New York marketplace highlights and updates
- Open enrollment for 2020 health plans in New York ended January 31, 2020. but a COVID-19 enrollment window for uninsured residents is underway and continues through July 15, 2020.
- Proposed rates for 2021: Overall proposed average increase of 11.9% (several insurers added a rating factor to account for COVID-19).
- New York is a leader in terms of consumer protections in health care
- Inflation-adjusted premiums were still considerably lower as of 2019 than they had been before 2014.
- More than 272k enrolled in QHPs for 2019, and 797k in the Essential Plan (plus a look at enrollment in previous years)
- New York insurers implemented an average rate increase of 6.8% for 2020 (plus a look at rate changes in previous years).
- New York’s exchange is one of the country’s more robust, with 12 insurers offering plans (coverage varies by area).
- The Essential Plan: an ACA-created BHP covering more than 796,000 people.
- NY sued feds (and won) over reduction in federal funding for the Essential Plan, but a proposed change in funding calculation will result in lower federal funding in 2020.
- Pregnancy has been a qualifying event in New York since 2016.
New York exchange overview
New York has fully embraced the Affordable Care Act, with a state-run exchange, expanded Medicaid, and a Basic Health Program. The state-run exchange is called New York State of Health. It is one of the most robust exchanges in the country, with 12 carriers offering individual market plans for 2020 (plan availability varies considerably from one county to another, and some of those 12 insurers market plans under more than one name).
There are also 15 insurers offering Essential Plan coverage (this is New York’s Basic Health Program — details below; availability varies from one county to another), and 10 insurers offering small business plans through NY State of Health’s SHOP exchange (plan availability varies from one county to another; some insurers market plans under more than one name).
COVID-19 enrollment window for uninsured residents extended through July 15, 2020
As they have done in previous years, New York State of Health extended open enrollment for 2020 health plans; it ran through January 31, 2020. Since that window ended, qualifying events have been necessary in order to enroll in a plan for 2020 or make changes to existing coverage.
But to address the COVID-19 pandemic, New York is allowing anyone who doesn’t have health insurance to enroll in a plan through NY State of Health or directly through an insurer. This enrollment window has been extended again, through July 15, 2020. People who have qualifying events can always enroll in a health plan (in most cases, this includes both on-exchange and off-exchange enrollments). But until July 15, uninsured residents in NY can sign up for health insurance even if they don’t have a qualifying event.
Proposed rates for 2021 coverage: 11.9% average rate increase; several insurers’ filings include a rating factor to address anticipated COVID-19 costs
In early June 2020, New York’s Department of Financial Services posted insurers’ rate filings for 2021 coverage, which amount to a weighted average rate increase of 11.7 percent (by our calculations, it’s 11.87 percent). The following average rate changes have been proposed by insurers that offer coverage through New York State of Health, many of which include an adjustment based on expected costs related to COVID-19:
- Capital District Physicians’ Health Plan (CDPHP): a 4.3 percent increase CDPHP has 7,249 enrollees. Filing notes that increased costs related to COVID-19 in 2021 are expected to be offset by the reduced costs being experienced in 2020 (due to reduced demand for elective services).
- Emblem (Health Insurance Plan of Greater New York): 9.5 percent increase. Emblem has 16,297 members. Filing notes that 2 percentage points of the proposed increase is associated with the anticipated costs of a COVID-19 vaccine.
- Health Plus HP (Empire): 16.6 percent increase. Health Plus has 15,582 members. Filing notes that 5.1 percentage points of the proposed increase is associated with the anticipated costs of a COVID-19 vaccine.
- Excellus Health Plan: 1.5 percent increase. Excellus has 25,167 members. Filing notes that 0.5 percentage points of the proposed increase is related to COVID-19
- Fidelis (New York Quality Health Care Corp. — owned by Centene as of July 2018): 18.8 percent increase. Fidelis has 118,338 members. Filing includes an 8.4 percent increase related to COVID-19.
