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Indiana health insurance marketplace: history and news of the state’s exchange

CareSource expanding coverage area again, both insurers will offer plans statewide in 2020. But proposed rate increases are larger than average and Indiana is continuing to broad load CSR

Recent Indiana exchange news

Indiana exchange overview

State legislative efforts to preserve or strengthen provisions of the Affordable Care Act

Indiana is among the states that have done the least to preserve the Affordable Care Act’s gains.

Indiana relies on the federally-facilitated exchange, so residents enroll through Healthcare.gov. Four carriers offered plans in the Indiana exchange for 2017, but Anthem and MDwise left at the end of the year. Celtic/Ambetter and CareSource remained in the exchange and will both continue to offer plans statewide for 2020.

Open enrollment for 2020 coverage will run from November 1, 2019 to December 15, 2019. All plans selected during open enrollment take effect on January 1, and there’s no longer an opportunity to switch plans after the start of the year, unless you have a qualifying event.

148,404 people enrolled in private individual market plans through the Indiana exchange during the open enrollment period for 2019 coverage. That’s down about 32 percent from the exchange’s peak enrollment in 2015, when more than 218,000 people enrolled.

But that decline has to be considered in conjunction with the fact that Medicaid expansion in Indiana didn’t take effect until 2015 (February 2015 was the earliest available effective date), so people who have since enrolled in Medicaid were instead enrolled in heavily subsidized QHPs through the exchange in early 2015, and subsequently transitioned to Medicaid. Medicaid enrollment is about 30 percent higher in Indiana than it was at the end of 2013.

In addition, premiums have increased significantly for people who don’t get premium subsidies, and the Trump administration has slashed funding for exchange outreach and marketing, and has expanded access to short-term health plans (as an alternative to ACA-compliant coverage for healthy enrollees). And GOP lawmakers eliminated the ACA’s individual mandate penalty as of 2019, making it possible for more people to go without coverage (or opt for short-term health plans) without facing a financial penalty for doing so.

And although Indiana used to limit short-term health plans to six months, the state enacted new legislation in 2019 to allow short-term plans to have initial terms of up to 364 days, and to be renewable (if an insurer chooses to offer that option) for a total duration of up to three years.

2020 rates and plans: Another year of broad loading, and fairly significant proposed rate increases

Two insurers offer plans in Indiana’s exchange in 2019, and both will continue to do so in 2020, with plans available statewide from both insurers (Celtic already offers plans statewide in 2019, but CareSource will expand from 79 counties to 92 counties as of 2020).

In July 2019, the Indiana Department of Insurance published proposed average rate changes for CareSource and Celtic. In early August, rate filings became available on the federal rate review site, with a slightly different average proposed rate increase for CareSource (3.5 percent average increase according to the Indiana DOI summary, versus a 4.88 percent average increase according to the federal rate review site).

Insurers in Indiana have proposed the following average rate changes for 2020:

  • CareSource (83,242 members): 3.5 percent average increase (note that the federal rate review site shows an average proposed increase of 4.88 percent).
  • Celtic (MHS/Ambetter): 14.3 percent average increase

Anthem, which only offers an off-exchange catastrophic plan in Benton, Jasper, Newton, Warren, and White counties, has proposed an average rate increase of about 3 percent for 2020. But the filing notes that they only have 28 enrollees, so they’re essentially a non-entity in Indiana’s ACA-compliant individual market.

CareSource’s filing memo clarifies that the Indiana Department of Insurance is still instructing insurers to add the cost of cost-sharing reductions (CSR) to premiums of plans at all metal levels (ie, a broad load) instead of adding it only to premiums of silver-level plans.

For 2018, Indiana was one of only five states where the cost of cost-sharing reductions (CSR) was added to premiums at all metal levels, as opposed to just silver plans (Colorado, West Virginia, Deleware, and Mississippi were the other states where the cost of CSR was added to the premiums for all plans that year). The Indiana Department of Insurance confirmed by email in June 2018 that they had not instructed insurers on how to add the cost of CSR for 2019, and were allowing insurers to make their own determination about how to incorporate it into the rates they filed for 2019.

