gained coverage under expanded Medicaid since it took effect in 2014. Illinois officials announced in late February 2016 that the total number of people covered under ACA plans (including private plans and Medicaid expansion) had exceeded one million (this does not count off-exchange enrollments, but off-exchange plans are all ACA-compliant).
The ACA has had a profound impact on the uninsured rate in Illinois. In 2013, 17.8 percent of non-elderly adults in the state were uninsured; that had fallen to 10.6 percent by 2015.
Open enrollment for 2016 ended on January 31. Coverage for 2016 is now only available – on or off-exchange – for people who experience a qualifying event (Native Americans can enroll year-round, as can anyone who’s eligible for Medicaid or CHIP).
According to the Illinois Department of Insurance, the average rate increase for the lowest-cost Silver plan in the Illinois exchange was 5.3% for 2016, and the average increase for the lowest-cost Bronze plan was 11.3%. But rate changes vary considerably from one rating area to another. The lowest cost Silver plan premium changes ranged from an 8 percent decrease to a 28 percent increase.
In the Illinois exchange, five individual plan carriers (out of ten total) proposed rate increases of ten percent or more for at least some of their plans in 2016: Blue Cross Blue Shield of Illinois, Coventry Health Care of Illinois, Health Alliance Medical Plans, Humana, and Time Insurance Company.
Time had the highest proposed rate hike (42 percent), but its parent company – Assurant – subsequently announced that they would exit the health insurance market nationwide, and they’re no longer offering plans.
Blue Cross Blue Shield of Illinois proposed average rate hikes of 29 percent for their BluePrecision HMO plans, and 38 percent for their BlueChoice Preferred plans. The carrier outlined justification for their rate proposals, noting that 2015 was the first year that accurate claims data (as opposed to educated guesses) was available for actuaries to use when calculating rates. Ultimately, the average rate increase for BCBSIL’s individual market plans was 17.89 percent, but ranged from a 17.5 percent decrease to an increase of more than 49 percent. The new rates apply to 329,427 enrollees (including off-exchange). 80 percent of Illinois exchange enrollees have BCBSIL plans.
In March 2016, Health Care Service Corp (the parent company of BCBS of Illinois and BCBS plans in four other states) announced that they had lost $1.5 billion on individual market plans in 2015, up from a $767 million loss in 2014. Health Care Service Corp also lost money overall in both years, even after accounting for group plan income and investment income. But although their individual market losses nearly doubled in 2015, their overall losses were smaller in 2015 than they had been in 2014.
State-wide, the average benchmark (second-lowest-cost Silver plan) premiums are 6.1 percent more expensive in 2016 than in 2015, which means average subsidies are higher too. But it’s noteworthy that in the Chicago area, a Kaiser Family Foundation analysis determined that the average benchmark premium is 7.9 percent less expensive in 2016 than it was in 2015. This appears to be due in large part to Celtic’s entry to the market and their relatively low premiums.
2016: two carriers exited; three joined
There are nine carriers offering a total of 290 plans for individuals in the Illinois exchange in 2016 (ten if you count Coventry as two separate carriers, which the Division of Insurance does):
Three carriers – HCSC, Land of Lincoln, and Coventry – offer plans state-wide.
Health Care Service Corp (Blue Cross Blue Shield of Illinois) covers about 80 percent of the state’s individual market enrollees.
UnitedHealthcare stopped paying broker commissions on all individual plans sold after January 1, 2016. Aetna and Blue Cross Blue Shield of Illinois both stopped paying broker commissions for individual plans sold after open enrollment had ended. This is a trend nationwide, as health insurance carriers pull back from the individual market in an effort to stem losses.
Carriers have been particularly concerned with enrollments outside of open enrollment, when consumers must have a qualifying event in order to enroll in a plan. Carriers have claimed that consumers are gaming the system, waiting until they’re sick and then enrolling under lax enforcement of special enrollment periods. HHS has vowed to tighten up special enrollment period eligibility in 2016, and consumers are now required to submit proof of a qualifying event before being allowed to enroll outside of open enrollment.
IlliniCare and Time offered plans in 2015 (both entered the exchange for the first time in 2015), but exited the market at the end of 2015 and did offer plans in 2016. But three carriers—Aetna, Celtic, and Harken—are new to the market in 2016. Celtic is the sister company of IlliniCare. Aetna offered plans in the exchange in 2014 under the name Aetna Life Insurance Company, but exited for 2015. They returned for 2016 as a separate legal entity, Aetna Health Inc (that return was short-lived, as Aetna will exit the exchange at the end of 2016).
