Average benchmark plans less expensive in 2016
Open enrollment for 2016 began on November 1, and continues until the end of January. Things look pretty good in Maine as far as health insurance premiums go. The three carriers in the exchange all have very modest overall rate changes for 2016:
- Community Health Options (a CO-OP, originally called Maine Community Health Options), which has about 80 percent of the market share in the exchange, proposed a 0.5 percent increase. Rate changes were approved as filed, and range from an average 1.73 percent decrease to a 0.54 percent increase.
- Anthem BCBS has “most” of the remaining market share, and proposed a 5.7 percent average increase. Average approved rate changes range from a 1.1 percent decrease to a 5.49 percent increase.
- Harvard Pilgrim Health Care proposed a 4.8 percent decrease, and Healthcare.gov’s quoting tool confirms that Harvard Pilgrim’s rates are indeed lower in 2016 than they were in 2015.
Kaiser Family Foundation compiled data on benchmark plan (second-lowest-cost Silver) premium changes in major cities across the country. In 2015, the average pre-subsidy benchmark premium for a 40-year-old non-smoker in Portland was $282/month. In 2016, it’s only 1.1 percent higher, at $285/month. But state-wide, the average benchmark premium in Maine will be 1.2 percent less expensive than the average benchmark premium in the state in 2015. Keep in mind that the benchmark plan can be offered by a different carrier from one year to the next – the designation just means it’s the second-lowest-cost Silver plan for a given area in a given year.
The very small overall rate change is particularly significant in Maine given the fact that it’s the second year in a row that their overall rates have been almost unchanged.
The individual market in Maine includes five carriers (link includes chart detailing the plans available from each carrier), but two of them (HPHC and Aetna) only offer plans outside the exchange in Maine.
Maine is one of 23 states where a CO-OP health plan was established under the ACA. 11 have not survived however; CoOpportunity (Iowa and Nebraska) shut down at the start of 2015; Health Republic in New York will cease operations at the end of November 2015, and nine other CO-OPs will close at the end of 2015.
An HHS report published in July analyzed the financial and enrollment status of the CO-OPs, and Maine’s (Community Health Options) stood out as the only one with a positive net income in 2014. Community Health Options also exceed enrollment expectations in 2014, enrolling 257 percent of their projected 2014 target.
In 2014, one one other carrier – Anthem – competed with the CO-OP for individual enrollments on the Maine exchange, and the CO-OP garnered about 83 percent of the enrollments. In 2015, Harvard Pilgrim joined the exchange, but even with two competitors, Community Health Options still got about 80 percent of the 2015 enrollments.
Universal health care study vetoed
In Mid-June, Maine lawmakers passed LD384, a bill to study options for universal health care in Maine that would be compliant with the ACA. The bill called for consultants to develop at least three ACA-compliant universal health care designs and submit them to the legislature by December 2016. It also made available $100,000 in federal grant money for the study, to be dispersed by the end of June 2016. The final proposal must include at least one of each of the following models:
1. A government-funded single payer system that only allows private health insurance to cover supplemental benefits, with no private coverage available for benefits covered by the single-payer system.
2. A government administered that incorporates integrated health care delivery and payment.
3. A “public health benefit option” run by the state, but with the option for people to select either the public option or private health insurance.
A much larger percentage of eligible Maine residents opted to enroll in medical insurance through HealthCare.gov in 2015 compared to 2014. This year saw nearly 60 percent of eligible Maine residents (about 75,000 of 124,000) purchase coverage versus just 36 percent in 2014. About 80 percent of them selected Community Health Options, an ACA-created CO-OP.
By the end of June, effectuated enrollment had declined to 66,828 (attrition is a normal part of the individual market; nationwide, effectuated enrollment declined during the second quarter of 2015, as the marketplaces stepped up their enforcement of documentation requirements for enrollees’ immigration and financial status). Nearly 89 percent are receiving premium subsidies, and 58 percent are receiving cost-sharing subsidies (available to reduce out-of-pocket exposure on silver plans for enrollees with incomes up to 250 percent of the poverty level).
Open enrollment for 2016 will continue until January 31, 2016. After that point, 2016 coverage will only be available for purchase (including outside the exchange) if you have a qualifying life event. But enrollment is year-round for those who qualify for Medicaid/CHIP, and for Native Americans.
