New York marketplace highlights and updates
- Open enrollment for 2019 plans extended through January 31, 2019
- Regulators approved 8.6% average rate increase for 2019 (as opposed to 24% that insurers proposed)
- HALF of the proposed 2019 rate increase was due to elimination of individual mandate penalty
- Premiums still nearly 50% lower than they were before 2014
- QHP enrollment up 4.2% in 2018. Essential Plan enrollment up 11%.
- Fidelis Care still dominates the market; state has approved acquisition by Centene
- The Essential Plan: an ACA-created BHP covering more than 738,000 people
- NY sued feds (and won) over reduction in federal funding for the Essential Plan.
- 13.9 percent average approved rate increase for 2018.
- Pregnancy is a qualifying event in New York
- State regulations protect coverage & help to keep insurers in the exchange
- Affinity Health Plan exited individual market at the end of 2017.
- CareConnect no longer offering individual market plans; shutting down in 2018.
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 2018 (plan availability varies considerably from one county to another, but all 12 carriers will continue to offer plans in 2019). There are also 15 insurers offering Essential Plan coverage (this is New York’s Basic Health Program — details below), and five insurers offering small business plans through NY State of Health’s SHOP exchange.
New York is one of several states where the exchange offers standardized plan designs. 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 2019). Carriers are also allowed to offer up to three non-standard plan designs in each metal level.
New York has implemented various regulations to enhance consumer protections, including 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, and requiring contraceptive, abortion, and essential health benefits coverage on state-regulated plans.
New York also requires insurers to spend at least 82 percent of premiums (for individual and small group coverage) on medical costs, which is more stringent than the federal requirement of 80 percent.
And starting in 2018, broker commissions on all individual and small group plans in New York must be capped at no more than 4 percent of premiums. This was already the case for HMOs in New York, but a May 2017 notice to insurers indicated that rate filings for 2018 that included broker commissions above 4 percent would be deemed unreasonable (broker commissions nationwide are much lower than they were prior to 2011, when the ACA’s medical loss ratio rules took effect; in some areas, like Connecticut, for example, broker commissions were no longer paid for any plans in 2017, leading to fewer brokers being willing or able to serve the individual market; Connecticut began requiring broker commissions starting in 2018, however).
Premiums in New York’s exchange in 2018 are nearly 50 percent lower than they were prior to 2014, when the bulk of the ACA was implemented. 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 is being eliminated after the end of 2018, but New York regulators have prevented insurers from raising their premiums to compensate for the loss of the individual mandate penalty.
SHOP exchange open to businesses with up to 100 employees
As of January 2016, the NY State of Health SHOP exchange for small businesses is open to employers with up to 100 employees. Prior to 2016, only businesses with up to 50 employees could use the SHOP exchange.
New York is one of just four states where businesses with 51 – 100 employees purchase plans in the small group market (in the other states, businesses that size buy coverage in the large group market, which is not subject to as many ACA regulations as the small group market). Although that was originally intended to be the case in every state as of January 2016, Congress reversed course in late 2015 with the PACE Act (HR1624), which kept the definition of “small group” at businesses with a maximum of 50 employees. But New York had passed its own law in 2013 to align the definition of small group with what was called for in the ACA, calling for the definition change in 2016. And the PACE Act had no impact on New York’s law, so businesses with up to 100 employees can use NY State of Health’s SHOP exchange.
While that’s beneficial for some groups, and helps to further stabilize the small group market, it also means that businesses with 51 – 100 employees are no longer allowed to buy large group coverage, and some businesses are unhappy with the rule change. The switch didn’t impact the employer mandate; businesses with 50 or more employees are required to provide coverage to their employees or face a penalty – that applies regardless of whether they’re in a state that classifies them as small groups or large groups.
Open enrollment for 2019 plans extended through January 31, 2019
In October 2018, New York State of Health announced that open enrollment for 2019 plans would run from November 1, 2018 to January 31, 2019. This is the same schedule the exchange used for 2018 coverage, and the extension announcement was not unexpected. New York State of Health’s “fast facts” guide to open enrollment, which was updated in September, noted that open enrollment is “usually” November through January.
There are 12 state-run health insurance exchanges that have their own enrollment platform and thus have the opportunity to extend open enrollment. Seven of them, including New York’s exchange, have opted for an extended open enrollment period for 2019 plans, while the other five have opted to follow HealthCare.gov’s open enrollment schedule (November 1 to December 15).
Average proposed rate increase for 2019 was 24% (would have been 12% without mandate penalty repeal), but regulators approved an average rate hike of just 8.6%
Open enrollment for 2019 coverage will begin November 1, 2018, and will continue in New York until January 31, 2019. New York is one of seven state-run exchanges that have opted to extend open enrollment for 2019 plans.
