UnitedHealthcare exiting individual market
At the end of 2016, UnitedHealthcare will exit the exchanges (and in general, the individual market altogether) in most of the 34 states where the carrier currently offers health plans in the exchange. Nebraska is one of the states where United will exit the individual market, both on and off-exchange, at year-end. United will continue to offer group plans in Nebraska.
United only joined the Nebraska exchange for 2016 – they weren’t available in the exchange in 2014 and 2015. And their rates are competitive in Nebraska. They offer plans state-wide, and in 65 of the state’s 93 counties, United offers at least one of the two least-expensive silver plans in the exchange.
The exchange in Nebraska had three carriers in 2015, and that grew to four in 2016. But there will once again be just three carriers in 2017. Virtually all Nebraska residents will have access to all three carriers, but there are two counties that will only have plans available from two carriers in 2017, assuming neither of the other carriers expands their coverage offerings (those two counties have one percent of the state’s exchange enrollees in 2016).
Nebraska resists Healthcare.gov re-enrollment
For 2015 and 2016, Healthcare.gov did not have a means of automatically selecting a new plan for enrollees if their health insurer was exiting the exchange altogether. In those instances, enrollees had to either select a new plan themselves during open enrollment, or become uninsured as of January 1.
But in the 2017 Benefit and Payment Parameters, HHS laid out a protocol for automatic re-enrollment that could be used in circumstances where the enrollee’s insurer stops offering coverage in the exchange. According to Inside Health Policy (trial subscription required), Nebraska is one of at least two states that has pushed back against HHS on this issue. Nebraska’s Department of Insurance noted that enrolling people in plans from alternate carriers amounts to selling health insurance without a license, and that state officials will not enroll people in the new plans selected by Healthcare.gov. Nebraska Department of Insurance administrator for health policy, Martin Swanson, has said that the state “reserve[s] the right to investigate any future placement of business by unlicensed entities.” (in this case, “unlicensed entities” refers to the federal government).
Nebraska Department of Insurance administrator for health policy, Martin Swanson, has said that the state “reserve[s] the right to investigate any future placement of business by unlicensed entities.” (in this case, “unlicensed entities” refers to the federal government).
UnitedHealthcare’s exit from the Nebraska exchange is exactly the sort of scenario where this applies. Under the new HHS protocol for re-enrollment, exchange enrollees who have UnitedHealthcare—and who do not return to the exchange by December 15 to select a new plan for 2017—would be auto-enrolled in a new plan, with priority placed on a plan selection at the same metal level and the same product network type (PPO, HMO, POS, EPO). But if those are not available, there’s a heirarchy that would be used to select what amounts to the most similar plan available.
UnitedHealthcare enrollees are advised to seek out their own replacement coverage during open enrollment. For plan selections made between November 1 and December 15, the new plan will be effective January 1, with no gap in coverage. For United enrollees who don’t return to the exchange to pick a new plan, Healthcare.gov’s protocol is to select a plan on their behalf. But given the state’s push-back on this issue, it’s unclear what the outcome would be in Nebraska.
Proposed rates for 2017
The Nebraska Department of Insurance confirmed by phone that three carriers will offer plans in the Nebraska exchange for 2017: Aetna (formerly Coventry), Blue Cross Blue Shield of Nebraska, and Medica.
However, rate filings for Aetna have not been released as of mid-July 2016, despite the fact that rate filings for BCBS of Nebraska and Medica were published in early June. As of mid-July, Healthcare.gov’s rate review page had no details for Aetna, and neither did SERFF (system for electronic rate and form filing). In 2015, Coventry had 32,832 members enrolled across seven different plans, five of which were available in the exchange.
For BCBS of Nebraska and Medica, the proposed rate increases for 2017 are:
- Blue Cross Blue Shield of Nebraska: 34.9 percent
- Medica: 35.09 percent
The Nebraska Department of Insurance has highlighted the fact that the proposed rates have not yet been finalized, and could change during the review process. The final rates will become available by September 3. Open enrollment begins November 1, for coverage effective January 1, 2017.
