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Montana health insurance exchange / marketplace

Subsidies safe for 39k, but rates could go up considerably in 2016

King v. Burwell – subsidies safe

On June 25, the Supreme Court ruled that subsidies are legal in every state, regardless of whether the exchange is run by the state or federal government.  That’s great news for the estimated 39,000 people in Montana who would have lost their subsidies if the Court had ruled that subsidies can only be provided by state-run exchanges.

Even for people who don’t currently have subsidies, the verdict is beneficial; the American Academy of Actuaries had estimated that premiums in the entire individual market in impacted states would climb by at least 35 percent – and as much as 55 percent –  if subsidies had been eliminated.

2016 rates

The rate hikes mentioned above would have been in addition to the rate increases already proposed for 2016, which account for the fact that in 2014, carriers in the state’s market lost money due to higher-than-expected claims costs.

2015’s individual market premium increase in Montana was “historically low” at an average of just 1.6 percent.  The Insurance Commissioner’s office currently has an outside actuary reviewing proposed rates for the individual market in 2016, in an effort to get final rates as low as possible.  But it does appear that rates will rise considerably in Montana in 2016, as all three carriers in the exchange have requested double digit rate hikes.

A fourth carrier, Time, also proposed steep increases for 2016, but their parent company, Assurant, subsequently announced that they are exiting the individual market nationwide, and will not participate in the open enrollment period that begins November 1; the 7,283 Montana residents who currently have individual coverage from Time will need to find replacement policies by the beginning of 2016.

Blue Cross Blue Shield of Montana has requested rate increases averaging 20 percent to 22 percent for their individual plans, and PacificSource has proposed a 32 percent average rate increase.

Montana Health Cooperative has requested an average rate increase of 34 percent, and the CO-OP is eliminating their platinum plan option for 2016, as the rich benefits of the plan attracted insureds with significant healthcare needs and resulted in losses for the CO-OP.  Out of 14,000 enrollees, just 120 insureds generated about half of the CO-OP’s claims expenses last year.

Although rates might rise considerably in 2016, the majority of Montana exchange enrollees are receiving premium subsidies, and thanks to the Supreme Court’s ruling at the end of June, those will still be available next year.  If the premium of the second lowest-cost silver plan increases, subsidies will increase for everyone in that area, to offset the higher prices.  And as always, it will be vitally important for people to shop around during open enrollment, as the plan that represented the best value in 2015 might not be the same as the plan that does so in 2016.

Uninsured rate down to 15.8%

20.7 percent of Montana’s non-elderly population was uninsured in 2013.  But in 2014, that number fell to 15.8 percent, giving Montana the tenth-highest percentage reduction in uninsured rate in the nation.  Of the 11 states with the highest percentage reduction in uninsured rate, all but Montana expanded Medicaid in 2014 and also established their own health insurance exchanges.  Montana did neither (although Medicaid expansion is looking like a very real possibility in 2015), but still had a significant reduction in its uninsured rate.  If and when CMS approves the state’s Medicaid expansion waiver, the uninsured rate should see another large drop.

2015 enrollment in Montana’s exchange

54,266 people enrolled in private plans through the Montana exchange during the 2015 open enrollment period (through February 22, including the week-long extension).  HHS had projected 47,000 enrollees, and Charles Gaba of ACAsignups projected 57,000 enrollees in Montana by the end of open enrollment.  Ultimately, the final total was in the middle, but closer to the higher number that Gaba had predicted.

As expected, some enrollees never paid their initial premiums (meaning their coverage never became effective), and some cancelled their coverage soon after it began.  By the end of March, 49,140 Montana residents had in-force private coverage through the exchange.  85 percent are receiving premium subsidies and 51.5 percent are receiving cost-sharing subsidies.

Of the people who selected a plan during the 2015 open enrollment period, 41 percent are new to the exchange for 2015.  Overall, the second open enrollment was much better than the 2014 round;  Montana Insurance Commissioner Monica Lindeen reported that her office fielded far fewer calls this time around from consumers running into difficulties with the exchange.

Open enrollment for 2015 has ended, including the special enrollment period (March 15 to April 30) for people who didn’t know they would have to pay a penalty for being uninsured in 2014.  At this point, 2015 coverage can only be purchased – on or off the exchange – if you have a qualifying event (Native Americans and applicants who are eligible for Medicaid/CHIP can enroll year-round).  The next open enrollment period begins on November 1, for coverage effective January 1, 2016.