- Healthfirst PHSP: 2.4 percent increase. Healthfirst PHSP has 39,980 members. Filing does not include an adjustment related to COVID-19.
- HealthNow New York (BCBS of Western NY and Blue Shield of Northeastern NY): 1.9 percent decrease. HealthNow has 9,680 members. Filing specifically notes that HealthNow is not increasing premiums to account for costs related to COVID-19.
- Independent Health Benefits Corporation: 3.7 percent decrease. IHBC has 4,754 members. Filing does not include an adjustment based on COVID-19.
- Metro Plus Health Plan: 9.6 percent increase. Metro Plus has 13,943 members. Filing notes that claims are expected to increase by 2.1 percent due to COVID-19.
- MVP Health Plan: 6.7 percent increase. MVP has 34,897 members. Filing notes that 1.6 percentage points of the proposed rate increase are due to COVID-19, including the cost of a vaccine and pent-up demand for elective services that will be provided in 2021.
- Oscar: 19.1 percent increase. Oscar has 33,536 members. Filing notes that 7.4 percentage points of the proposed rate increase are associated with the COVID-19 pandemic, including expected costs for pent-up demand for elective services, vaccine and antibody testing, and the migration of people from employer-sponsored plans to individual market plans.
- UnitedHealthcare of New York: 13.8 percent increase. United has 8,351 members. Filing notes that 1 percentage point of the proposed rate increase is associated with COVID-19.
As they do each year, state insurance regulators will review the proposed rates for actuarial soundness and announce approved rate changes later in the summer. In past years, the Department of Financial Services has consistently approved smaller rate increases than the insurers initially proposed.
A culture of consumer protections and health care reform
Over the years, New York has implemented various regulations to enhance consumer protections, including
- A higher actuarial value requirement than the federal government imposes. [And as of 2019, New York requires silver plans to have an actuarial value that can only vary between 70 percent and 72 percent (not counting cost-sharing reduction variations of silver plans). Under federal rules, silver plans can have an actuarial value between 66 and 72 percent, but New York is no longer allowing a negative de minimis variation for silver plans.]
- Allowing a special enrollment period for pregnant women,
- Requiring insurers to remain in the exchange in order to keep their Medicaid/Essential Plan/Child Health Plus contracts,
- Requiring contraceptive, abortion, and essential health benefits coverage on state-regulated plans (and as of 2020, state-regulated large group plans must cover IVF),
- Insurers that offer plans through New York State of Health must offer one standard plan design in each metal level in every county where the insurer offers plans. [Here are the standard plan designs for 2020] Carriers are also allowed to offer up to three non-standard plan designs in each metal level.
- Not allowing grandmothered/transitional plans or short-term plans,
- Surprise balance billing protections,
- Extending the definition of “small group” to groups with up to 100 employees (small group plans are more heavily regulated under the ACA than large group plans)
- Not allowing premiums in the small group and individual market to vary based on age or tobacco use.
- Starting in 2018, broker commissions on all individual and small-group plans in New York had to be capped at no more than 4 percent of premiums. This was already the case for HMOs in New York, but New York also notified insurers that broker commissions above 4 percent for individual and small group plans would be deemed unreasonable (New York has confirmed that this rule is still applicable for 2020 coverage).
New York’s Assembly has passed several bills over the years that would create a single-payer system in the state, but none of the bills have survived in the Senate. The 2019/2020 legislation is A.5248 and S.3577, although neither has advanced out of committee this year.
Pre-subsidy premiums still lower in 2019 than they were in 2013
Premiums in New York’s exchange in 2019 were still considerably lower (after adjusting for inflation, but before applying any tax credits) than they were prior to 2014, when the bulk of the ACA was implemented (New York regulators consistently indicate that the rates remain 55 percent lower, but it’s probably more like 40 percent lower by now, given that rates have been steadily increasing in the years since 2014, after dropping substantially that year). In most states, unsubsidized premiums are significantly higher now than they were prior to 2014, but that’s not the case in New York.
