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Qualifying events

Our look at the ACA qualifying events which can let you buy health insurance outside open enrollment.

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Indiana health insurance exchange / marketplace

196k enrolled; average rate increase less than 1%

196,242 people had enrolled in private plans through the Indiana health insurance exchange during the 2016 open enrollment period. That total already accounted for attrition (cancelled and unpaid enrollments) as of February 1, whereas in prior years, HHS waited until after open enrollment had ended to begin subtracting unpaid and cancelled enrollments.

34 percent of the enrollees are new to the Indiana exchange for 2016, and 81 percent are receiving premium subsidies to make their coverage affordable.

Open enrollment for 2016 ended on January 31. Open enrollment for 2017 will start on November 1, 2016, but until then, enrollment will only be available – on or off-exchange – for people who experience a qualifying event (Native Americans can enroll year-round, as can anyone eligible for Medicaid or CHIP).

Benchmark premiums lower in 2016

Indiana is one of just four states using Healthcare.gov where the average benchmark premium is 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. In Indianapolis, the decline is 9.4 percent, according to Kaiser Family Foundation data. 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.

Ultimately, the result of the lower benchmark premiums is that subsidy amounts are also lower in 2016 than they were in 2015. And although average average premiums only increased slightly in Indiana for 2016 (see below), there was still an overall increase, and it was rather significant on some plans. The weighted average rate increase for the entire exchange market was very small, but the actual rate changes on a per-plan basis vary from a 20 percent decrease to a 36 percent increase.

The fact that benchmark premiums – and thus subsidies – declined for 2016 made it particularly important for people to shop around during open enrollment. Otherwise, they may have found that their net premiums were more than they were expecting in 2016, due to declining subsidies.

0.7% weighted average rate increase for 2016

On September 1, 2015, the Indiana Department of Insurance posted a complete list of their individual and small group market carriers and their approved rate changes for 2016. The only thing missing from the list was market share data, which made it hard to calculate a weighted average rate change. So I contacted the Department of Insurance to see if I could obtain more information about market share. Here’s what they told me:

  • Roughly 85 percent of Indiana’s ACA-compliant individual plans had been sold through the exchange in 2015.
  • Anthem Blue Cross Blue Shield, (average rate increase of 3.8 percent for 2016) had about 65 percent of the on-exchange market share in 2015.
  • Humana has exited the individual market in Indiana (their rate filing for 2016 had been withdrawn, but it wasn’t entirely clear what their status was). Humana didn’t participate in the exchange previously, so it’s only the off-exchange market that they exited.
  • Across the 8 carriers that are continuing 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 did that by utilizing SERFF data to obtain market share data. SERFF data is available to the public but can be quite time consuming to sort through.

Although Indiana’s average rate increase for 2016 is 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.

According to a June 2015 analysis by the Indianapolis Business Journal, Anthem’s proposed 3.8 percent rate increase (which was approved as-requested) was expected to result in an average annual premium of $5,405 (pre-subsidy) in 2016, putting Anthem’s rates seventh highest out of nine (now eight) carriers selling plans in the exchange.

Given how price-sensitive consumers tend to be when shopping for health insurance, it’s unlikely that Anthem held onto its significant market share in 2016. This is compounded by the fact that Anthem eliminated broker commissions in Indiana (and several other states) for plans effective April 1 or later (ie, plans sold as a result of qualifying events).

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 appears 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 calls for them to maintain one ACA-compliant Coordinated Care plan, available outside the exchange. It’s a platinum plan, and they are not actively marketing it; the carrier did not project any sales for 2016.

So realistically, the only Indiana carrier that is offering individual plans only outside the exchange in 2016 is UnitedHealthcare (although United’s subsidiary, All Savers, does offer on-exchange plans).

Healthcare.gov’s rate review tool initially only showed proposed rate increases of ten percent or more prior to the start of open enrollment. It was notable that in Indiana, only one exchange carrier in the individual market proposed double digit rate hikes for 2016 (not counting Time and Humana, which both withdrew their filings). Physicians Health Plan of Northern Indiana requested an average rate increase of 14.5 percent for 2016, although regulators bumped that down slightly to 13.5 percent.

PHP cited the phasing out of the ACA’s reinsurance program, along with poorer-than-expected health among people who have already enrolled. This is the same general theme echoed nationwide by carriers justifying significant rate increase proposals for 2016.

Some carriers not yet profitable in the exchange

As is the case nationwide, some carriers in the Indiana exchange are struggling to make a profit on their exchange business. In late November 2015, the Indianapolis Business Journal reported that about half of the carriers selling plans through the Indiana exchange are losing money in the process.

Indiana University Health Plans Inc. was nearly $2.7 million in the red for 2015, although the carrier received a $5 million capital contribution from its parent corporation, the IU Health hospital system. MDwise Marketplace Inc. lost nearly $615,000 from January through September 2015, and SIHO Insurance Services – which began offering exchange plans this year – was also losing money (they only had 536 enrollees in the exchange in 2015, so it’s not clear whether they were losing money on off-exchange business and other lines of coverage as well).