Rate filings for plans that will be offered in 2019 through New York State of Health had to be submitted to the New York Department of Financial Services (DFS) by May 14, 2018. DFS reviewed the rates over the summer, and announced approved rates in early August.
In early June, DFS publicized the proposed rate changes that insurers had submitted. More details on each insurer’s proposed rate increases are available here (select the company, and then look in the “approved applications” tab for plans with effective dates of January 2019). A recurring theme in each insurer’s filing was the fact that the elimination of the individual mandate penalty 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 (the penalty repeal will take effect after the end of 2018, under the terms of the GOP tax bill that was enacted in late 2017).
New York has been down this road before. In the 90s, the state 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. In fact, individual market premiums in New York in 2018, even after several years of rate increases since 2014, are still nearly 50 percent lower than they were prior to 2014. New York didn’t have limited enrollment periods or premium subsidies for middle-class enrollees pre-ACA, 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 is 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) are 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 were announced in early August, they were dramatically smaller than insurers had proposed. Instead of the 24 percent average increase insurers had proposed, DFS approved an average increase of just 8.6 percent. 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.”
Each year since 2014, NYDFS has approved average rates that are lower than insurers have proposed (overall; in some cases, a specific insurer’s final rate has been higher than proposed). The approved average rate changes for 2019 are as follows:
- Capital District Physicians’ Health Plan (CDPHP): a 1.9 percent decrease (CHPHP had proposed a 5.1 percent increase). CDPHP has 1.7 percent of the market share.Emblem (Health Insurance Plan of Greater New York): 17 percent (proposed rate increase was 31.5 percent). Emblem has 8.4 percent of the market share.
- Empire HealthChoice HMO: 0 percent (ie, no average rate change, as opposed to the 24 percent average rate increase Empire proposed). Empire has 7.9 percent of the market share.
- Excellus Health Plan: 4.6 percent (original proposed rate increase was 8.9 percent, but Excellus revised it to 5.1 percent). Excellus has 8.2 percent of thee market share.
- Fidelis Care New York (owned by Centene as of July 2018): 13.7 percent (Fidelis had proposed a 38.6 percent rate increase) Note that Fidelis does not cover abortion, sterilization, or contraceptives; the state has created a workaround, but it can be complicated). Fidelis has 30.4 percent of the market share.
- Healthfirst PHSP: 9.5 percent (Healthfirst had proposed a 15 percent increase). Healthfirst has 8.8 percent of the market share.
- HealthNow New York (BCBS of Western NY and Blue Shield of Northeastern NY): a 3.2 percent decrease (approved as filed). HealthNow has 2.2 percent of the exchange market share.
- Independent Health Benefits Corporation: 0.6 percent (IHBC had originally proposed a 21.3 percent increase, but later revised it to 30.8 percent). IHBC has 1.5 percent of exchange market share.
- Metro Plus Health Plan: 13.5 percent (approved as filed). Metro Plus has 4.3 percent of the market share.
- MVP Health Plan: 1.9 percent (MVP had proposed a 6.5 percent increase). MVP has 9 percent of the market share.
- Oscar: 11 percent (Oscar had proposed an 25.2 percent increase). Oscar has 15.4 percent of exchange market share.
- UnitedHealthcare of New York: 1.5 percent (United had proposed a 23.6 percent increase). United has 2.1 percent of the market share.
Two insurers filed off-exchange-only plans, and the following rate increases were approved for them:
- Crystal Run: 10.7 percent (Crystal Run had proposed a 15.7 percent increase)
- HealthFirst Insurance Company: 8.8 percent (HealthFirst Ins. Company had proposed a 15 percent increase).
NYDFS also announced that the Essential Plan, which covers 740,000 New York residents, would continue to have premiums of $20/month or less.
In a new rule for 2019, New York is requiring 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 (for 2018, New York allowed silver plan actuarial value to range from 68 to 72 percent).
Small group rate proposals were also reviewd by NYDFS. But in a reflection of the greater stability of the small group market, the proposed average rate increase for small group plans was only 7.5 percent. Regulators reduced the size of small group rate increases too, ultimately approving an average increase of just 3.8 percent.
2018 QHP enrollment: 4.2% higher than 2017’s enrollment
Open enrollment for 2018 coverage was originally scheduled to run for three months, from November 1, 2017, through January 31, 2018. But in April 2017, HHS announced a shorter open enrollment schedule of November 1, 2017, through December 15, 2017. (Note that this shorter schedule was already set to take effect in the fall of 2018; the Trump Administration just moved up the process so that it took effect a year earlier).