That’s because in 1992, New York began requiring individual-market insurers to accept all applicants, cover pre-existing conditions, and charge the same premiums regardless of an applicants age. But the state did not have a mandate requiring people to have health insurance, so premiums rose significantly.
The ACA included an individual mandate as well as premium subsidies to keep coverage affordable for middle-class enrollees, and the result has been much lower premiums in New York since 2014. The mandate penalty was eliminated after the end of 2018, but New York regulators prevented insurers from raising their premiums in 2019 to compensate for the loss of the individual mandate penalty.
Although coverage is less expensive in New York than it was prior to 2014, there are still people — mainly those who earn only slightly too much to be eligible for subsidies in the exchange — who struggle to afford health insurance. Two bills were introduced in the 2019 legislative session (A.1443, with an effective date of January 2019, and A.5203, which is identical except for a January 2020 effective date) that would have provided a tax credit to offset some of the cost of health insurance, but neither bill advanced during the 2019 session. Similar legislation (A.1184) was considered in 2017 but didn’t advance.
2020 enrollment in New York’s exchange — plus a look at historical enrollment since 2014
By the time open enrollment for 2020 coverage ended, NY State of Health reported that 272,948 people had enrolled in qualified health plans (QHPs; ie, private health plans for people who don’t qualify for Medicaid, Child Health Plan, or the Essential Plan). This was the highest enrollment had been since 2015, before the Essential Plan debuted. (As of 2016, people with income up to 200 percent of the poverty level became eligible for the Essential Plan instead of premium subsidies to offset the cost of QHPs. As expected, enrollment in QHPs dropped sharply as of 2016.)
An additional 796,998 people enrolled in the Essential Plan in New York for 2020.
As of early 2020, nearly 3.4 million people were enrolled in Medicaid via New York State of Health, as well as more than 450,000 enrolled in Child Health Plus (enrollment in the Essential Plan, Medicaid, and Child Health Plus continue year-round; they are not limited to open enrollment windows).
For perspective, here’s a look at QHP enrollment in New York State of Health since 2014:
- 2014: 370,451 people enrolled in QHPs
- 2015: 408,841 people enrolled in QHPs
- 2016: 271,964 people enrolled in QHPs [enrollment dropped because New York’s Essential Plan (Basic Health Program) debuted for 2016, and people who had previously been receiving premium subsidies for QHPs became eligible for the Essential Plan instead. By the end of the open enrollment period for 2016, there were 379,559 people enrolled in the Essential Plan.]
- 2017: 242,880 people enrolled (plus 665,324 people enrolled in The Essential Plan)
- 2018: 253,102 people enrolled in QHPs (plus 738,851 people enrolled in The Essential Plan)
- 2019: 271,873 people enrolled in QHPs (plus 790,152 people enrolled in The Essential Plan)
- 2020: 272,948 people enrolled in QHPs (plus 796,998 people enrolled in The Essential Plan)
In New York, the individual market grew by 89 percent in 2014 – the fourth-highest percentage growth increase in the country. Nationwide, individual market growth was 46 percent (the extreme growth in NY’s individual market was largely due to the fact that coverage became much more affordable in the state — even for people who didn’t qualify for premium subsidies — which was not the case in most states; New York already had guaranteed-issue coverage pre-ACA, whereas most states transitioned from medical underwriting to guaranteed-issue as of 2014).
Approved 2020 rate changes — plus a look at rate changes over time in NY’s exchange
In May 2019, the New York Department of Financial Services published proposed rate changes that insurers had submitted for 2020 health plans. More details on each insurer’s rate filings are available here. Across all plans in the individual market, the average proposed increase was 8.4 percent (NY regulators later indicated that the proposed average rate increase, after insurers revised some of their filings, was 9.2 percent).
But regulators spent several weeks reviewing the rates, and as in past years, the overall average approved rate increase was smaller than the insurers proposed.
The following average rate changes were approved for insurers in New York’s individual market for 2020 (most are a little lower than the insurer proposed, although some rates were approved as filed):
- Capital District Physicians’ Health Plan (CDPHP): a 6.5 percent increase CDPHP has 1.8 percent of the market share.