During the 2016 open enrollment period, enrollments in private plans through Nebraska’s exchange totalled 87,835, including new enrollees and renewals. Total enrollment at the end of the 2015 open enrollment period stood at 74,152.
By March 31, effectuated enrollment for 2016 stood at 80,213 (for comparison, as of June 2015, there were 63,776 people in Nebraska with in-force private coverage through the exchange). Of the effectuated enrollments, nearly 90 percent were receiving subsidies that averaged $296 per month.
As of the end of open enrollment for 2016 coverage, the average pre-subsidy premium in the Nebraska exchange was $400/month. But the average after-subsidy premium was $105/month – just slightly lower than the $106/month average across all 38 states that use Healthcare.gov (these numbers change slightly throughout the year, due to attrition).
2016: new carriers in Nebraska exchange
In 2015, there were three carriers offering individual plans in the Nebraska exchange: Assurant, Blue Cross Blue Shield of Nebraska, and Coventry. Assurant announced in June 2015 that they would exit the individual market nationwide, and their plans are no longer for sale. But two new carriers joined the Nebraska exchange for 2016: UnitedHealthcare of the Midlands, and Medica.
Prior to the start of open enrollment, the Nebraska Department of Insurance published final approved rates for 2016, including premium amounts for 15 different sample scenarios. The approved rate changes for 2016 were:
- Blue Cross Blue Shield of Nebraska: 14.8 percent average rate increase
- Coventry: 21.89 percent average rate increase (but actual rates are still lower than BCBS in every sample scenario).
- UnitedHealthcare of the Midlands: New to the exchange, but the approved rates for 2016 are lower than BCBS and Coventry for every sample scenario (note that United will only participate in the exchange in 2016; they will not offer plans for 2017).
- Medica: New to the exchange. Approved rates for 2016 are lower than BCBS and Coventry in some scenarios, and higher in others.
So although Blue Cross Blue Shield and Coventry both experienced relatively steep rate increases, the addition of UnitedHealthcare and Medica gave consumers other options from which to choose—highlighting the importance of shopping around during open enrollment rather than simply letting an existing plan auto-renew.
The Nebraska Department of Insurance’s premium report is also interesting in terms of being able to see how actual rates – as opposed to percentage rate changes – stack up against each other. In most states, rate changes were typically reported in terms of the percentage increase for each plan.
In the case of Nebraska, if we only saw the fact that Coventry’s rates increased by almost 22 percent versus under 15 percent for BCBS, we might have assumed that Coventry enrollees would be worse off in 2016. But when we see the actual rates side-by-side, it’s clear that Coventry enrollees are still be paying less for their coverage in 2016 (Coventry’s rates decreased from 2014 to 2015, which is also helpful perspective from which to view the 22 percent rate increase for 2016).
And of course, the addition of two new carriers – one of which has the most competitive rates overall – brings an added measure of competition to the Nebraska exchange in 2016.
Subsidies offset some of the rate increase
The Supreme Court upheld the legality of subsidies in every state in a 6 – 3 ruling issued in June 2015. The plaintiffs had argued that subsidies could only be provided in state-run exchanges, and if they had prevailed,56,000 people in Nebraska would have lost their subsidies. Their coverage would most likely have become unaffordable without subsidies, with premium increases that would have averaged 265 percent.
Republican leaders in Nebraska were disappointed with the Court’s ruling, and have continued to push for full repeal of the ACA.
Because the subsidies were upheld, they mitigated some of the 2016 rate increases for existing exchange enrollees (88 percent of exchange enrollees in Nebraska were receiving subsidies in 2015, and that has increased to nearly 90 percent in 2016). But the fact that UnitedHealthcare entered the exchange with lower prices than the two existing carriers meant that the subsidies didn’t have to increase by as much as the rate increases on the 2015 plans in order to keep the second-lowest-cost silver plan within the ACA’s definition of affordable. Again, that highlights the importance of shopping around during open enrollment.