But state-run exchanges that have their own enrollment platform had some flexibility in terms of the open enrollment schedule for 2018 coverage, and all but two of them announced extensions in order to have open enrollment continue past December 15.
New York State of Health announced in September 2017 that open enrollment would follow the originally scheduled dates of November 1, 2017 through January 31, 2018. New York is one of only three state-run exchanges (in addition to California and the District of Columbia) that opted to continue open enrollment until the end of January.
By the end of open enrollment, New York State of Health reported than 1.36 million people had enrolled in non-Medicaid plans through the exchange:
- 253,102 people had enrolled in a qualified health plan (QHP). 59 percent of these enrollees were receiving premium subsidies, and the other 41 percent were paying full price.
- 738,851 people had enrolled in the Essential Plan (New York’s Basic Health Program — BHP — for people with income between 139 — 200 percent of the poverty level.
- 374,577 had enrolled in Child Health Plus (New York’s version of the federal Children’s Health Insurance Program; NY’s plan predates federal CHIP, but has received federal CHIP funding since 1997).
In addition, nearly 3 million people had enrolled in Medicaid through New York State of Health.
At the end of open enrollment the year before, enrollment in qualified health plans stood at 242,880. So New York’s QHP enrollment for 2018 was 4.2 percent higher than it had been in 2017. Across states that use HealthCare.gov, average enrollment declined from 2017 to 2018. But enrollment grew slightly in states that run their own exchanges.
For 2017, enrollment in the Essential Plan was a little over 665,000, so Essential Plan enrollment also grew significantly for 2018, with about 11 percent more people signing up.
Enrollment in the Essential Plan, Medicaid, and Child Health Plus continue year-round, although open enrollment in qualified health plans ended January 31, 2018. People who experience certain qualifying events can enroll outside of open enrollment.
2018 market share: Fidelis Care continues to have the highest enrollment
In March 2018, New York State of Health published data showing the market share of each insurer in the exchange, as well as each insurer offering Essential Plan coverage.
As was the case in 2017, Fidelis Care continues to have the largest chunk of the market share for qualified health plans, at 41 percent (up from 32 percent in 2017). The second-largest market share belongs to Healthfirst, as 13 percent. Oscar and Emblem Health both have 8 percent of the QHP enrollments in 2018. Another 11 insurers each have 6 percent or less.
For the Essential Plan, Fidelis Care and Healthfirst also dominate the market, although their respective market shares (22 percent and 20 percent) are much closer than in the QHP market, where Fidelis Care leads by a wide margin
In September 2017, Centene announced plans to acquire Fidelis Care’s assets. (Technically the transaction is “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 would give 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.
The Essential Plan: Enrollment exceeds 738,000 for 2018
In April 2015, New York State of Health announced that they would introduce a Basic Health Program (BHP) for 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 at 200 percent of the federal poverty level paid 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 January 31, 2017, it had reached 665,324.
And by the end of January 2018, enrollment had grown to 738,851.
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’s 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 calls 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.
Affinity Health Plan exited New York’s individual market at the end of 2017
Affinity Health Plan, which had 6,353 enrollees in 2017, announced in August 2017 that they would exit the individual health insurance market in New York at the end of 2017. They did not offer 2018 coverage on or off-exchange.
Affinity had filed plans to participate in the exchange, and had proposed a 23.7 percent average rate increase. But Affinity was not on the final rate change list that New York regulators published in mid-August; their filing had been withdrawn by that point. Affinity is continuing to offer Child Health Plus, Medicaid managed care coverage, and Essential Plan coverage in 2018. But Affinity’s qualified health plan (QHP) enrollees need to pick a different plan during open enrollment. In the exchange, Affinity had 3 percent of the private plan market share.
In June, New York announced new regulations (details below) that would ban insurers from participating in the Essential Plan, Medicaid, and Child Health Plus if they pull out of the QHP market. But this regulation does not apply in Affinity’s case, because it was essentially the state’s decision — rather than the insurer’s decision — that Affinity QHPs wouldn’t be available in 2018.
The New York State Department of Health explained: “Federal regulations require that state-based marketplaces ensure that insurers are in good standing in order to be offered on the Marketplace. This determination includes whether the insurer meets state reserve requirements. Affinity’s reserves had fallen below state requirements. Reserve requirements are based on total premium collected by the health plans. Not certifying Affinity to offer Qualified Health Plans in 2018 will help strengthen their financial position.”
