0.7% weighted average rate increase
On September 1, 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 have been sold through the exchange.
- Anthem Blue Cross Blue Shield, which will have an average rate increase of 3.8 percent, has about 65 percent of the on-exchange market share.
- Humana is exiting the individual market in Indiana (their rate filing had been withdrawn, but it wasn’t entirely clear what their status was).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’re exiting.
- 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.
In addition to Humana, Time/Assurance is exiting the market (nationwide). 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 are cross-walking 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 don’t intend to actively market it; the carrier did not project any sales for 2016.
So realistically, the only Indiana carrier that will be 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 only shows proposed rate increases of ten percent or more, and 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 next year, 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.
Although Indiana’s average rate increase for 2016 will be considerably lower than the national average, that also has to be viewed in light of the fact that premiums in Indiana have been higher than the national average in 2014 and 2015.
According to the Indianapolis Business Journal, Anthem’s proposed 3.8 percent rate increase (which was approved as-requested) will 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 likely that Anthem will hold onto its significant market share in 2016.
Although the weighted average rate increase for the entire exchange market is very small, the actual rate changes on a per-plan basis will vary from 20 percent decrease to a 36 percent increase. So it will be particularly important for enrollees to shop around during open enrollment to make sure that they select the plan that offers the best value for 2016. Since the overall weighted average rate isn’t increasing significantly, it’s unlikely that subsidies will increase by much in Indiana (in fact, they could go down, if the second-lowest-cost silver plan in an area ends up being less expensive than it was last year). So although auto-renewal will be available to most Indiana exchange enrollees, it’s certainly not the best choice.
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, in-force enrollment in private plans through the Indiana exchange stood at 167,261 people. 87.4 percent are receiving premium subsidies that average $315 per month. For 2015, total subsidies for Indiana residents amount to $552 million.
With the Supreme Court’s landmark ruling in June (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.
Ongoing chance to enroll
While the 2015 open enrollment period has ended, various individuals still have opportunities to sign up for coverage before the next open enrollment period:
- Individuals who experience a qualifying life event are entitled to a 60-day special enrollment period.
- Native Americans can enroll anytime during the year.
- Enrollment in Medicaid and the Healthy Indiana Plan (HIP) is open year-round.
The 2016 open enrollment period will run from November 1 to January 31. If you enroll in a plan by December 15, your coverage will be effective January 1, 2016.
Modest increase in 2015 premiums
2015 premiums are up about five percent on average, according to an Indiana Department of Insurance representative. A study by The Commonwealth Fund matched that estimate. The 2015 increase is much more modest than in the years leading up to the passage of the Affordable Care Act.
Indiana residents have many more choices on the federal marketplace for 2015: more insurers are offering more plans. 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 are selling individual health insurance through the Indiana marketplace in 2015. Anthem BCBS, Coordinated Care, and Physicians Health Plan are returning from 2014, and All Savers, Caresource, IU Healthplans, MDwise Marketplace, Southeastern Indiana Health Organization, and Time/Assurant are new for 2015. Note that not all insurers offer plans in all counties.
SHOP for small businesses
Businesses with fewer than 50 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 can offer “employee choice.” 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 is higher in 2015 than it was in 2014, and will increase again for those who remain uninsured in 2016. For people who are uninsured in 2015 and don’t qualify for an exemption, the penalty will be the greater of:
- 2% 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 is $2,484 per person ($12,420 for a family with five or more members).
- $325 per adult or $162.50 per child under 18. The maximum penalty per family using this method is $975.
For those who remain uninsured in 2016, 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).
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 has delayed ruling on the suit, given that the U.S. Supreme Court is taking up the issue in King v. Burwell. The U.S. Supreme Court will hear the case March 4, 2015, and likely announce its decision by late June 2015.
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 prohibit Indiana insurance officials from enforcing violations of the Affordable Care Act and allow state residents who pay a federal tax penalty for not having health insurance to deduct the 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 Feb. 1. 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.
Indiana health insurance exchange links
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.
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