Celtic is offering the lowest-priced plans in some areas, which is good news in terms of added competition, but bad news for people who kept their 2015 plans and are now receiving lower subsidies in areas where Celtic took over the benchmark spot with a premium lower than 2015’s benchmark rate. This is the case in Cook County, where Celtic’s low prices (and very limited network) mean that subsidies have decreased for 2016. In order to obtain a plan with coverage better than what Celtic is offering, even people who receive subsidies are having to pay more than they paid last year.
There are significantly fewer plans available in Cook County for 2016, but the Department of Insurance notes that this is primarily because “IlliniCare withdrew multiple plans that offered the same medical benefit packages with the only difference in coverage being the options to have adult dental and/or adult vision. This accounts for a reduction of 44 plans.”
The Department of Insurance confirmed that there are no platinum plans available in the individual market in 2016 in Illinois. There were 81 platinum plans available in 2015, up from 25 in 2014. But they have all been discontinued for 2016. This is a trend nationwide, as platinum plans have tended to have very low enrollment rates compared with the other metal levels.
Blue Cross Blue Shield dropped broad PPO
Blue Cross Blue Shield of Illinois insures about 80 percent of those who purchased coverage in the Illinois exchange in 2015. They had a total of about 329,000 people in ACA-compliant coverage, including off-exchange plans. BCBSIL’s average rates increased by almost 18 percent in 2016 and they announced in September 2015 that they would not offer their broad PPO (Blue PPO) network for ACA-compliant plans in 2016.
Grandmothered and grandfathered plans on the Blue PPO network were not impacted by the decision to end the broad network PPO, but there were about 173,000 people in Illinois who had ACA-compliant individual market Blue PPO plans in 2015. These insureds were auto-renewed into a Blue Choice PPO plan for 2016, unless they chose another policy instead during open enrollment. The Blue Choice PPO network is not as broad as the Blue PPO network, and some insureds were understandably upset about losing access to their healthcare provider, since the Blue PPO network was wider than most available in the individual market in Illinois.
But BCBSIL has noted that their broad network PPO was simply not sustainable at its existing price, and that the rate increase that would have been necessary to make the broad PPO actuarially justified would have driven the carrier’s prices too high to be competitive in the market. Narrower networks are a trend nationwide; markets across the country have about 40 percent fewer PPOs in 2016 than they had in 2015.
In addition to higher prices and smaller networks, some of the BCBSIL plans will have increased costs for insureds in 2016, with fewer copays and more expenses being counted towards the deductible. The carrier noted that in the individual market, they paid out $280 million more in claims in 2014 than they collect in premiums.
As of February 2015, 349,487 Illinois residents had selected qualified health plans (QHPs) through HealthCare.gov. 50 percent were new to the exchange for 2015, and 78 percent qualified for premium subsidies. That put 2015 enrollment at about 160 percent of 2014 enrollment.
But some enrollees never paid their initial premiums, and some opted to cancel their coverage early in the year. As of the end of March, 293,661 people had in-force private plan coverage through the Illinois exchange. Nationwide, effectuated enrollment continued to decline slightly in the second quarter of 2015, as Healthcare.gov and the state-run exchanges stepped up their enforcement of documentation requirements for immigration and financial status.
But in Illinois, effectuated enrollment increased from March to June, with 297,406 people covered under in-force policies at the end of June. 78 percent are receiving premium subsidies, and 47 percent are receiving cost-sharing subsidies (only available with silver plans, for enrollees with incomes up to 250 percent of the poverty level).
So more than 231,000 people in Illinois are receiving premium subsidies, which were in jeopardy during the first half of 2015 when the King v. Burwell case was still undecided. 2016 rates were filed prior to the Court’s ruling in the King case, but the Illinois Department of Insurance had announced that if the subsidies were stuck down by the Supreme Court, carriers would have had two weeks from the date of the ruling to refile new – much higher – rates for 2016.
If that had happened, unsubsidized average premiums in Illinois would have increased from $336/month in 2015 to $504/month in 2016. For Illinois exchange enrollees who receive subsidies, the result would have been much more significant: Their premiums would have quadrupled from an average current (after-subsidy) premium of $125/month to $504/month next year.