CareConnect not offering plans for 2018; risk-adjustment blamed for financial woes
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. CareConnect noted that while remaining in the market under current regulatory conditions appeared financially unsustainable, they “would have been profitable in 2017 if it were not for the $112 million it had to pay into the Affordable Care Act’s (ACA) risk-adjustment pool – amounting to about 44 percent of CareConnect’s 2016 revenue from its small-group health plan.”
CareConnect had filed a 29.65 percent average rate increase for 2018, but the New York Department of Financial Services (NYDFS) approved an average rate increase of 23.5 percent. CareConnect had 31,266 members in the individual market in 2017 (including 5 percent of the private plan market share in the exchange) and 79,337 members in the small group market.
CareConnect noted in a letter to members that “your health plan will not be affected this year and any policies that are written for 2018 will also remain in effect.” A representative for CareConnect confirmed on September 13 that they had not yet received approval from NYDFS for their wind-down plans, so at that point, they were still planning to offer coverage during the upcoming open enrollment period.
But by late September, the NY State Department of Health had confirmed that CareConnect and Affinity members would need to select new plans during open enrollment, as those plans would not be offered for 2018. In a press release, Care Connect explained that individual market plans would not be renewed or offered to new members for 2018, and they stopped selling and renewing small group plans as of November 2017. However, small group plans that had already been sold or renewed by that point can remain in force until the end of their plan year in 2018.
New York takes action to protect essential health benefits, community rating, and access to exchange plans
In early 2017, as the Trump Administration took over, New York Governor Andrew Cuomo announced that the state would continue to require contraceptive coverage on state-regulated plans, regardless of federal rules (details below).
And in June, Cuomo went further, directing the NY Department of Financial Services to issue regulations that would require New York plans to continue to cover the ACA’s essential health benefits and prevent insurers from discriminating against applicants with pre-existing conditions. It’s notable that New York already had community rating (ie, protection against discrimination based on medical history) long before the ACA.
Under Cuomo’s orders, New York also stepped up their safeguard to ensure that New York State of Health remains a robust exchange with numerous participating insurers. If insurers choose to stop offering QHPs (private plans) in the exchange, the new regulations will prevent them from participating in any of the other programs that are linked with the exchange, including Medicaid, Child Health Plus, and the Essential Plan (New York’s Basic Health Program; details below). These programs tend to be more profitable than QHPs, so this is an incentive for insurers to continue to offer QHPs in the exchange.
New York already has one of the most robust exchanges in the country, but the new regulations will help to protect that status. At the end of 2016, Wellcare stopped offering QHPs in New York State of Health, but continued to offer the Essential Plan. Under the new regulations, similar moves from other insurers will not be permitted in the future, starting with the 2018 coverage year. However, New York’s current Medicaid managed care contracts run through February 2019, and it’s unclear if insurers would contest the new rules being applicable to 2019 exchange participation.
And as noted above, Affinity’s departure from the QHP market didn’t impact their ability to participate in the Medicaid, Child Health Plus, or Essential Plan markets because it was the state’s decision to not certify Affinity for the QHP market, in an effort to keep the insurer financially viable
Governor Cuomo takes action to protect contraceptive and abortion coverage
Governor Cuomo also announced state regulatory action in January 2017 that protects ongoing access to contraceptive coverage with no cost-sharing, and coverage for medically-necessary abortions with no cost-sharing (with exceptions for religious groups). The regulations (here and here) were published in the state register on February 8, 2017, and a public comment period ran through March 27, 2017. They took effect on April 8, 2017 (60 days after their publication in the state register).
The state regulation will still be in place even if the ACA is repealed (which no longer seems likely, but could still happen if Republicans retain their Congressional majority after the 2018 midterm elections), but it only applies to health plans that are regulated by the state, which includes the individual market, and fully-insured group plans. But self-insured group plans are regulated by the federal government under ERISA. The ACA requires contraceptive coverage with no cost-sharing on all non-grandfathered (and non-grandmothered) plans, including self-insured plans (the ACA does not, however, require abortion coverage). But New York’s state-based regulations would only apply to plans that are regulated by the state; self-insured plans would not have to comply.
Within days of Cuomo’s announcement of the pending regulatory action, insurers were calling it an “unprecedented use of regulatory authority” and expressed their belief that legislation would be a more suitable channel for such changes. Earlier in January, NY’s then-Attorney General, Eric Schneiderman, introduced S.3668, the Comprehensive Contraception Coverage Act of 2017. The legislation would have codified via legislation many of the same benefits called for in Cuomo’s regulatory action, but it did not move out of committee during the 2017 legislative session, which adjourned in June.
In somewhat related news, in February 2017, a NY Department of Financial Services undercover sting found that 11 out of 15 insurers were providing incorrect or misleading information to enrollees regarding coverage of contraceptives. NYDFS was working to ensure that the insurers took corrective action.