- Emblem (Health Insurance Plan of Greater New York): 13.5 percent increase. Emblem has 6 percent of the market share.
- Health Plus HP (Empire): no change in rates (0 percent). Health Plus has 6.8 percent of the market share.
- Excellus Health Plan: 6.3 percent increase. Excellus has 8.4 percent of the market share.
- Fidelis (New York Quality Health Care Corp. — owned by Centene as of July 2018): 3.9 percent increase [Note that while Fidelis previously did not directly cover abortion, sterilization, or contraceptives, that has changed now that Centene has acquired Fidelis’ assets. Previously, the state had created a workaround, but it was often complicated. And it’s no longer needed, as Fidelis now covers those services directly.] Fidelis has 32.1 percent of the market share.
- Healthfirst PHSP: 6.4 percent increase. Healthfirst PHSP has 11.4 percent of the market share.
- HealthNow New York (BCBS of Western NY and Blue Shield of Northeastern NY): 8.6 percent increase. HealthNow has 2.9 percent of the market share.
- Independent Health Benefits Corporation: 1.7 percent increase. IHBC has 1.4 percent of market share.
- Metro Plus Health Plan: 7.6 percent increase. Metro Plus has 4.2 percent of the market share.
- MVP Health Plan: 6.8 percent increase. MVP has 9.6 percent of the market share.
- Oscar: 14 percent increase. Oscar has 12.8 percent of the market share.
- UnitedHealthcare of New York: 15 percent increase. United has 2.5 percent of the market share.
Outside the exchange, HealthFirst Insurance Company offers off-exchange-only plans. An average rate increase of 9.8 percent has been approved for their plans for 2020. HealthFirst Ins. Co. has just 149 enrollees in 2019.
Crystal Run Health Plans, which had only been offering coverage outside the exchange in New York, is winding down its health plans and does not plan to offer coverage for 2020. UnitedHealthcare Insurance Company of New York, which only offers plans outside the exchange had had just 52 enrollees in 2019, had proposed an average rate increase of 29 percent for 2020, but their filing was not included among the approved rates for 2020.
For perspective, here’s a look back at rate changes for NY State of Health plans since 2014:
2014: ACA-compliant plans debuted in 2014. And although premiums in most states increased as insurers switched from medically underwritten to guaranteed issue coverage, that was not the case in New York. Premiums were already high in New York, as the state had required guaranteed issue coverage for more than two decades. So premiums in New York in 2014 were lower than they had been the year before (thanks to the ACA’s individual mandate, which New York didn’t have in previous years).
2015: Rates for 2015 were approved in New York in early September 2014. In the individual market (both on and off-exchange), the average approved rate increase was just 5.7 percent – a significant decrease from the 12.5 percent that carriers had originally filed with the state. This chart shows each carrier by market share, and hovering over a carrier’s segment of the chart allows you to see their approved rate increase for 2015.
2016: In the individual market, carriers had requested an average rate increase of 10.4 percent for 2016, but regulators knocked that down to 7.1 percent — and some insurers reduced their average prices for 2016. Health Republic initially had the highest approved rate increase (14 percent), but their plans terminated at the end of November 2015 (details below). Since all of Health Republic’s individual enrollees had to switch to other carriers during open enrollment, the final weighted average rate increase ended up being less than the 7.1 percent that regulators had initially stated.
2017: The weighted average rate increase for the individual market in New York was 16.6 percent for 2017. Nationwide, the average pre-subsidy premium increase was about 25 percent for 2017, so although NY had a double-digit average increase, premiums in the state were more stable than they were in other states.
2018: NYDFS approved an average rate increase of 13.9 percent for 2018 individual market plans, which was a little lower than the 17.7 percent average increase insurers had proposed.
NY Upstate reported on May 15 that insurers in New York would be requesting “double-digit rate hikes because of continued increases in health care costs and uncertainty related to federal discussions surrounding repealing and replacing the Affordable Care Act.”