No action on state-run exchange
Illinois runs its marketplace, Get Covered Illinois, as a partnership with the federal government. State residents use the federal marketplace, HealthCare.gov, to enroll.
Former Gov. Pat Quinn consistently supported a state-run exchange. A bill authorizing a state-run exchange passed the Illinois Senate in 2013, and there was hope the House might give its support during the 2014 fall veto session. However, sponsors did not have enough support to bring the bill to a vote.
Rep. Robyn Gabel had hoped the issue would gain traction in 2015, given that the U.S. Supreme Court was considering whether premium subsidies could be lawfully provided in states that don’t run their own health insurance exchange. By transitioning to a state-run exchange, Illinois would have secured ongoing subsidies for its residents regardless of how the Court ruled (ultimately, the Court deemed subsidies to be legal in every state, regardless of whether the federal government is running the exchange or not).
At this point, a state-run exchange is unlikely for the foreseeable future. The federal government is no longer providing new establishment grants, and Illinois would be challenged to fund startup costs on its own.
2015 rates up slightly on Get Covered Illinois
The Illinois Depart of Insurance summarized 2015 premium increases by metal level:
- Lowest gold plan average: 3.7 percent increase
- Lowest silver plan average: 2.6% increase
- Lowest bronze plan average: 11% increase
More than half of 2014 enrollees in Illinois selected a silver plan.
A recap of 2014 enrollment
About 217,500 Illinois residents enrolled in qualified health plans (QHPs) during 2014 open enrollment and 468,000 have signed up for Medicaid as of Sept. 30. Get Covered Illinois announced that the state exceeded the initial enrollment target set by the federal government by 52 percent.
Of those Illinois residents who selected a QHP, 77 percent qualified for financial assistance, compared to 85 percent nationally. An HHS report showed the average monthly premium, after tax credits, for Illinois consumers was $105. Twenty-five percent of enrollees pay $50 or less per month after subsidies.
Twenty-nine percent of Illinois residents selected a bronze plan (20 percent nationally), 56 percent selected a silver plan (65 percent nationally), 15 percent selected a gold plan (9 percent nationally), 1 percent selected a platinum plan (5 percent nationally) and 0 percent selected a catastrophic plan (2 percent nationally). Thirty-one percent of Illinois enrollees were between the ages of 18 and 34.
History of the Illinois exchange
Former Gov. Pat Quinn’s administration announced in July 2012 that the Illinois marketplace would operate as a state-federal partnership. Quinn had hoped to leverage the partnership model as an interim step toward a state-run marketplace for the 2015 coverage year. However, a state exchange bill passed in the Senate in 2013 didn’t get a vote in the House. As noted above, there was some hope that exchange legislation will be considered during the fall 2014 session. However, the House did not take up the issue, and Illinois continues to have a partnership exchange (as noted above, the state’s portion of the partnership was folded into the Department of Insurance in August 2015).
About 12 percent of state’s population remained uninsured after the first open enrollment period. In response, officials awarded nearly $26 million to 37 organizations to target groups that were hard to reach in 2014: Latinos, African Americans, and Millennials. The efforts paid off, and Illinois’ uninsured rate dropped again from 2014 to 2015.
The uninsured rate in Illinois dropped from 15.5 percent in 2013 to 8.8 percent in the first half of 2015, according to a Gallup survey. Medicaid expansion has no doubt played a significant role in the reduction in the uninsured rate, as total Medicaid/CHIP enrollment grew by half a million people from the fall of 2013 to June 2015 – a 19 percent increase.
Get Covered Illinois hired Onion Labs to build a campaign to reach Millennials. The campaign featured the fictional Luck Health Plan and the tagline: “You’ll be okay. Probably.”
In January 2015, Get Covered Illinois launched an ad targeting same-sex married couples. While the uninsured rate for low- and middle-income LGBT people dropped from 34 percent to 26 percent from 2013 to 2014, it is still much higher than the overall national average.
Illinois health insurance exchange resources
Get Covered Illinois
Illinois Health Matters
Information resource on health care reform
Health Care Assistance
Office of the Attorney General
877-305-5145 (toll-free nationwide) TTY: 312-964-3013
Serves residents enrolled in private health insurance
Office Consumer Health Insurance and the Ombudsman for the Uninsured
Illinois Department of Insurance
877-527-9431 (toll-free nationwide)
Serves residents who are uninsured as well as residents who have health insurance problems or questions.
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.