2018 approved rate increase: 13.9 percent
Rate filings for 2018 coverage were due in New York by May 15, 2017 , and can be found on the NY Department of Financial Services (NYDFS) rate application portal. Final approved rates were announced in August, and are available on the NYDFS website.
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,” according to the NY Health Plan Association (note that average rate increases in NY were double-digit for 2017, but overall rates are still considerably lower than they were in 2013; details below).
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 would have less of an impact in New York than it would in most other states (for example, Pennsylvania regulators have estimated that loss of CSR funding would increase premiums by more than 20 percent). That’s because New York has implemented the Essential Plan, which covers people with income up to 200 percent of the poverty level (more details below). 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.
NYDFS has 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. As always, these average rate increases applied to full-price rates, and was fully or partially offset by larger premium subsidies for subsidy-eligible enrollees.
Premium subsidies are based on keeping the cost of the second-lowest-cost silver plan (the benchmark plan) at an affordable level. And for 2018, the IRS lowered the percentage of income that subsidy-eligible enrollees have to pay for the benchmark plan, meaning that after-subsidy premiums decreased slightly for 2018 (consumers in some cases will have to switch plans to continue to have the best value available).
However, only 55 percent of New York State of Health’s private plan enrollees were receiving premium subsidies in 2017 (as opposed to 84 percent nationwide). The other 45 percent are not insulated from the increasing premiums for 2018, although they may find that they can get a better value by switching to a different plan during open enrollment. And in 2018, subsidized enrollment grew to 60 percent of total enrollments.
Open enrollment for 2017 coverage began on November 1, 2016, and continued until the end of January. On February 1, New York State of Health published an enrollment report, noting that January 31, 2017 was the busiest day they had ever had. Total enrollment through the exchange (including Medicaid, the Essential Plan, Child Health Plus, and private plans) reached more than 3.6 million by January 31, an increase of 800,000 over the enrollment total at the end of last year’s open enrollment period. By January 31, 2017, enrollment totals through NY State of Health were as follows:
- 242,880 people had enrolled in private health plans (QHPs; more than 60 percent are receiving premium subsidies)
- 665,324 people had enrolled in the Essential Plan (details below)
- 299,214 people had enrolled in Child Health Plus
- 2,427,375 people had enrolled in Medicaid
That total is an increase of 200,000 people since December 24, when NY State of Health reported that more than 3.4 million people had enrolled.
On January 4, Governor Cuomo reported that more than 2.7 million people in New York would lose coverage if the ACA is repealed and not replaced with something equally robust. That tally is likely even higher now, given the surge in enrollments in January.
NYC Mayor Bill de Blasio was pushing for an additional 50,000 sign-ups for 2017, noting that the city’s hospital system will be in better financial shape with more insured patients, and that the more people who are enrolled, the harder it will be for lawmakers to strip away coverage. City workers in NYC were going door to door in December and January in an effort to reach people who weren’t aware of their eligibility for coverage in New York under the ACA (this may have played a role in the surging enrollment volume that NY State of Health experienced in January).
NY Assembly passes single-payer bill for the 4th time, but Senate didn’t vote on it
New York expanded Medicaid under the ACA, implemented a state-run exchange, and is one of only two states that have implemented a Basic Health Program (BHP) under the ACA (the Essential Plan, details below). This puts New York ahead of almost all other states in implementing the ACA and healthcare reform. But advocates for single-payer healthcare have been hard at work in the state for the last few years, pushing for more comprehensive reform to cover everyone.
New York lawmaker Richard Gottfried (D-Manhattan) has been working for years on a plan for single-payer health care in the state, co-sponsoring – with Senator Bill Perkins – legislation that would create a universal coverage program known as “New York Health” and hosting a series of public hearings on the proposed plan.
Gottfried and Perkins introduced their bill four years ago, in March 2013 (although Gottfried has been introducing similar bills since the 90s), and 83 other lawmakers signed on to co-sponsor it. Gottfried initially said the switch to single-payer would save $20 billion a year, but a new study in March 2015 found that the annual savings under a single payer plan would actually reach $45 billion, and would result in savings for 98 percent of NY residents.
In May 2015, the New York state Assembly voted 89-47 in favor of Gottfried’s New York Health Act, but the Republican-controlled Senate did not take up the measure. The same thing happened in 2016, with the single-payer proposal passing the Assembly but failing to gain any traction in the Senate. So while the successful votes were certainly a victory for universal health care, they have been symbolic victories thus far.