Higher tax penalty if you’re uninsured in 2016
The penalty for not having insurance goes up again in 2016. If you don’t qualify for an exemption, you’ll have to pay the higher of:
- 2.5% of annual household income. The penalty can never exceed the national average cost for a bronze plan. The IRS announced in Revenue Procedure 2015-15 that the maximum 2015 penalty would be $2,484 for a single individual and $12,420 for a family of five or more. It will be a little higher in 2016, but the cap would only apply to very wealthy households.
- $695 per adult or $347.50 per child under 18. The maximum penalty under this method will be $2,085 per household.
Although there were still 33 million uninsured people in the US in 2014, the IRS reported that just 7.5 million taxfilers were subject to the penalty in 2014 (out of more than 138 million returns). According to IRS data, 12 million filers qualified for an exemption (you can see a list of exemptions here).
This penalty calculator can help you figure out how much you may have to pay if you aren’t covered during 2016.
2015 rates and insurers
According to the Maine Bureau of Insurance, Maine Community Health Options (MCHO), Anthem Health Plan of Maine, and Harvard Pilgrim Health Care are offering about 40 individual polices through the exchange. These three insurers are also selling policies to small businesses through the SHOP exchange. Harvard Pilgrim was new to the Maine marketplace in 2015.
Aetna only offered plans outside the exchange in 2015 (that’s also the case in 2016). Mega, a Texas-based insurer, withdrew from the Maine market at the end of 2014.
Average premiums for 2015 were the same or slightly lower than 2014 rates. MCHO, which won a large percentage of 2014 enrollees, kept its rates flat for 2015. Anthem’s rates dropped an average of 1.1 percent.
Uninsured rate dropped after 2014 open enrollment
According to a Gallup-HealthWays survey, Maine’s uninsured rate was 16.1 percent in 2013, and had dropped to 9.4 percent by the first half of 2015.
Although enrollment in private plans through the exchange stood at nearly 67,000 people in mid-2015, the state’s refusal to accept federal funding to expand Medicaid means that the uninsured rate is still considerably higher than it would be if Medicaid expansion were in place.
History of the Maine marketplace
Maine’s health insurance marketplace is operated by the federal government. Gov. Paul LePage announced the state’s decision against a state-run model in November 2012. In a letter to then HHS Secretary Kathleen Sebelius, LePage said the Affordable Care Act has “severe legal problems” and state-run exchanges will be “actually controlled” by the federal government.
LePage’s administration did explore creating a state-run exchange. The governor appointed an advisory committee, and in September 2011 that committee recommended that Maine implement a state-run exchange. The committee also issued recommendations as to how the exchange should be structured and governed. However, Maine ultimately joined the Supreme Court case that attempted to overturn the Affordable Care Act, and the state legislature failed to pass exchange legislation in both 2011 and 2012.
No Medicaid expansion
Maine is the only state in the north-eastern US that has not expanded Medicaid. It’s also got the highest uninsured rate in the north-east, and Washington County still has 14 percent of its residents without health insurance coverage.
Democrats in the Maine Legislature pushed for Medicaid expansion during the 2014 session, but could not overcome Gov. LePage’s ongoing opposition on the issue. LePage has vetoed five Medicaid expansion bills. The November election offered hope for a turnaround on Medicaid expansion, with two challengers supporting expansion and LePage was considered vulnerable. However, LePage was returned to office.
Maine has provided Medicaid coverage to low-income young adults age 18 – 20 since 1991, but LePage had proposed eliminating coverage for 19 and 20 year old non-disabled adults as a way to save the state $3.7 million in Medicaid costs. A federal appeals court prevented that change in late 2014, and in June 2015, the Supreme Court declined to hear Maine’s case. As a result, 6,500 young adults in Maine will be able to keep their Medicaid coverage.
But there are 24,000 adults in the coverage gap in Maine; they don’t qualify for Medicaid because the state has not expanded the eligibility guidelines, but they also don’t qualify for premium subsidies in the exchange because their income is under the poverty level. Until the state expands Medicaid, those people have no realistic access to health insurance coverage.
Maine health insurance exchange links
State Exchange Profile: Maine
The Henry J. Kaiser Family Foundation overview of Maine’s progress toward creating a state health insurance exchange.