But the news is not all bad for insurers: CareSource Inc. has a net positive income of nearly $5 million in the Indiana exchange in 2015.

For 2014 and 2015, carriers were mostly making educated guesses in terms of pricing their policies. Premiums for 2016 were based on more than a full year of claims history, since they were filed in the spring of 2015, more than a year after the exchanges became operational. And when carriers file rates for 2017, they’ll have more than two years of claims data on which to based their rate justifications.

Ultimately, carriers will have to get to a point where they’re no longer losing money in order to continue participating in the exchanges, but experts also say it’s possible that the “pent up demand” for healthcare from people who were uninsured prior to 2014 is starting to wane, and that losses won’t be as high going forward. On the other hand, the ACA’s reinsurance and risk corridors programs will terminate – as scheduled – at the end of 2016, which could result in higher premiums nationwide in 2017.

 2015 enrollment

According to the U.S. Department of Health and Human Services (HHS), 218,617 Hoosiers selected qualified health plans (QHPs) during 2015 open enrollment. The Kaiser Family Foundation estimates that 43 percent of eligible Indiana residents took advantage of the opportunity to purchase health insurance.

Attrition is a normal part of the individual health insurance market, particularly with the new system that limits enrollments for most people to a three-month window. In addition, Healthcare.gov has become more efficient at terminating coverage and/or subsidies for people who have failed to provide documentation to verify immigration status or eligibility for financial assistance. By the end of June 2015, in-force enrollment in private plans through the Indiana exchange stood at 167,261 people. 87.4 percent were receiving premium subsidies that average $315 per month. For 2015, total subsidies for Indiana residents amounted to $552 million.

With the Supreme Court’s landmark ruling in June 2015 (King v. Burwell) that subsidies are legal in every state, regardless of whether the exchange is run by the state or federal government, subsidies are no longer in danger for those 146,000 people. The Kaiser Family Foundation had estimated that their premiums would have increased by 271 percent if the subsidies had been eliminated.

Not only will subsidies remain intact, but the individual market in Indiana will not be subject to the massive destabilization that would have occurred had the King plaintiffs prevailed and subsidies been eliminated. If that had happened, rates in the individual market for people who were already paying full price for their coverage would have increased by up to 90 percent, and the individual market pool size would have shrunk by 70 percent.

Modest increase in 2015 premiums

2015 premiums were an average of about five percent higher than 2014’s premiums, 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.

2015 carriers

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 Atlantic Information Services, nine insurance companies offered individual health insurance through the Indiana marketplace in 2015. Anthem BCBS, Coordinated Care, and Physicians Health Plan returned from 2014. All Savers, Caresource, IU Healthplans, MDwise Marketplace, Southeastern Indiana Health Organization, and Time/Assurant were new for 2015. Note that not all insurers offer plans in all counties.

SHOP for small businesses

Businesses with 50 or fewer full-time employees can now enroll online in the Small Business Health Options Program (SHOP). Small businesses can sign up on the SHOP throughout the year; there isn’t a specific open enrollment period like there is for the individual marketplace.

In Indiana and 13 other states that use the federal exchange, small employers were able to offer “employee choice” starting in 2015 (it was delayed until 2016 in the remaining states that use Healthcare.gov). Under this option, employee can choose among health plans within a single metal level selected by the employer.

Penalties increase for going without coverage

The penalty for people who don’t have health insurance was higher in 2015 than it was in 2014, and will increase again for those who remain uninsured in 2016. For those who are uninsured in 2016 and not eligible for an exemption from the individual mandate, the penalty will be the greater of:

  • 2.5% of annual household income above the tax filing threshold. The maximum penalty under this calculation method is the national average premium for a bronze plan, which will be a little higher than it was in 2015.
  • $695 per adult or $347.50 per child under 18. The maximum penalty per family using this method is $2,085.

Use this penalty calculator to see how much you may have to pay if you don’t have health insurance.

How many people enrolled in 2014?

During 2014 open enrollment, 132,423 Hoosiers signed up for qualified health plans, according to federal government reports. Eighty-nine percent qualified for financial assistance. In addition, 95,495 people qualified for Medicaid or the Children’s Health Insurance Program (CHIP) under existing eligibility rules (i.e., not through Medicaid expansion, as Indiana’s Medicaid expansion didn’t take effect until 2015).

Indiana’s uninsured rate dropped from 15.3 percent in 2013 to 13.6 percent in 2014, according to Gallup-Healthways poll.  It fell further to 11.1 percent by mid-2015, likely helped by the fact that Medicaid expansion took effect in 2015 in Indiana.

How Indiana approached exchange implementation

Indiana is among the 26 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 does 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 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 estimate 350,000 are 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.

By December 2015, total Medicaid/CHIP enrollment in Indiana was 27 percent higher than it had been at the end of 2013, and more than 235,000 previously uninsured residents had enrolled in HIP 2.0 in its first year.

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

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