But in light of the Trump Administration and Republican-controlled Congress pushing to repeal and replace the ACA, Gottfried introduced his New York Health Care Act (A.4738) again in February 2017. In mid-May, it passed the Assembly by a wide margin (93-46), and was sent to the Senate, where it did not move out of committee.
In the Senate, Gustavo Rivera (D, 33rd Senate District) introduced similar legislation (S.4840) in early March, but it did not advance out of committee either. In addition to Rivera, 29 other senators have co-sponsored the legislation (including all eight members of the Independent Democratic Conference), but 32 are needed for a majority. A special election in May added another Democratic senator, Brian Benjamin, who supported S.4840, but that was still one vote short of passage.
Gottfried has pointed out that the GOP proposal to allow plans to be sold across state lines essentially boils down to eliminating states’ rights to regulate their own market, and that a state like NY (which has strict consumer protection laws in place) would be flooded with sub-par plans originating in states with much more lax regulations. Gottfried explains that the result would be much lower-quality coverage for people in New York, and that his New York Health Act would provide much better coverage.
Vermont was on a path to single-payer health care, but pulled the plug in late 2014 amid cost and taxation concerns. Colorado had an initiative on the ballot in 2016 that would have created a universal healthcare system in the state, but it was soundly defeated by voters. Creating a single-payer system as a single state is admittedly a challenging proposition, but New York’s much larger population might make it more feasible than it is in smaller states.
At the federal level, Senator Bernie Sanders (I, Vermont) introduced single-payer legislation in September 2017, which has garnered support from several high-profile members of the Democratic Party. It would be virtually impossible for such a bill to pass while Republicans hold the majority in Congress and President Trump is in the White House, but supporters are hoping that the push towards single-payer will gain momentum in the coming years.
Coverage still much less expensive than it was in 2013
New York was one of just five states that required coverage to be guaranteed-issue prior to the ACA. As a result, premiums skyrocketed in the two decades prior to ACA implementation.
Now that coverage is guaranteed-issue nationwide under the ACA, other states are seeing premiums that continue to rise above where they were in 2013, when coverage was still medically underwritten. But New York officials report that 2017 coverage is still 55 percent less expensive (adjusted for inflation, and before any subsidies are applied) than it was in 2013, and the market is much more robust than it was pre-ACA in terms of carrier participation.
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. Four lawmakers (three Republicans and one Democrat) in the NY Assembly introduced A.1184 in January 2017, in an effort to provide a tax credit to offset the cost of coverage. The bill, which was still in committee as of early February, would provide a non-refundable state tax credit for the amount paid in premiums, up to $2,400 per family (the cap would be $800 each for the tax filer and spouse, and up to $400 per child, with the $2,400 cap applying to the whole family).
2017 rates and carriers
The weighted average rate increase for the individual market in New York was 16.6 percent for 2017, but more than half of the exchange’s private plan enrollees are receiving premium subsidies, which offset a portion of the rate hike. 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 are more stable than they are in other states.
New York State of Health—noted that the plans available in 2017 are “largely the same” as the plans available through the exchange in 2016 (this chart from NY State of Health shows which carriers have plans available in each county in 2016, and this one shows 2017 coverage).
WellCare exited the individual QHP market at the end of 2016, but is continuing to offer the Essential Plan (details below) in New York. Their enrollee count in exchange QHPs was only about 1,000 members in 2016.
In May 2016, the New York Department of Financial Services published a list of the proposed rate changes for all of the state’s individual and small group carriers, including both on and off-exchange plans. In the individual market, the initial proposed weighted average rate increase was 17.3 percent, and in the small group market, it was 12 percent. These rate filings were later revised by the carriers, and final rate approval was published by the NYDFS in early August.
For plans sold through New York State of Health, the following average rate increases were approved for 2017:
- Affinity Health Plan: 22.4 percent (initial rate increase request was 20.7 percent, revised to 24.8 percent)
- Capital District Physicians’ Health Plan: 13.9 percent (initial rate increase request was 11.2 percent, revised to 13.1 percent)
- Empire HealthChoice HMO: 15.2 percent (initial rate increase request was 25.1 percent)
- Excellus Health Plan: 15.4 percent (initial rate increase request was 15.9 percent)
- Health Insurance Plan of Greater New York: 13.9 percent (initial rate increase request was 14 percent)
- Healthfirst PHSP: 7.4 percent (initial rate increase request was 6.6 percent, revised to 6.5 percent)
- HealthNow New York: 8.7 percent (initial rate increase request was 6.1 percent, revised to 12.9 percent)
- Independent Health Benefits Corporation: 19.6 percent (initial rate increase request was 19.2 percent)
- Metro Plus Health Plan: 29.2 percent (initial rate increase request was 20.3 percent)
- MVP Health Plan: 6 percent (initial rate increase request was 6.1 percent)
- Fidelis Care New York: 11.6 percent (initial rate increase request was 8.1 percent, revised to 13 percent)
- North Shore-LIJ CareConnect Insurance Company: 29.2 percent (approved without changes)
- Oscar: 19.6 percent (initial rate increase request was 18.4 percent, revised to 20.9 percent; Oscar was also planning to reduce its network size by about half for 2017; the new network has 31 hospitals, down from 77 in 2016. Oscar offers plans in nine New York counties).
