Highlights and updates
- Open enrollment for 2019 coverage in Nebraska ended on December 15.
- Enrollment is still open for Nebraskans with qualifying events.
- Association health plans are now available for Nebraska farmers with open enrollment periods similar to those for ACA-compliant plans.
- Short-term health plans are available in Nebraska with initial plan terms up to 364 days.
- Average rate increase just 2.2 percent for 2019, but plans are changing from PPOs to EPOs.
- Many enrollees who get premium subsidies saw lower net premium in 2018, and even lower premiums in 2019.
- Enrollment dropped less than half a percent for 2019, after increasing in 2019 (versus significant nationwide declines each year).
- BCBS excited at the end of 2016 and Aetna exited at the end of 2017, leaving Medica as the only insurer in Nebraska’s exchange
Nebraska exchange overview
Nebraska uses the federally facilitated exchange, but with a marketplace plan management model, which means the state oversees various aspects of the plans available for sale in the exchange.
2019 health insurance rates only up about 2 percent, but plans are changing from PPOs to EPOs
- Medica Insure: 3.69 percent increase (possibly revised to a 4.24 percent increase)
- Medica with CHI Health: 2.6 percent decrease (possibly revised to a 1.04 percent decrease). These plans continue to only be available in 23 eastern Nebraska counties.
- Elevate by Medica: New for 2019, so no applicable rate increase
Overall, the average rate increase across all of Medica’s plans is 2.2 percent for 2019.
2019 enrollment down less than half a percent, after growing more than 4 percent in 2018
87,855 people enrolled in 2019 coverage through the Nebraska exchange during open enrollment, which ended December 15, 2018. That was less than half a percent lower than the 88,213 people who enrolled in coverage during the previous open enrollment (for 2018 plans). Nationwide, enrollment was down about 5 percent for 2019, due to a variety of factors: The individual mandate penalty no longer applies after the end of 2018. The Trump Administration has relaxed the rules for short-term health plans and association health plans, making them a viable alternative (for healthy people) to ACA-compliant coverage. And as was the case the year before, the Trump Administration again slashed funding for outreach and enrollment assistance. But enrollment in Nebraska’s exchange only dropped by a few hundred people.
For 2017, enrollment had reached 84,371 people, so enrollment was 4.6 percent higher in 2018 than it had been the year before. For states that rely on HealthCare.gov, this was rare, as most of those states saw enrollment decrease by an average of 5 percent. Of the 34 states with fully federally-run exchanges, only five had higher enrollment in 2018 than they’d had in 2017.
As of February 2018, effectuated enrollment in Nebraska’s exchange stood at 83,255. And as of mid-2018, effectuated enrollment stood at 79,267. Effectuated enrollment is always lower than the number of people who initially sign up, as some enrollees don’t pay for their coverage or terminate it during the year.
Land O’Lakes and Nebraska Farm Bureau are offering association health plans for residents involved in agriculture
In the summer of 2018, the Trump Administration finalized new rules for association health plans, making it easier for self-employed individuals and small groups to join together and obtain health insurance regulated under the ACA’s large group rules. This is still ACA-compliant coverage, but the rules are more lenient for large groups than they are for individual and small group plans (large group plans don’t have to cover the essential health benefits, for example, and aren’t subject to the ACA’s risk adjustment program).
In September 2018, the Nebraska Farm Bureau announced a partnership with Medica to offer an association health plan to Farm Bureau members in the state, at premiums roughly 25 percent below the premiums for ACA-compliant individual market coverage without any subsidies (people who get subsidies pay far less in premiums, but the Farm Bureau plan is marketed to people who don’t get subsidies). The coverage is robust however, and does appear to include all of the ACA’s essential health benefits. There was an open enrollment period from October 1 to December 12 during which people who were already Farm Bureau members as of July 2018 were allowed to sign up for coverage under the association health plan, and 700 Nebraska residents enrolled in Farm Bureau coverage for 2019. Enrollment was limited to existing Farm Bureau members in an effort to limit adverse selection; they didn’t want lots of people with significant medical needs to join Farm Bureau solely to get health insurance and then enroll in the plan.
Land O’Lakes also began offering an association health plan for 2019 to farmers in Nebraska who are actively engaged in business with one of 14 participating CO-OPs. The open enrollment period for Land O’Lakes association health plan coverage began October 29, 2018, and was initially slated to end December 21. But it was extended until December 31 due to high demand and a late harvest that made it challenging for farmers to enroll in coverage during the original enrollment period.