In their summary of rate filings for 2018, NYDFS included this:
“to prepare for potential changes to the Affordable Care Act, DFS requested that insurers provide estimates as to how the impact of a potential repeal of the individual mandate and the loss of Cost Share Reduction (CSR) funding would affect rates. Of those that provided numerical estimates, on average, insurers estimated that a full repeal of the federal individual mandate would increase rates by an additional 32.6% and the loss of CSR funding would increase rates an additional 1.3%.“
The elimination of CSR funding had less of an impact in New York than it would in most other states (for example, Pennsylvania regulators estimated that loss of CSR funding would increase premiums by more than 20 percent). That’s because of New York’s Essential Plan, which covers people with income up to 200 percent of the poverty level. CSR is available to people with income up to 250 percent of the poverty level, but its impact is much smaller when incomes are above 200 percent of the poverty level. In most states, people with income up to 200 percent of the poverty level are eligible for substantial CSR benefits, but that’s not the case in New York, since those residents are instead eligible for the Essential Plan.
2019: The average approved rate increase for 2019 was 8.6 percent. But that was quite a bit lower than insurers had proposed (regulators have approved lower-than-proposed average rates every year since ACA-compliant coverage debuted). A recurring theme in each insurer’s filing was the fact that the impending elimination of the individual mandate penalty (after the end of 2018) was a major factor in the proposed rate increases. After reviewing the proposed rates, DFS noted that the average proposed rate increase was 24 percent, but it would only have been 12.1 percent if the federal government hadn’t repealed the individual mandate penalty.
It’s worth noting that in the 90s, New York implemented guaranteed-issue and community rating, but did not impose any sort of mandate. The predictable result of that was skyrocketing premiums and dwindling insurer participation in New York’s individual market. But New York’s pre-2014 market also didn’t have limited enrollment periods or premium subsidies for middle-class enrollees, and those factors will help to stabilize the individual market and prevent the sort of death spiral that it experienced in the pre-ACA years. But the loss of the individual mandate penalty was by far the single biggest factor in the higher rates that New York insurers were proposing for 2019.
Maria Vullo, DFS Superintendent, previously explained in an op-ed that the actions the Trump Administration and GOP lawmakers have taken (elimination of the individual mandate in 2019, the elimination of cost-sharing reduction funding, and the shorter open enrollment period) were resulting in higher health insurance premiums in the individual market. But Vullo clarified that DFS would “be particularly focused on making sure that insurers do not use the chaos and fear-mongering from Washington over the last 18 months as a cover for excessive increases.”
And sure enough, when the approved rate increases for 2019 were announced in August 2018, they were dramatically smaller than insurers had proposed. Financial Services Superintendent Maria T. Vullo explained:
“DFS will not allow the federal government’s wrongful repeal of the individual mandate penalty to become a self-fulfilling prophecy to make health insurance unaffordable in New York. DFS has carefully examined the rates requested by health insurers and scrutinized every factor from an actuarial and market standpoint to ensure that the Trump Administration’s many efforts to sabotage affordable and comprehensive healthcare coverage do not allow insurers to unfairly profit at the expense of consumers.”
For 2018, 2019, and 2020, New York has instructed insurers to add the cost of cost-sharing reductions (CSR) to the premiums for all individual market silver plans, since the federal government is no longer funding CSR.
Insurer participation in NY State of Health
New York has had a robust exchange from the start, with multiple insurers offering plans in most areas of the state. For 2020, there are 12 insurers that participate in the exchange, which is the same as the 2019 participation (some of them offer plans under multiple names, which is why the charts show more than 12 insurers).
- insurer participation by county in 2015
- insurer participation by county in 2016
- insurer participation by county in 2017
- insurer participation by county in 2018
- insurer participation by county in 2019
- insurer participation by county in 2020
For the most part, insurer participation has been fairly stable in New York’s exchange. But there have been a few changes over the years:
- WellCare exited the individual QHP market at the end of 2016 (but continued to offer the Essential Plan coverage). Their enrollee count in exchange QHPs was only about 1,000 members in 2016.