However, CareSource’s filing for 2019 clarified: “The Indiana DOI allowed the CSR subsidy non-payment to be spread across all on- and off-exchange plans equally in the single risk pool, and prefers consistency across all carriers.” (ie, keeping the broad load approach that was used for 2018). So Indiana was one of just three states continuing to use the broad load approach for 2019 (the other two were West Virginia and Mississippi), and they are continuing to take the same approach for 2020.

Adding the cost of CSR to silver plans (in particular, to only on-exchange silver plan) is the most beneficial approach for consumers. It results in larger premium subsidies, since the subsidies are based on keeping the cost of the second-lowest-cost silver plan at an affordable level. Those larger premium subsidies benefit everyone who gets premium subsidies (in 2019, that’s 68 percent of the exchange enrollees in Indiana), including people who buy non-silver plans. People who don’t qualify for premium subsidies can buy non-silver plans, or, if the cost of CSR has only been added to on-exchange silver plans, they can buy an off-exchange silver plan without having to pay the extra CSR cost as part of their premiums. But Indiana is continuing to take a broad load approach, which means that disproportionately large premium subsidies are not available in the state, and people who don’t get premium subsidies have no choice but to pay for the cost of CSR in their premiums.

rate changes in previous years

Here’s a look at how average premiums have changed in Indiana’s individual market since ACA-compliant plans debuted in 2014:

2015: Average increase of 5%

Premiums increased by an average of about five percent in 2015, according to an Indiana Department of Insurance representative. A study by The Commonwealth Fund matched that estimate. The 2015 increase was much more modest than in the years leading up to the passage of the Affordable Care Act.

2016: Average increase of just 0.7%

Across the 8 carriers that continued to offer plans in the exchange in Indiana, the Department of Insurance calculated an approved weighted average rate increase of 0.7 percent for 2016 (they also posted a complete list of their individual and small group market carriers and their approved rate changes for 2016). Although Indiana’s average rate increase for 2016 was considerably lower than the national average, that also has to be viewed in light of the fact that premiums in Indiana were higher than the national average in 2014 and 2015.

Indiana was one of just four states using Healthcare.gov where the average benchmark premium was lower in 2016 than it was in 2015. And the drop was more significant in Indiana than any of the other states, at 12.6 percent. But benchmark premiums only tell part of the story, since the benchmark plan can change from one year to another, and it’s just one plan out of many that are offered in the exchange.

2017: Average increase of almost 19%

For the four remaining carriers that are offering plans in the Indiana exchange in 2017, the approved average rate increase ended up being 18.9 percent. But that ranged from a 5.3 percent decrease for Celtic/Ambetter, to a 29 percent increase for Anthem BCBS.

Indiana was again notable in that it was one of only two HealthCare.gov states where the average benchmark (second-lowest-cost silver) plan premium was lower in 2017 than it was in 2016. Average benchmark rates in Indiana were 3 percent lower in 2017, while the average across all HealthCare.gov states was a 22 percent increase. For a 27-year-old, the average benchmark plan in Indiana was just $229/month (before subsidies) in 2017, versus $296/month across all HealthCare.gov states.

But in order to get the lower rates, or even to avoid a significant rate increase, many enrollees had to pick a different plan for 2017. The plans available in 2017 were all HMOs with narrower networks than some enrollees were used to having. And Anthem, with has the most name-brand recognition, had the highest premiums.

Subsidies are tied to the price of the benchmark plan, so average subsidies are slightly smaller in Indiana in 2017. That means enrollees who weren’t willing to switch plans ended up, in some cases, bearing the full brunt of their existing plan’s rate increase, since subsidies didn’t keep pace with the rate increases on the more expensive plans.

2018: Average increase of 24%, due in large part to CSR defunding (cost of CSR spread across premiums for all plans)

CareSource and Ambetter/Celtic both filed rates for 2018 coverage in the exchange. In early October, the Indiana Department of Insurance published the approved average rate changes, which were unchanged from the revised rate proposals that insurers filed in August, and amounted to an average increase of nearly 24 percent (about 20 percent for CareSource and 35.7 percent for Ambetter/Celtic). The weighted average rate increase didn’t account for the fact that the majority of the exchange enrollees in Indiana had to switch to a different plan for 2018, due to the departure of Anthem and MDwise from the exchange.