The association health plan approach is not the same thing that Farm Bureau is offering in Iowa and Tennessee. In those states, Farm Bureau plans are medically underwritten, so they’re only available for purchase by people who are fairly healthy. Under the Trump Administration’s new rules for association health plans, the plans cannot use medical underwriting to determine eligibility or premiums, but the Iowa and Tennessee Farm Bureau plans are not association health plans. In Iowa and Tennessee, the Farm Bureau plans are similar to the pre-ACA individual market: Coverage is available year-round, anyone can join the Farm Bureau (even if they’re not involved in agriculture) and apply for coverage, but eligibility for coverage is based on the applicant’s medical history. In Nebraska, it’s different. Residents can only enroll in Farm Bureau or Land O’Lakes coverage if they’re involved in agriculture, enrollment is limited to an annual open enrollment window, and an enrollee’s health status is not taken into consideration.
BCBS and UnitedHealthcare exited at the end of 2016,Aetna exited at the end of 2017; Medica left as the only exchange insurer in 2018 and 2019
Nebraska’s exchange had four insurers offering plans in 2015 and 2016, but was down to just one as of 2018 and that continues to be the case in 2019.
UnitedHealthcare and Blue Cross Blue Shield of Nebraska both exited the exchange at the end of 2016, and as a result, about 35,500 Nebraska exchange enrollees had to pick new plans for 2017 during open enrollment. And at the end of 2017, Aetna exited, leaving Medica as the sole insurer offering plans in the state’s exchange.
At the end of 2016, UnitedHealthcare exited the exchanges (and in general, the individual market altogether) in most of the 34 states where the carrier offered exchange plans in 2016. Nebraska was one of the states where United exited the individual market, both on and off-exchange, at year-end. United continued 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. But their rates were competitive in Nebraska. They offered plans state-wide, and in 65 of the state’s 93 counties, United offered at least one of the two least-expensive silver plans in the exchange.
When Blue Cross Blue Shield of Nebraska announced in September 2016 that they would not offer plans in the exchange in 2017 (they continued to sell two plans — bronze and catastrophic — outside the exchange for 2017), they noted that they had lost $140 million on exchange plans since 2014, and viewed continued participation in the exchange as unsustainable. Their roughly 20,000 enrollees with ACA-compliant coverage had to switch to a new plan for 2017.
Then in June 2017, BCBSN announced that they would entirely exit the ACA-compliant individual market at the end of 2017. The exit meant that their bronze and catastrophic off-exchange plans terminated at the end of 2017, and roughly 12,500 people had to enroll in new plans for 2018. BCBSN indicated that in order to have continued to offer off-exchange ACA-compliant plans in 2018, they would have had to increase premiums by 50 percent, which would have likely resulted in healthy people dropping coverage while sick people remained on the plans, further increasing overall losses.
For 2017, Aetna and Medica offered plans in the Nebraska exchange. But Aetna announced in May 2017 that they would not offer on- or off-exchange plans in Nebraska in 2018. In February 2017, Aetna’s CEO, Mark Bertolini, had said that the ACA exchanges were in a “death spiral.” Aetna only offered plans in four state exchanges in 2017, including Nebraska. Bertolini also said that Aetna was the only insurer in the Nebraska exchange in 2017, but Medica also offered plans, and grew their membership significantly in the state in 2017.
Medica offers plans statewide in Nebraska, and has opened an office in Omaha. Their 2017 enrollment in Nebraska increased five-fold over their 2016 enrollment. In 2016, there were 6,276 Medica members in Nebraska. By February 2017, more than 35,500 Nebraska residents had made their initial premium payments for 2017 Medica plans (mostly through the exchange, but that total included off-exchange enrollments as well). Enrollment in the individual market tends to peak early in the year, but Medica’s rate filing later in 2017 indicated that they had 35,269 members.
Medica indicated in February 2017 that they were committed to remaining in Nebraska’s individual market, regardless of the future of the ACA and HealthCare.gov. But there was considerable uncertainty among insurers in the spring of 2017, as the Trump Administration waffled on whether or not they would continue to pay cost-sharing reductions to insurers, and on how strongly the ACA’s individual mandate would be enforced going forward.