Medicaid expansion under consideration
Although Nebraska has not yet expanded Medicaid, a group of lawmakers began meeting in September 2015 to discuss ways that the state could move ahead with a Medicaid expansion proposal. Republican Senator John McCollister, from Omaha, is leading the coalition of lawmakers, and says his support for Medicaid expansion began to coalesce after two University of Nebraska Kearney professors released a study in April that showed the state would realize one billion in economic benefits if Medicaid were expanded.
McCollister hosted a series of meetings across the state in December 2015, and his proposal to expand Medicaid has support from hospital leadership, including the CEO of Memorial Community Health in Aurora. In January 2015, he introduced LB1032 in an effort to expand Medicaid, although the measure does not have the support of the Nebraska Department of Health and Human Services, as it’s viewed as a very expensive way to expand coverage.
The state legislature has already addressed the issue three times in previous years, and rejected it every time. 2015’s Legislative Bill 472 would have expanded Medicaid to cover the 33,000 Nebraska residents who have fallen into the coverage gap – they aren’t eligible for current Medicaid, but they have incomes too low to qualify for subsidies in the exchange. All told, LB472 would have provided Medicaid coverage to about 54,000 people in the state, including those who earn between 100 percent and 133 percent of the federal poverty level. They currently qualify for subsidies in the exchange, but would qualify for Medicaid instead if the program were expanded.
In 2014, the Nebraska Department of Health and Human Services held a public hearing on LB887, the Wellness in Nebraska Act, and the issue has general support from state residents – 56 percent of poll respondents in Nebraska are in favor of Medicaid expansion. But the bill ultimately died in the legislature, as did the similar LB577 the year before.
Chuck Hassebrook, the Democratic candidate for Governor in the 2014 election said that he’d make Medicaid expansion a priority. Hassebrook noted that the survival of rural hospitals depends on Medicaid expansion. But ultimately, Pete Ricketts, a Republican who is opposed to Medicaid expansion, won the election. Governor Ricketts is opposed to the ACA in general, and prefers ideas like tort reform, tax credits, and expanded health savings accounts (HSAs). He has maintained his opposition to Medicaid expansion, and continues to oppose it despite the work of McCollister and the other lawmakers who are considering a path towards Medicaid expansion.
McCollister introduced LB1032 in January 2016, in an effort to expand Medicaid in Nebraska using a privatized model, much like Arkansas has been using since 2014. But the legislation did not advance out of committee. Supporters of Medicaid expansion have also been considering a ballot initiative to expand Medicaid using the will of the state’s voters.
74,152 people enrolled in private plans through the Nebraska exchange during the 2015 open enrollment period (through February 22, including the week-long extension). 53 percent were new to the exchange for 2015, and 88 percent are receiving premium subsidies.
Attrition is a normal part of the individual health insurance market however. That’s always been the case, but now that the bulk of enrollments are confined to a short window during the winter, attrition is more noticeable during the summer. Some enrollees don’t pay their initial premiums, and others either cancel their coverage or are terminated because of immigration documentation issues (subsidies are also terminated for people who don’t provide the necessary financial documentation, which can lead to enrollees choosing to cancel their coverage). By the end of June, 63,776 had in-force coverage in the Nebraska exchange.
An additional 7,218 people enrolleed in Medicaid or CHIP through the exchange between November 15 and February 22, qualifying under the state’s unchanged guidelines, as Nebraska has not yet expanded Medicaid. Medicaid and CHIP enrollment continue year-round.
Open enrollment for 2015 has ended, although you can still obtain 2015 coverage if you have a qualifying event. The next open enrollment period begins on November for coverage effective January 1, 2016.