Notably, the approved rate changes were based on the assumption that funding for cost-sharing reductions (CSR) would not continue in 2018. The filings that the insurers had submitted earlier in the year (with an average increase of just 7.7 percent) were based on the assumption that CSR funding would continue, so the revised rate changes were significantly larger. And soon after Indiana approved the revised filings, the Trump administration announced that federal funding for CSR would end immediately.

The cost of CSR has been added to premiums since 2018, but nothing has changed about the availability of CSR benefits for people who select silver plans and have eligible incomes (between 139 and 250 percent of the poverty level).

As noted above, Indiana directs insurers to spread the cost of CSR across premiums for all ACA-compliant plans, on and off-exchange, instead of adding it only to silver-plan rates (as most states do). The Indiana Department of Insurance noted that their decision to spread the load across all plans was an effort to keep the price variations between each metal level somewhat consistent, so that silver plans would still be less expensive than gold plans, for example. But the result is that there was no way for people who don’t get premium subsidies to escape the additional cost, as it is built into all plans, both on and off-exchange.

But the nature of the ACA’s premium subsidies means that they increase when the cost of coverage in a given area increases, and that protected most Indiana exchange enrollees from having to bear the full brunt of the rate hikes.

2019: Average increase of 2.6%

Both exchange insurers in Indiana expanded their coverage areas for 2019, giving people in most counties the option to pick from either insurer. The average approved rate increase in Indiana’s individual market was 2.6 percent for 2019: An average increase of 5.4 percent for CareSource, and an average decrease of 0.5 percent for Celtic/Ambetter.


A 40-year-old in Boone County (Indianapolis area) earning $30,000 qualifies for a $171/month subsidy in 2019. His after-subsidy premium ranges from $180/month to $422/month, depending on the plan he selects. But the ultra-low-cost bronze plans that are available after subsidies in many parts of the country are not available in Indiana, because the cost of CSR has been spread across all plans, eliminating the possibility of disproportionately large premium subsidies.

If that same 40-year-old lives in Ripley County, he has options from both insurers in 2019, whereas only CareSource offered plans for 2018. But his subsidy is only $35/month and his after-subsidy premium will range from $199/month to $480/month, depending on the plan he picks. In 2018, a 40-year-old in Ripley County earning $30,000 was eligible for a premium subsidy of $127/month, and could pick from plans with premiums (after the subsidy was applied) that ranged from $162/month to $342/month.

In Spencer County in southern Indiana, a 40-year-old earning $30,000 in 2018 qualified for a subsidy of $93/month. The cheapest plan available to him was a CareSource Bronze $7,250 deductible for $166/month after the subsidy. In 2019, if he is now 41 but still earning $30,000, he’ll qualify for a $59/month subsidy. But if he kept that CareSource Bronze plan (which now has a deductible of $7,400) he’s paying $222/month in premiums. In order to get the cheapest available plan in 2019, he needs to switch to Ambetter/Celtic’s Essential Care 2 HSA, which has a $6,650 deductible and costs $198/month. And even still, that’s more expensive than the lowest-cost bronze plan was in 2018, after the subsidy.

In all cases, the after-subsidy cost of the benchmark plan is very similar from 2018 to 2019 (slightly higher, but the difference is only a few dollars in most cases). The lower premium subsidy and higher after-subsidy rates in 2019 are due to Ambetter/Celtic’s lower prices, and the fact that there’s no longer as much of a difference (pre-subsidy) between the cost of the benchmark plan and the cost of the lowest-priced plan.