- UnitedHealthcare of New York: 28 percent (initial rate increase request was 45.6 percent; United is staying in the New York exchange, which is not the case in most states. They have about 4 percent of the exchange market share in New York)
Regulators noted that the overall impact of their rate review was a reduction in the magnitude of the average rate increase for 2017, although the rates they finalized for some carriers were higher than the proposed rates the carriers had filed. At ACA Signups, Charles Gaba calculated a weighted average rate increase of 16.6 percent for the individual market in New York (including on and off-exchange carriers). This is a little lower than the 17.3 percent weighted average proposed rate increase that the carriers initially filed in May.
All but two of the individual market carriers in New York offer plans in the exchange, but more than half of the small group plans only offer coverage outside the exchange. In the individual market, the two carriers that are only off-exchange (Aetna and Crystal Run) proposed rate increases that were higher than the weighted average (19.4 percent and 89.1 percent, respectively). Ultimately, NYDFS approved an 8 percent rate increase for Aetna, and an 80.5 percent rate increase for Crystal Run.
This is the third year in a row that regulators in New York approved a smaller overall rate hike than carriers had requested. For 2016, health plans in NY’s individual market proposed average rate increases of 10.4 percent, and regulators approved an average rate increase of 7.1 percent. The year before, the difference was even more significant: carriers proposed an average rate increase of 12.5 percent for 2015, but regulators only approved an average increase of 5.7 percent. But NYDFS has a new superintendent who took the helm in January 2016, and the agency has also come under fire for approving Health Republic’s rates that were — in hindsight — too low (more details below).
UnitedHealthcare is continuing to offer exchange coverage in 14 New York counties in 2017. They offered exchange plans in 34 states in 2016, but exited all but three of them at the end of 2016. Their proposed 45.6 percent rate increase for 2017 got trimmed down to 28 percent by NYDFS, but they are continuing to offer coverage.
In 2015, sixteen carriers offered coverage in the individual market through New York State of Health, and nine carriers offered small business coverage through the SHOP exchange (carriers’ phone numbers and provider network links are available here).
American Progressive Life and Health Insurance Company of NY didn’t offer policies for 2015 after gaining a very small market share in 2014, but WellCare joined the exchange in 2015. For 2016, Health Republic was no longer available, and WellCare exited the individual market in New York at the end of 2016.
2016 market share in the exchange
According to the 2016 enrollment report published by NY State of Health, Fidelis Care had the largest market share in the exchange, with 26 percent of QHP enrollees. Empire BCBS, Oscar, MetroPlus, and Healthfirst each had 10 percent of the QHP enrollees in the exchange; those five carriers have two-thirds of the overall exchange market share. The remaining third was spread across 13 carriers.
2.8 million enrolled through NY State of Health in 2016
As of January 31, 2016 — the end of the 2016 open enrollment period — more than 2.8 million people were enrolled in health coverage through New York State of Health, although fewer than ten percent of them were enrolled in QHPs, and the vast majority were enrolled in Medicaid:
- 271,964 were enrolled in private qualified health plans (QHPs). Effectuated enrollment as of March 31 stood at 224,014.
- 379,559 were enrolled in the state’s new Essential Plan (a Basic Health Program – details below)
- 215,380 were enrolled in Child Health Plus
- 1,966,920 were enrolled in Medicaid (as of January 15, 2016 Special Needs Plans are available through NY State of Health for Medicaid-eligible enrollees who have HIV or who are homeless).
Open enrollment for 2016 ended on January 31. But applicants who experienced a qualifying event, could enroll after that, and Native Americans can enroll in QHPs year-round. Applicants who are eligible for the Essential Plan, Medicaid, or Child Health Plus can enroll at any point in the year.
Enrollment in QHPs at the end of the 2016 open enrollment period was significantly lower than it was at the end of the 2015 open enrollment period, when more than 407,000 people had enrolled in QHPs. But that’s due to the fact that the Essential Plan only became available for 2016. It covers people with incomes between 138 percent and 200 percent of the poverty level – all of whom were eligible for subsidized QHPs in 2015, and are instead eligible for the Essential Plan in 2016.