- American Progressive Life and Health Insurance Company of NY didn’t offer policies for 2015 after gaining a very small market share in 2014.
- WellCare joined the exchange in 2015 but only offered plans for two years. They stopped offering exchange plans at the end of 2016.
- Health Republic closed in late 2015, so their policies were not available for 2016 or later years (more details below).
- For 2016, Health Republic was no longer available.
- Affinity Health Plan, which had 6,353 enrollees in 2017, exited the individual health insurance market in New York at the end of 2017. They did not offer 2018 coverage on or off-exchange.
- CareConnect, operated by Northwell Health, New York’s largest hospital system, announced in August 2017 that they would shut down Care Connect Insurance Company over the coming year. The insurer stopped offering coverage at the end of 2017. Their 31,266 members in the individual market had to select new coverage for 2018. CareConnect also had 79,337 members in the small group market; those plans were allowed to remain in force until their renewal date in 2018.
In September 2017, Centene announced plans to acquire Fidelis Care’s assets. (Technically the transaction was “an asset purchase, rather than an outright acquisition” in order to comply with New York regulations regarding the purchase of nonprofit organizations.) Centene did not previously participate in New York’s market, but the acquisition of Fidelis Care gave the company major foothold there, given Fidelis Care’s market share.
Centene agreed to pay $3.75 billion to purchase Fidelis Care’s assets, but the state believed that the majority of that money should go to the state, since Fidelis Care’s primary business is Medicaid managed care. A deal was reached in March 2018 that allows the state to receive $2 billion from the sale, with the money earmarked for a healthcare charitable trust to benefit New Yorkers and improve health care in the state. In April 2018, the New York Department of Health and the New York Department of Financial Services both granted approval for the acquisition, and the details were finalized by the end of 2018.
The Essential Plan Debuted in 2016. By 2020, enrollment exceeded 796,000
In April 2015, New York State of Health announced that they would introduce a Basic Health Program (BHP) in 2016 dubbed the “Essential Plan.” Enrollment in the Essential Plan began on November 1, 2015 for coverage effective January 1, 2016. BHPs are an option available to all states under the ACA, but thus far, only New York and Minnesota have elected to establish BHPs.
In New York, the BHP is available from a variety of private carriers, has no deductible, and has no premium for enrollees with incomes up to 150 percent of the federal poverty level. Enrollees with incomes between 150 and 200 percent of the federal poverty level pay just $20 per month in premiums, an amount that has remained unchanged since the program debuted in 2016. Prior to 2016, enrollees with incomes between 138 percent and 200 percent of poverty were eligible for premium subsidies and cost-sharing subsidies, but switching to the BHP has resulted in lower premiums and lower cost-sharing for many of them.
About 40 percent of NY State of Health’s private plan enrollees in 2015 had incomes below 200 percent of the poverty level. They became eligible instead for the Essential Plan in 2016, which is a more affordable option than the coverage they had in 2015. By January 31, 2016 enrollment in the Essential Plan had reached nearly 380,000 people. Essential Plan enrollment continues year-round, and by November 2016, enrollment had grown to 565,000 people. By early 2019, there were 790,152 people enrolled in the Essential Plan, and by early 2020, enrollment had grown to 796,998.
CSR funding and its impact on the Essential Plan
BHPs receive federal funding equal to 95 percent of the amount that the federal government would otherwise have spent on premium subsidies and cost-sharing reductions (CSR) in the state, if the BHP hadn’t been available to consumers. In October 2017, the federal government eliminated funding for CSR, nationwide. Insurers still have to provide CSR benefits to eligible enrollees, but instead of getting federal funds to cover the cost, insurers have instead added the cost to premiums (generally just to silver plan premiums) in nearly every state.