In areas where Ambetter/Celtic has entered the market, they’ve generally priced their plans below the prices of the existing plans, which means the benchmark rates decreased for 2019. That results in lower subsidies, because the subsidies don’t need to be as large in order to get the after-subsidy premium for the benchmark plan down to an affordable level. But it also means that people in some parts of Indiana needed to be particularly careful when renewing their coverage for 2019, as their subsidy might be a lot smaller than what they were getting in 2018. [This is not the case statewide, though. Across all of Indiana, the average benchmark premium was unchanged from 2018, which means that average premium subsidy amounts across the whole state are very similar to what they were in 2018.]

Enrollment in Indiana’s exchange: 2014-2019

Exchange enrollment peaked in Indiana in 2015, and has steadily declined since then, dropping by about 32 percent as of 2019:

Some of the enrollment decrease in 2016 was likely due to the fact that Medicaid expansion in Indiana didn’t take effect until February 2015; low-income residents who were enrolled in heavily subsidized exchange plans in 2015 had transitioned to Medicaid by 2016.

Enrollment decreases in subsequent years are due to a variety of factors, including higher premiums for people who don’t get premium subsidies, a shorter enrollment window (just over six weeks, instead of the three-month+ window that was available in earlier years), the expansion of short-term health plans (Indiana has agreed to go along with those rules as of mid-2019), the Trump Administration’s decision to sharply reduce funding for HealthCare.gov’s outreach and enrollment assistance, and the elimination of the individual mandate penalty at the end of 2018.

Insurer participation in Indiana’s exchange: Nine insurers by 2015, but only two since 2018

Indiana residents had many more choices on the federal marketplace for 2015 that they did in 2014. The number of insurers more than doubled, going from four to nine. And, the number of available plans jumped from 278 to 975.

According to the Indiana Department of Insurance, rughly 85 percent of Indiana’s ACA-compliant individual plans had been sold through the exchange in 2015, and Anthem Blue Cross Blue Shield had about 65 percent of the on-exchange market share in 2015.

Humana exited the individual market in Indiana at the end of 2015, but Humana didn’t participate in the exchange previously, so it was only the off-exchange market that they exited.

In addition to Humana, Time/Assurance exited the market (nationwide) at the end of 2015. Unlike Humana, Time did offer plans in the exchange in 2015.

Coordinated Care appeared on Indiana’s list of carriers as a new off-exchange carrier for 2016. Coordinated Care offered on-exchange plans in 2015, but they cross-walked all of their exchange business to Celtic Insurance for 2016. They came to an agreement with CMS that called for them to maintain one ACA-compliant Coordinated Care plan, available outside the exchange. It’s a platinum plan, and they did not actively market it.

UnitedHealthcare offered plans only outside the exchange in 2016 (United’s subsidiary, All Savers, did offer on-exchange plans), but exited the individual market entirely in Indiana at the end of 2016. And four on-exchange insurers — All Savers (UnitedHealthcare), Southeastern Indiana Health Organization, Physicians Health Plan, and Indiana University Health Plans — exited the market in Indiana at the end of 2016. As a result of insurer exits and plan redesigns, there were no PPO options available in the individual market in Indiana by 2017.

The Indiana Department of Insurance confirmed that Aetna filed rate proposals to join the Indiana exchange for 2017, and was planning to have coverage options available both on and off-exchange when open enrollment began on November 1, 2016. But that plan was scuttled in early August, when Aetna announced that they were not going to expand into any new exchanges for 2017.

When rates and plans were initially filed for 2018, there were four counties in Indiana where no insurers were planning to offer coverage in the exchange: Decatur, Jackson, Wayne, Grant. But in early August, CareSource agreed to remain in Grant, Decatur, and Jackson counties. Wayne County did not have any insurers slated to offer coverage at that point, but by mid-August, Celtic/Ambetter had agreed to offer coverage in Wayne County (Wayne County has 67,000 residents, and 1,166 of them enrolled in exchange plans for 2017).

Celtic/Ambetter’s revised filing also included coverage for Decatur and Jackson counties, although CareSource was the only insurer that filed to offer coverage in Grant County. CareSource later submitted a revised filing that included Wayne County — so although Wayne County residents were initially facing the prospect of having no insurers in the exchange in 2018, they ended up having two (CareSource and Celtic/Ambetter).