CoOportunity was an Iowa-based ACA-created CO-OP that was one of four carriers offering 2015 plans in the Nebraska exchange. But in late December 2014, CoOportunity was taken over by Iowa state regulators, and stopped selling policies in either state. Despite the fact that CoOportunity enrolled 120,000 people in Iowa and Nebraska in 2014 CoOportunity did not receive the ongoing federal funding that many other CO-OPs received last fall. CoOpportunity’s enrollment was far higher than most other CO-OPs around the country in 2014; second only to Health Republic of NY, which is closing at the end of 2015.
Immediately following the take-over, it was unclear whether CoOportunity could be rehabilitated. But ultimately, in late January, regulators determined rehabilitation would not be possible, and the CO-OP would be liquidated. Regulators said that existing claims exceeded CoOportunity’s assets, but the Nebraska state Guaranty Association is there to protect insureds when carriers fail, and the $500,000 per-insured limit is adequate in this case, according to Nebraska’s Insurance Commissioner Bruce Ramge.
CoOportunity still had about 40,000 policy-holders in Nebraska as of late January. Initially, regulators said that people who had enrolled prior to December 15 could keep their CoOportunity plans, but were encouraged to shop for new coverage prior to the end of open enrollment (people who enrolled after December 15 did not have coverage with the CO-OP and had to choose another plan).
Blue Cross Blue Shield of Nebraska reported that their call centers were extremely busy early in 2015, as they were helping thousands of CO-OP members secure new coverage.
But once it was determined that the CO-OP would be liquidated, all of the existing policy-holders needed to begin the process of transitioning to a new carrier. By the end of August, there were only about 300 remaining CoOpportunity members, and their coverage ended at that point (they had access to a 60 day special enrollment period as a result of losing their coverage).
In May 2016, Iowa’s Insurance Commissioner filed a lawsuit against HHS and CMS over how the liquidated funds from CoOpportunity will be divided up. The federal government is maintaining that they have first priority, and that their loans to CoOpportunity should be paid back before any other creditors are reimbursed. Iowa (and possibly Nebraska, although the state’s Insurance Commissioner has not yet joined the lawsuit) contends that the federal government should not be the highest-priority creditor.
2015 rates and carriers
With CoOpportunity’s exit, there were three carriers participating in the Nebraska exchange in 2015: Blue Cross Blue Shield of Nebraska, Coventry Health Care, and Assurant. Health Alliance Midwest offered policies in 2014, but did not participate in 2015. Assurant was new to the Nebraska exchange for 2015, but exited the market nationwide at the end of 2015.
The Nebraska Department of Insurance released a sampling of 2015 rates in September 2014. They illustrated 15 different scenarios, with varying household sizes, ages, and geographic locations across the state. For each carrier, they showed the rate change for each scenario, along with an average for all 15 scenarios from each carrier.
Across the four carriers that were originally slated to sell plans for 2015 (including CoOportunity), the unweighted average for the 15 sample scenarios was a 10.7 percent increase in premiums. But one carrier – Coventry – had an average rate decrease of 3.4 percent. And while Assurant’s average rate hike across the sample scenarios is 16 percent, their prices in 2014 (off-exchange) were lower than those offered by the exchange plans – they gained market share in 2014 even though they were only available off-exchange.
PricewaterhouseCooper LLC analyzed individual market premiums, calculating weighted average rates for the 2015 open enrollment period. They found an average increase of 9 percent across the four Nebraska carriers, including on and off-exchange plans (the study was conducted throughout the late summer/autumn, and rates are current as of late November).
But the Kaiser Family Foundation did another analysis in November 2014, looking at a 40 year old enrollee in the Omaha area, who enrolled in the benchmark plan (second lowest-cost silver plan) in 2014 and was willing to switch plans – if necessary – in order to continue to be covered by the benchmark plan in 2015. For that scenario, they found an average price decrease of 2.6 percent.
But people in the Omaha area who renewed the benchmark plan from 2014 instead of switching to the new benchmark plan may have experienced some sticker shock, and the Omaha area was a perfect example of why auto-renewal is not in your best interest, even if it’s available to you. The NY Times put together an interactive map showing how the benchmark plans changed for 2015, and there was a stark difference between renewing versus switching if you were in northeastern Nebraska.