In New York and Minnesota, however, insurers didn’t have to add as much to their premiums to cover the cost of CSR, because very few people receive CSR benefits in those states, and the CSR benefits that are provided are very small. That’s because nearly everyone who would have been eligible for CSR in those states is eligible for BHP coverage instead. You can see how this devolves into circular logic…
In December 2017, the federal government informed New York and Minnesota that their BHP funding would be reduced by the amount that of the funding that had been attributable to CSR. In January 2018, the states sued the federal government, alleging that HHS “withheld legally required funding” for the Essential Plan and MinnesotaCare. The states had argued that if they didn’t have BHPs, their insurers would have added much larger premium increases to silver plans, which would have in turn resulted in more BHP funding due to the larger premium subsidies on which the BHP funding calculation would have been based. New York was facing a $1 billion shortfall in their budget due to the reduction in BHP funding (for Minnesota, it was about a $120 million shortfall, as MinnesotaCare has far fewer enrollees than NY’s Essential Plan). David Anderson, a research associate at Duke University Margolis Center, explained more about the case here.
Fortunately for New York and Minnesota, the judge ruled in May 2018 that HHS had to pay up. The ruling called for $169 million to be paid to New York and Minnesota for the second quarter of 2018 (of that, $152 million goes to New York, and $17 million goes to Minnesota), and for HHS to work together with the states to sort out a payment formula going forward.
In August 2018, HHS published a new methodology for calculating BHP payments for New York and Minnesota. It involves adding a “premium adjustment factor” of 18.8 percent, based on the estimation that premiums in NY and MN would have been 18.8 percent higher to account for the loss of CSR funding if the states didn’t have BHPs. Under the new methodology, New York received another $422 million in funding for the Essential Plan for 2018.
But HHS then proposed another adjustment for 2019 and 2020 BHP funding, which was expected to result in MN and NY losing a combined total of $300 million in BHP funding over the course of the two years. The new methodology kept the 18.8 percent premium adjustment factor, but it also takes into account the fact that an increasing number of people (in states that don’t have BHPs) with income under 200 percent of the poverty level are selecting bronze plans instead of silver plans, due to the low-cost or free bronze plans that have resulted from silver loading (the final rule only accounts for this in the 2020 plan year, but not for 2019). Premium tax credits can be used to offset the cost of any metal-level plan, but the tax credits are never larger than the cost of the plan the person is buying. So if a person qualifies for a $500 premium tax credit and then purchases a bronze plan that would only cost $470 without the tax credit, HHS only has to pay $470, instead of $500. The increasing number of people buying bronze plans — some of which are less expensive than the premium tax credit the person would otherwise receive — has resulted in a proposed change to the BHP payment methodology that will ultimately reduce the amount that NY and MN receive for their BHPs.
Pregnancy now a qualifying event
In June 2015, the New York state Assembly and Senate unanimously passed S. 5972. And on December 22, 2015, Governor Cuomo signed the legislation into law. The legislation makes pregnancy a qualifying event through the state-run exchange, New York State of Health, and took effect in January 2016. New York was the first state in the nation where the commencement of pregnancy allows a woman to enroll in a plan through the exchange, although Connecticut implemented a similar provision starting in 2019. The New York law allows a pregnant woman to enroll with an effective date of the first of the month in which her pregnancy is confirmed by a licensed healthcare provider.
Under federal ACA rules, a baby’s birth triggers a qualifying event, but pregnancy does not. Advocates have pushed for the inclusion of pregnancy in the list of qualifying events at a federal level, but although HHS considered that possibility, they noted in February 2015 that they had opted not to include pregnancy as a qualifying event.
SEP for victims of domestic violence or spousal abandonment
As of April 15, 2016, victims of domestic violence or spousal abandonment, along with their dependents, are eligible for a special enrollment period during which they can obtain coverage through NY State of Health. If they’re eligible for the Essential Plan, Child Health Plus, or Medicaid, enrollment is available year-round anyway; but if not, they have an opportunity to purchase a QHP outside of open enrollment.
Carriers cannot impose a time limit on when the domestic violence or spousal abandonment occurred, nor can they “require any additional proof of eligibility or apply overly burdensome requirements on applicants seeking to use the special enrollment period.”