Anthem and MDwise, both of which offered plans statewide in the exchange in 2017, opted to leave the exchange at the end of 2017. According to the Indy Star, 46,000 Indiana residents had exchange plans from Anthem in 2017, and 30,800 had exchange plans from MDwise.

MDwise exited the individual market altogether. But Anthem has continued to offer just one off-exchange catastrophic plan in five counties (Benton, Newton, White, Jasper, and Warren). This is the same strategy that Anthem used in Virginia, Ohio, Wisconsin, and Nevada; by keeping one off-exchange plan, the insurer prevented a statewide market exit, which would preclude a return to the state’s individual market for five years under federal rules that predate the ACA. With the off-exchange plan still available in a small portion of the state, Anthem maintains the option to return to the Indiana market at any time in the future, should they choose to do so.

So all of MDwise’s individual market enrollees and virtually all of Anthem’s individual market enrollees lost their coverage at the end of 2017. Between the two insurers, more than 100,000 people in Indiana saw their plans terminated at the end of 2017.

Find a short-term health plan in Indiana for as little as $50 a month.

Since 2018, Celtic/Ambetter and CareSource have been the only insurers offering plans in the Indiana exchange. But their coverage areas have grown, and both will be offering coverage statewide as of 2020 (in 2018, CareSource offered plans in 75 counties and Celtic offered plans in 43 counties; those grew to 79 and 92 counties, respectively, by 2019, and both insurers will offer plans in all 92 counties in 2020).

How Indiana approached exchange implementation

Indiana is among the majority of states that opted to use the federal health insurance marketplace, HealthCare.gov. While former Gov. Mitch Daniels was a critic of the Affordable Care Act, he refrained from making a final decision about the state’s marketplace and asked the three gubernatorial candidates for their opinions. Following the election, then Gov.-elect Mike Pence weighed in and rejected both the state-run and partnership models.

In 2014, Indiana Attorney General Greg Zoeller and 39 school districts filed a suit challenging premium subsidies in the state as it did not operate its own health insurance exchange. A U.S. District Court judge delayed ruling on the suit, given that the U.S. Supreme Court was taking up the issue in King v. Burwell (ultimately, the Supreme Court ruled that subsidies are legal in states that use Healthcare.gov)

In January 2015, several state representatives introduced HB1479 to “prohibit any agency of the state from assisting in the enforcement of the Patient Protection and Affordable Care Act.” The bill would have prohibited Indiana insurance officials from enforcing violations of the Affordable Care Act and would have allowed state residents subject to the federal penalty for not having health insurance to deduct the penalty amount on their state taxes. The bill did not pass the House Ways and Means Committee however, so it was not taken up in the full House.

Medicaid expansion began in 2015

In January 2015, Indiana received federal approval of its waiver for Medicaid expansion. The Healthy Indiana Plan, or HIP 2.0, requires most newly eligible beneficiaries to contribute to a health savings account (HSA) and to pay co-payments for emergency room visits for non-emergency care. HIP 2.0 is fairly complicated, with various contribution and benefit levels based on income and whether or not a beneficiary makes the required HSA contribution.

Indiana began accepting HIP 2.0 applications immediately after receiving approval, with coverage effective February 2015. Indiana officials estimated that 350,000 residents would be eligible for the program. According to a state press release, the approval of HIP 2.0 replaces traditional Medicaid coverage for Indiana’s non-disabled, non-elderly adults.

More than 235,000 previously uninsured residents had enrolled in HIP 2.0 in its first year, and by mid-2019, total Medicaid/CHIP enrollment in Indiana was 30 percent higher than it had been at the end of 2013.

Indiana health insurance exchange links

HealthCare.gov
800-318-2596

Affordable Care Act Resources on IN.gov

State Exchange Profile: Indiana
The Henry J. Kaiser Family Foundation overview of Indiana’s progress toward creating a state health insurance exchange.

Indiana Department of Insurance
Assists consumers who have purchased insurance on the individual market or who have insurance through an employer who only does business in Indiana.
(800) 622-4461 / idoi@idoi.in.gov


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.