An analysis conducted by the Commonwealth Fund and published in December 2014 found an average rate increase of 10 percent for a 40 year-old non-smoker in the Nebraska exchange, when looking at all plans and metal levels. But for silver plans, the rate increase was an average of just 4 percent, and it’s likely that the rate increase became smaller once CoOportunity’s plans were no longer for sale, since the CO-OP had raised its rates considerably for 2015.
2014 enrollment numbers
During the first open enrollment period that ended in April, 42,975 people finalized their private plan Obamacare enrollments in the Nebraska exchange (as of April 19). And another 10,360 people had enrolled in ACA-compliant plans off-exchange.
An additional 9,879 exchange applicants had been found to be eligible for existing Medicaid in Nebraska (Nebraska has not expanded Medicaid under the ACA, a decision that disproportionately impacts the large rural population).
HHS is running the exchange in Nebraska via HealthCare.gov. Residents who need enrollment assistance can contact Community Action of Nebraska or HRS/Erase, Inc. (now called Resolute) – both received federal grants – totaling $600,000 – in September 2015 to hire navigators who can answer questions and assist with the enrollment process.
Community Action of Nebraska has a toll free number (1-800-318-2596) that people can use if they want to enroll over the phone. Residents who want in-person help can also visit one of Community Action’s offices to meet with a navigator.
Nebraska’s Department of Insurance allowed pre-2014 plans to be extended in 2014. Following the Obama Administration’s announcement in March that pre-2014 plans could be extended for up to two more years, the Nebraska Department of Insurance decided in late April to allow pre-2014 health insurance plans to be extended out as far as October 2016.
HHS issued another extension in early 2016, allowing grandmothered plans to continue to renew until as late as October 1, 2017, provided they terminate no later than December 31, 2017. Nebraska agreed to allow carriers in the state to go along with that extension as well; it is up to each carrier to decide whether to accept this option.
Exchange history in Nebraska
Despite work completed by the Nebraska Department of Insurance (DOI), Gov. Dave Heineman announced in November 2012 that the state would not operate a health insurance exchange. In rejecting a state-run exchange, Heineman said it would be much more expensive for the state to run its own exchange. He also expressed doubt that even a state-run exchange would give Nebraska much authority over exchange operations.
Governor Heineman has also refused to expand Medicaid, but state Senator Jeremy Nordquist is pushing for Medicaid expansion and called on Heineman to forfeit his own health insurance until all Nebraskans are able to have coverage.
Before Heineman’s final decision, he had expressed some support for a state-run exchange, and the DOI had studied that option. The DOI gathered input from stakeholders, developed a set of working assumptions around policy and operations, and issued a number of requests for information and requests for proposals to engage subcontractors in developing an exchange.
While the federal government manages most functions for the new marketplace, Nebraska oversees participating health plans. The Nebraska legislature also authorized a workgroup, called the Nebraska Exchange Stakeholder Commission, to provide input to state and federal officials on how the marketplace should operate.
In early December, 2014, the Nebraska Exchange Stakeholder Commission announced their recommendation that Nebraska continue to have a federally-run exchange, noting that it would be costly and difficult to switch to a state-run exchange at this point, especially given that federal funding is no longer available to establish a state-run exchange.
Contact the exchange
The federal government operates the exchange in Nebraska
More Nebraska health insurance exchange links
State Exchange Profile: Nebraska
The Henry J. Kaiser Family Foundation overview of Nebraska’s progress toward creating a state health insurance exchange.
Nebraska 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 Nebraska.
(877) 564-7323 / Toll Free: (800) 833-7352
Nebraska DOI’s overview of the exchange
An in-depth document published in September 2013 that details how the exchange will work for individuals and small businesses.
Advocacy group working to raise awareness about the Nebraska exchange.