This is consistent with the regulations HHS established that allow victims of domestic violence or spousal abandonment to enroll in a plan through the exchange outside of open enrollment.
NY’s CO-OP plans terminated November 30, 2015
On September 25, regulators announced that Health Republic of New York, an ACA-created CO-OP, would cease sales and begin winding down its operations. The CO-OP was the fourth CO-OP nationwide to succumb to the challenging market conditions under which they began their operations (by early November, 12 CO-OPs had failed).
Health Republic of NY had about 87,000 effectuated individual enrollments – roughly 20 percent of the individual market in the state. They also had about 79,000 members in the small group market. Initially, state regulators said that existing members could keep their plans until December 31. But on October 30, just two days prior to the start of open enrollment, the NY Department of Financial Services (NYDFS) and NY State of Health announced that the financial situation at Health Republic of NY is worse than had previously been reported. As a result, existing policies were terminated at the end of November, and enrollees had to secure new coverage for December, in addition to selecting coverage for 2016.
Enrollees who didn’t pick a new plan for December were automatically enrolled in a replacement plan that provided the closest level of benefits to the Health Republic plan the member had in 2015 (there was also an option to opt out of this). NY State of Health announced that Fidelis, Excellus, and MVP had agreed to accept auto-renewals of Health Republic members who hadn’t selected a new plan by the third week of November. The members were assigned to one of the three replacement carriers based on their county of residence. The three carriers had also agreed to credit Health Republic members for any out-of-pocket costs incurred during the first 11 months of the year.
Health Republic was priced far lower than most other carriers offering plans through NY State of Health in 2015. A navigator in Rochester explained that “Health Republic came in at the lowest price in each of the medal (sic) levels, almost by half. It is going to be a challenge for (consumers) to pick a new plan in an insurance program that is going to be more expensive.” But those low premiums were ultimately the cause of the carrier’s demise; premiums simply weren’t high enough to cover claims.
NY State of Health History
New York launched its consumer-facing website for its health insurance marketplace, NY State of Mind, on Aug. 20, 2013. The website included FAQs, an interactive map showing which health plans were available by county, and a calculator to help consumers learn if they are eligible for tax credits and how much they would pay for health insurance.
NY State of Health was working well early in October 2013, at a time when HealthCare.gov and many of the state-run exchanges were still struggling. And just before the second open enrollment began, the New York State Health Association released the results of a survey that found 92 percent of the 2014 NY State of Health enrollees were satisfied with their coverage, and three-quarters of the exchange’s enrollees would recommend NY State of Health to other people.
Gov. Cuomo established New York’s marketplace, or health insurance exchange, through an executive order. Cuomo issued the order in April 2012 after New York’s legislature failed to approve an exchange law in both the 2011 and 2012 sessions.
Cuomo cited numerous reasons in his executive order for starting an exchange. According to the governor’s office, state and local governments were paying more than $600 million every year to cover the health care costs of uninsured individuals. Uninsured individuals, the order read, “frequently forego preventive care and other needed treatment, putting them at risk of being sicker throughout their lives and dying sooner than those who have health insurance, which diverts funds from other public uses …”
New York enacted some ACA-style reforms in the individual market in the early 1990s; policies there have been guaranteed issue and community rated ever since. But there was no individual mandate, premium subsidy, or restriction on when people could enroll, and few insurers participated in the pre-ACA individual market in New York. So premiums in New York were far higher than in other states where medical underwriting was utilized.
The new provisions in the ACA — including the individual mandate, premium subsidies, and limited enrollment windows — have increased the number of carriers offering policies in New York, and inflation-adjusted premiums continue to be considerably lower than they were prior to 2014. So individual insurance is far more affordable in New York than it used to be, and consumers have many more options for coverage.
Contact the New York exchange
NY State of Health
More New York health insurance exchange links
State Exchange Profile: New York
The Henry J. Kaiser Family Foundation overview of New York’s progress toward creating a state health insurance exchange.
Health Care For All New York (HCFANY)
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.