Ultimately, Medica did remain in the exchange, statewide, for 2018. And their membership grew significantly in 2018, as they were the only insurer offering plans in the exchange. In addition, anyone with 2018 off-exchange ACA-compliant individual market coverage in Nebraska also had Medica coverage, as the other insurers had left the market (the bulk of Medica’s membership is on-exchange, however, as the insurer is not actively marketing off-exchange plans). As noted above, Medica has partnered with the Nebraska Farm Bureau to offer association health plan coverage to farmers in Nebraska for 2019, in addition to continuing to offer plans in the exchange.
If you get premium subsidies, you might have seen a rate reduction in 2018, and even more of a rate decrease for 2019
Because the cost of CSR has been added to silver plan premiums starting in 2018, premium subsidies are much larger than they would otherwise have been. Consider a family of four, living in North Platte (parents are 45, and the kids are 15 and 13, and we’ll keep them the same each for each year in order to compare apples to apples and avoid the inevitable premium increases that happen just because we each get older every year).
If they earned $97,000 in 2018, they qualified for a premium subsidy of $2,130 per month. After that subsidy was applied, they could get a bronze plan for as little as $141/month (if they wanted a silver plan in 2018, it would have cost $773/month, and if they wanted a gold plan, it was $1,099/month, after the subsidy was applied).
For 2019, Medica has adjusted their pricing to result in even better bargains for people who get premium subsidies (an insurer can do this if they’re the only one offering plans in a particular area, since they know they’ll have the benchmark plan, and will thus know exactly how much all of their plans differ in price from the benchmark plan’s price). If our hypothetical family in North Platte is earning $97,000 in 2019, they qualify for a premium subsidy of $2,389/month. They can select from two bronze plans that are entirely free after the subsidy is applied. Or they can get a gold plan for $303/month. There’s only one silver plan available, so it’s the benchmark, and it would be $778/month after the subsidy (note that this is very similar to the cost of the silver plan in 2018; the benchmark rate stays fairly constant from one year to the next, after subsidies are applied, for people with fairly consistent income).
But in 2017, a family in that same situation would have qualified for a premium subsidy of just $1,322 per month (substantially lower than the 2018 and 2019 subsidy amounts), and the cheapest bronze plan available to them would have been $479/month in after-subsidy premiums (a silver plan would have been at least $748/month — similar to 2018 and 2019 costs, because again, premium subsidies are designed to keep the cost of silver plans fairly consistent from one year to the next — and there were simply no gold plans available in their area (69101 zip code) for 2017).
In December 2017, Senator Ben Sasse (R, Nebraska) tweeted “Have heard from multiple farmers today about panic in their counties about health insurance premium increases for 2018.”
To be clear, premiums for people who don’t qualify for premium subsidies are substantial. If the family in North Platte earned more than $98,400 in 2018, their least-expensive option was a bronze plan that cost $2,282/month in premiums (keep in mind that the $98,400 is after any contributions to employer-sponsored or self-employment retirement plans, and after any contributions to an HSA, since the least-expensive bronze plan is HSA qualified and would allow this family to set aside up to $6,900 in an HSA, lowering their adjusted gross income by that amount). For 2019, if that family earns more than $100,400 (again, after deductions that will lower their ACA-specific MAGI), their lowest-cost option is $2,314/month.
But there are a few points that need to be made about Sasse’s tweet:
- The median income for farm families in the US was under $78,000 in 2017 (the income comes from their non-farm sources, since median net farm-related income is slightly negative).
- An income of $78,000 will result in premium subsidies for families with three or more members. As noted above, the subsidies are became much more substantial starting in 2018. If our family in North Platte was earning $78,000 in 2018, their premium subsidy would have been $2,282 per month, and they could have obtained a bronze plan for free after the subsidy was applied. With a $78,000 income for 2019, they would qualify for a subsidy of $2,545/month and would have access to three free bronze plans and a gold plan that costs just $145/month for the whole family.
- If the family is eligible for employer-sponsored coverage due to one or both spouses having another job in addition to the farm, they can use that coverage instead of buying individual market coverage. But they may be in a situation where it’s only affordable for the employee, and not for the whole family. That’s known as the family glitch. Former Minnesota Senator Al Franken introduced legislation in 2014 to fix the family glitch, but it did not have enough support to pass.