Governor signs Medicaid expansion bill

An additional 2,683 people enrolleed in Medicaid or CHIP through the exchange between November 15 and February 22, qualifying under the state’s pre-ACA guidelines.  But Montana made headlines in the spring of 2015, becoming the latest state to approve Medicaid expansion.  Governor Steve Bullock signed Senate Bill 405 into law on April 29, paving the way for Medicaid expansion in the Big Sky Country.  The state still has to submit a waiver proposal to CMS and receive approval, as Montana’s expansion plan has several deviations from straight Medicaid expansion, including premiums, copays, and job training programs.  But assuming CMS grants a waiver, Medicaid expansion could take effect in Montana by late 2015 or early 2016.

The state has finalized the Section 1115 waiver proposal, and it’s currently in the 60 day public comment period.  Once that’s over, the proposal will be submitted to CMS for review.

Lawmakers address healthcare reform

In addition to signing SB 405, Governor Bullock vetoed another healthcare bill on April 29.  Senate Bill 349 would have required health insurance carriers that offer elective abortion coverage to also offer plans without elective abortion coverage.  It passed the House and Senate, but was not supported by any health insurance carriers in the state, and was ultimately vetoed.

Two other ACA-related – but very disparate – bills were introduced in the 2015 legislative session in Montana.  HB 249, the “Healthy Montana Act” would expand Medicaid and enhance access to healthcare and health insurance under the ACA.  But on the other end of the spectrum, HB 256, introduced by Republican Representative Matthew Monforton of Bozeman, would require legislative approval for any further implementation of Obamacare in Montana, including the expansion or Medicaid or the creation of a state-run exchange.

HB 249 stalled in the House in March, but Medicaid expansion was approved by the legislature using SB 405.  HB 256 passed the House and moved to the Senate on February 5, but was indefinitely postponed by the Senate in late March.  HB 256 is clearly anti-ACA, but at the same time, Democratic Governor Bullock – who supports Medicaid expansion – had indicated that he didn’t plan to expand Medicaid without legislative approval anyway (ultimately, he signed SB 405 into law in April, deferring to the legislature to come up with the specifics for Medicaid expansion).

2015 rate increase “historically low”

Across all carriers, the lowest cost bronze plan in the Montana exchange averaged $251/month in 2014, which is very close to the national average of $249.

And 2015’s rate increase was historically low:  In late August, the state announced that rates for 2015 would only be increasing an average of 1.6 percent for individuals (when combined with small group premiums, the average increase is even smaller, at 1.35 percent).  Insurance Commissioner Monica Lindeen described the upcoming rate hike as “historically low”

In all rating areas in Montana, the benchmark plan (second-lowest-cost silver plan) in less expensive for 2015 than it was in 2014.  But in order to get the lower rates, consumers need to shop around in the exchange during open enrollment.  People who had the benchmark plan in 2014 and let it automatically renew will see higher premiums state-wide for 2015.  And because the benchmark plans are less expensive in 2015, subsidies are lower too, highlighting the importance of shopping around during open enrollment.

Navigator outreach

Three organizations in Montana received a total of $609,000 in September to fund their navigator and enrollment assistance efforts for 2015.  Planned Parenthood, the Montana Health Network, and the Montana-Wyoming Tribal Leaders Council are all serving as navigator organizations in the state.

Navigators in Montana are focusing on outreach targeted at uninsured populations within the state, particularly Native Americans.  Native Americans are exempt from the ACA’s individual mandate, and they have access to Indian Health Service care.  But Native American leaders caution that relying solely on IHS can mean foregoing some care, and there are excellent plans available through the ACA that provide enhanced benefits for Native Americans.

There’s also monthly enrollment year-round for Native Americans; the normal open enrollment deadline does not apply.  But despite the enhanced benefits and extended enrollment, an April 2015 report indicated that there’s still a significant disparity in terms of access to healthcare, and that many Native Americans in Montana lack adequate access to healthcare.  There’s hope that the progress being made on Medicaid expansion will help to address the disparity.

Enrollment assisters throughout the state are reporting that is working far better than it was last year, and navigators throughout the country are reporting that enrollment is smoother and easier in virtually every state.

Medicaid expansion history

Until April 2015, Montana had opted out of expanding Medicaid.  Unfortunately, it was an accidental “no” vote that doomed the expansion effort, but there’s no way to undo such a vote after it happens.

The governor’s office is supportive of some aspects of Medicaid expansion, but the legislature only meets every other year in Montana, so the issue couldn’t be re-addressed from a legislative standpoint until 2015.

The Healthy Montana Initiative gathered more than 25,000 signatures in the spring of 2014 in an effort to get Medicaid expansion on the November ballot in Montana, but ultimately failed to reach their goal and the issue was not on the 2014 ballot.  Supporters vowed to redouble their efforts to secure health insurance for the 40,000 Montana residents who are currently in the coverage gap – unable to qualify for Medicaid, and also ineligible for subsidies to purchase private health insurance in the exchange.