- HHS noted in 2016 that premiums are about 7 percent lower, on average, in states that have expanded Medicaid versus states that have not. Nebraska has not expanded Medicaid. This means hospitals face more uncompensated care costs in Nebraska than they would if Medicaid had been expanded, and it also means that the private plans in the exchange are covering people with incomes as low as the poverty level. If the state had expanded Medicaid, the private plans in the exchange would be covering people with incomes of 139 percent of the poverty level and above, since people with income below that level would be eligible for Medicaid instead. Lower incomes correlate with poorer health, so the overall risk pool for private plans in Nebraska would be expected to be healthier (and thus, lower-cost) if Medicaid were expanded. Sasse is a federal lawmaker, so the decision to not expand Medicaid was not his (that rests with governors and state lawmakers). But Sasse has been openly critical of the coverage gains made in other states as a result of Medicaid expansion, perhaps not understanding that it’s a key component of keeping private plan premiums in check?
- As noted above, the average premium increase in Nebraska was slated to be 16.9 percent for 2018, and that would have been the case if federal lawmakers — including Sasse — had allocated CSR funding. But they didn’t, and the result was an average rate increase of 31 percent in Nebraska. Granted, that’s also what has resulted in such oversize premium subsidies in 2018 and 2019, and unsubsidized consumers can avoid the CSR load on premiums by selecting a non-silver plan. But it’s somewhat ironic that the primary factor that drove rate increases for 2018 is something that federal lawmakers could have addressed at any time during early-mid 2017. The rate increases that resulted from the lack of CSR funding were not a surprise — insurers made it very clear in their rate filings that the impact on rates would be substantial if CSR funding were not allocated, but Republican lawmakers preferred to spend much of 2017 focusing on ACA repeal efforts, rather than taking action to stabilize the individual health insurance market.
Medica revised their average rate increase for 2018 to 31 percent, based on assumption that CSR funding would end
Medica had 35,269 members on their ACA-compliant individual market plans in 2017. But all of the Aetna enrollees, as well as off-exchange BCBSNE enrollees, had to switch to Medica plans at the end of 2017, as Medica became the only insurer offering plans in Nebraska’s individual market starting in 2018.
Medica offered their “Medica Insure” plan in all 93 counties in Nebraska for 2018. They also offered their “Medica Insure Gold” in 70 counties, and “Medica with CHI Health” in the remaining 23 counties (Buffalo, Burt, Butler, Cass, Colfax, Cuming, Dodge, Douglas, Fillmore, Hall, Johnson, Lancaster, Nance, Nemaha, Nuckolls, Otoe, Pawnee, Saline, Sarpy, Saunders, Seward, Thayer, and Washington). Medica with CHI Health is a new partnership between Medica and the nonprofit CHI Health system. Medica’s rate filing noted that while their plans would be available on and off-exchange for 2018, they were not actively marketing off-exchange plans.
Medica proposed a 31 percent average rate increase (as of their revised rate filing dated August 15, 2017, which was based on the assumption that cost-sharing reduction (CSR) funding would not continue in 2018). The additional cost to cover CSR was added to silver plans. This turned out to be a prescient decision, as the Trump Administration announced in October 2017 that CSR funding would end immediately. In states where rates had been finalized without the cost of CSR added to premiums, insurers and regulators had to scramble to add the cost of CSR to premiums at that point, but Medica (along with insurers in most other states) had already accounted for that eventuality with their revised rate filing.
Medica had previously proposed a 16.9 percent average rate increase, based on the assumption that CSR funding would continue. But with no allocation of funding from Congress, and no assurance from the Trump Administration that funding would actually continue, revised rates were filed in August. Medica initially added a 14.5 percent load to silver plans, bringing the total overall average rate increase to 28.3 percent (as of August 4). But they submitted an additional revised filing on August 15, which also incorporated updated claims experience through the end of July. The result of that additional information, plus the 14.5 percent load on silver plans to cover the cost of CSR, brought Medica’s overall proposed average rate increase to 31 percent.
56 percent of Nebraska exchange enrollees received CSR in 2017, and it’s important to understand that CSR benefits have continued to be available to eligible enrollees in 2018 and 2019, regardless of the fact that the federal government is no longer paying insurers to provide those benefits. As of mid-2018, 47 percent of the people in Nebraska with effectuated exchange enrollment were receiving CSR benefits.