Governor Steve Bullock pushed forward with Medicaid expansion again in 2015, although initially the Republican-dominated legislature didn’t appear receptive to his plan to expand Medicaid up to 138 percent of poverty (in line with the ACA’s guidelines).  Instead, leaders in the legislature wanted to expand coverage under their proposed Montana Healthy Family Plan, which would limit expansion to 100 percent of poverty level (people above this limit have access to exchange subsidies, although winning HHS approval to get ACA funding for a plan that limits expansion to 100 percent of poverty level has proven to be difficult in other states).

Many Republicans in the legislature are opposed to the idea of extending Medicaid to able-bodied adults without children, as they prefer to focus Medicaid on low-income seniors and parents, disabled residents, and children.  Although opinions about Medicaid expansion are generally split along party lines in Montana, not all Republican lawmakers in the state are opposed to Medicaid expansion.  Rep. Frank Garner refused to sign an Americans for Prosperity (AFP) pledge card promising to oppose Medicaid expansion, and has expressed support for some form of modified Medicaid expansion.

And ultimately, the Medicaid expansion bill that prevailed was introduced by a Republican – Senator Ed Buttrey from Great Falls.  Although lawmakers approved the bill and the Governor signed it, the state must now submit a waiver request to CMS.  Medicaid won’t be officially expanded in Montana until if and when CMS approves the waiver and federal dollars can be used to fund Medicaid expansion.

2014 enrollment numbers

As of April 19, private plan Obamacare enrollments had been completed for 36,584 Montana residents.  Another 4,638 people had qualified for the existing Medicaid program in Montana (Montana has not yet expanded Medicaid under the ACA).  

In addition to the people who purchased plans through the exchange, nearly 35,000 people enrolled in Obamacare-compliant plans outside the exchange by mid-April.  One of the provisions of the ACA requires that carriers use a single risk pool for all of their individual plans in a state, so each carrier’s off-exchange enrollments will be merged with its on-exchange enrollments for risk purposes – meaning that the additional off-exchange enrollments will be helpful in stabilizing rates.

By mid-July, the number of uninsured residents in Montana was about 30,000 lower than it had been in 2013 – more than a 15% drop in the uninsured rate in the state.  This was achieved with both on and off-exchange enrollments of previously uninsured folks, as well as the “woodwork” effect that has increased Medicaid enrollment even in states like Montana that haven’t expanded Medicaid under the ACA.

Exchange history in Montana

Montana’s legislature not only failed to authorize a state-run exchange, it also passed a bill in 2011 to prohibit the creation of an insurance exchange in Montana.

While Democratic Gov. Brian Schweitzer vetoed that bill, neither he nor Monica Lindeen, the state auditor and insurance commissioner, were able to generate legislative or public support for an exchange.

Consequently, the federal government is operating the exchange in Montana at  Montana is also one of nineteen states that has passed laws making it more difficult for people to serve as navigators for the exchange.

Under the federal model, most aspects of the exchange are managed by the federal government. However, states can retain control of “plan management” functions, and Montana opted to do so. Lindeen’s office released final exchange rates for the first round of open enrollment in mid-August 2013, nothing that the premiums are similar to what they would have been without the ACA.  Her office regulates plans that operate on the exchange, as it does for plans sold outside the exchange.

HHS is also running the SHOP exchange in Montana, providing health insurance for small businesses.  Montana is one of 18 states where the employee-choice feature of the SHOP exchange will be delayed until 2016 – meaning that instead of allowing employees to select from among a variety of options, there will be only one plan for each group in 2015.

Three organizations in Montana received federal grants in 2013 to serve as navigators and assist residents with the enrollment process during the first open enrollment period:  Planned ParenthoodMontana Primary Care Association, and the Montana Health Network.

Grandmothered plans

On November 25, Lindeen announced that Montana would allow health insurance carriers to extend 2013 policies that had been scheduled to terminate at the end of the year, but it was left up to each carrier to decide how to proceed.  Insureds with a policy that was eligible for renewal into 2014 also had the option of switching to an exchange plan.

Montana is not allowing those plans to continue to renew into 2015 however.  People with non-grandfathered pre-2014 plans needed to replace them with ACA-compliant plans at their renewal date in 2014, or during the 2015 open enrollment period.

Montana health insurance exchange links

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

Montana Consumer Assistance Program, Office of the Commissioner of Securities and Insurance
Serves as the state government watchdog for citizens of Montana in the insurance industry

Health Insurance Exchange Page from Montana Commission of Securities and Insurance
Details about how the exchange works, along with legislative history in Montana regarding the exchange creation process.