Since insurers still have to provide CSR benefits, the cost has to be added to premiums. Loading the cost onto silver plan premiums (which is the approach that Medica has taken) protects most enrollees from having to pay the additional cost. Premium subsidies — which offset premiums for 96 percent of Nebraska exchange enrollees — are based on keeping the cost of the second-lowest-cost silver plan at an affordable level. So when the cost to cover CSR is added to silver plans, the result is larger premium subsidies. Those subsidies can be applied to bronze or silver plans, making them an even better deal, or they can be applied to silver plans, where they will offset the rate increase. People with silver plans who don’t get premium subsidies, however (including anyone who shops off-exchange) might be better off switching to a bronze or gold plan, as those plans don’t have the additional cost of CSR baked into their premiums.
The CSR issue stems from the fact that the ACA provides for CSR, but didn’t allocate funding for it; rather than allocate funding to fix the issue, House Republicans sued the Obama Administration in 2014, and ultimately won their case in 2016. The Obama Administration appealed, and the ruling was stayed throughout most of 2017, with federal funding continuing to flow to insurers. But that is no longer the case, as of October 2017.
84,371 people enrolled in private plans through the Nebraska exchange during the 2017 open enrollment period. The year before, 87,835 people enrolled, so 2017 enrollment represented a drop of almost 4 percent. Across all the states that use HealthCare.gov, there was an enrollment drop of about 4.7 percent, likely due to the uncertainty surrounding the ACA under President Trump, and the Trump Administration’s move to scale back HealthCare.gov marketing and outreach during the final week of open enrollment.
Average rate changes for 2017
Initially, it looked like three insurers would participate inNebraska’s exchange in 2017, and the Nebraska Department of Insurance confirmed by phone in August 2016 that three carriers had filed plans to be sold on the Nebraska exchange for 2017: Aetna (formerly Coventry), Blue Cross Blue Shield of Nebraska, and Medica.
In light of Aetna’s announcement that they would exit nearly all of the exchanges where they participated in 2016, Nebraska officials confirmed that the carrier was still planning to sell coverage in the Nebraska exchange for 2017 (there are four states where Aetna remained in the exchange in 2017, and Nebraska was one of them).
Nebraska Insurance Director Bruce Ramge noted, however, that nothing was final until the carriers signed their agreements with HHS in late September 2016, and said “hopefully we won’t see any other dropouts.” But in late September, Blue Cross Blue Shield of Nebraska announced that they would not offer plans in the exchange in 2017 after all, due to mounting losses.
Despite the fact that rate filings for BCBS of Nebraska and Medica were published in early June, Healthcare.gov’s rate review did not include any 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 the two carriers offering coverage in the Nebraska exchange, average rate increases for 2017 were as follows:
- Medica: 51.3 percent
- Aetna: 40.5 percent (a sample of approved rate increases for various ages and zip codes)
For Blue Cross Blue Shield of Nebraska, regulators approved an average rate 42.3 percent. But BCBSN subsequently pulled out of their exchange, so their rates were no longer applicable for 2017.
Nearly 90 percent of Nebraska exchange enrollees were receiving premium subsidies in 2016, and subsidies grew for 2017 to keep pace with the increase in the cost of the second-lowest-cost silver plan in each area. HHS announced in October that the average benchmark (second-lowest-cost plan) premium in Nebraska would be 51 percent higher in 2017, so the subsidy increases were substantial.
But for people who aren’t eligible for subsidies (including everyone who buys coverage outside the exchange), there’s no getting around the fact that rates were sharply higher in 2017 than they were in 2016.
Nebraska resisted Healthcare.gov re-enrollment, but it proceeded as planned
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 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, 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).
BCBSN and 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 had BCBSN or UnitedHealthcare in 2016 — and who did not return to the exchange by December 15 to select a new plan for 2017 — were 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 were not available, there’s a hierarchy that would be used to select what amounts to the most similar plan available.
BCBSN and UnitedHealthcare enrollees were advised to seek out their own replacement coverage during open enrollment. For plan selections made between November 1 and December 15, the new plan took effect January 1, with no gap in coverage. For BCBSN and United enrollees who didn’t return to the exchange to pick a new plan, Healthcare.gov’s protocol was to select a plan on their behalf. And despite the state’s push-back on this issue, automatic re-enrollment was the default for Nebraska exchange enrollees whose plans ended and who didn’t return to the exchange to pick their own plans.
During the 2016 open enrollment period, enrollments in private plans through Nebraska’s exchange totaled 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.
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 enrolled 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 additional extensions in early 2016, 2017, and 2018, allowing these “grandmothered” plans to continue to renew until as late as October 1, 2019, provided they terminate no later than December 31, 2019. 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 work group, 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 2012 that details how the exchange will work for individuals and small businesses.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.