The advent of the Essential Plan also reduced the percentage of QHP enrollees who are receiving premium subsidies. For 2015, 70 percent of QHP enrollees in New York State of Health were receiving premium subsidies, whereas for 2016, only 55 percent of effectuated enrollees (as of March 31) had premium subsidies. That’s because the whole population eligible for the Essential Plan was previously eligible for premium subsidies, but are now enrolled in the Essential Plan instead.
At the end of the 2015 open enrollment period, total enrollment through NY State of Health stood at 2.1 million – significantly lower than the 2.8 million total for 2016. Of those, 564,315 had coverage in QHPs and Child Health Plus. For comparison, during the 2016 open enrollment period, nearly 867,000 people enrolled in QHPs, Child Health Plus, and the Essential Plan.
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 will have 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.
California lawmakers also considered similar legislation, although it was more specific in terms of what would be allowed, and it wouldn’t have gone into effect until 2017. Initially, the California bill clarified that only women without minimum essential coverage would be allowed to enroll upon becoming pregnant – so the qualifying event triggered by pregnancy would have been more limited than a regular qualifying event that allows people to switch from one plan to another (New York’s legislation does not have that sort of qualifying language, women in New York will have the option not only to enroll for the first time, but also to switch to another plan at the commencement of pregnancy). Ultimately, lawmakers in California did not move forward with the bill as originally written. Instead, they changed the language to state that people who were declined for coverage (because they applied outside of open enrollment) should be referred to the state’s high risk pool, which is still operational. California also has a Medicaid program for pregnant women with income up to 322 percent of the poverty level, and enrollment is year-round.
New York is tied with Hawaii for having the highest rate of unintended pregnancies in the country (61 percent). Advocates have cheered the new legislation in New York, noting that pre-natal care increases the odds of a healthy, full-term pregnancy, and that unintended pregnancies necessitate the option to enroll in health coverage when a pregnancy is confirmed. But there are also concerns that this “loophole” in the enrollment system could result in adverse selection and higher premiums, since women will be able to wait until they’re pregnant – and in need of healthcare – to enroll in coverage. The ACA’s penalty for being uninsured will still apply to women who are uninsured during a given year for a period of more than two months.
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’ll 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.
Some carriers cut commissions
But three of the carriers — United Healthcare of New York (including Oxford), Oscar, and Empire BCBS — reduced or eliminated broker commissions for plans sold in 2016, indicating that they would prefer to not sell a significant number of plans – particularly outside of open enrollment. Empire’s commission cuts apply to plans sold after the end of open enrollment (effective dates of April 1 or later).
Carriers nationwide have noted that enrollees who sign up during special enrollment periods (triggered by qualifying events) are using 55 percent more services than people who enroll during open enrollment. There has been significant concern that qualifying events are not being enforced as strictly as they should be, and that people have essentially been able to “game” the system and wait until they’re sick to enroll. CMS began working to step up enforcement of special enrollment period eligibility in 2016, and is continuing to do so in 2017. But that verification process applies in states that use HealthCare.gov, not in states like New York that have their own exchange.
On July 31, New York published final rate changes for both the individual and small group market, including plans that are sold through NY State of Health, the state’s ACA-created state-run exchange.
In the individual market, carriers had requested an average rate increase of 10.4 percent, but regulators knocked that down to 7.1 percent. Health Republic initially had the highest approved rate increase (14 percent), but they are no longer selling plans and their existing 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.
Of the 16 carriers in New York’s individual market in 2015, 15 offered plans through NY State of Health. Across those 15 plans (including Health Republic, which is no longer in business), approved rate changes varied from a decrease of more than 10 percent (Independent IHBC) to an increase of 13.2 percent (Empire HMO).
Five carriers’ rates were approved as proposed, but regulators reduced the requested rates for the remaining carriers. In some cases, the reduction was quite significant; for example, United had proposed a 22 percent increase, and the final approved rate was just a 1.65 percent increase.
Four exchange carriers (Health Now, Independent IHBC, Metro Plus, and Wellcare) have lower average rates in 2016 than they did in 2015.
The state closely scrutinized the filed rate requests, and ended up approving lower rates than carriers requested, the same as the did the previous year. Rates only increased an average of 5.7 percent for 2015, but carriers had initially requested average hikes of 12.5 percent.
The New York Health Plan Association has stated that the final rate increases for 2015 were lower than the increase in claims costs, and they’ve expressed disappointment that state regulators once again reduced the proposed rate changes from insurers. NYHPA President and CEO, Paul Macielak, said that the approved rates for 2016 “continue an artificial suppressing of rates merely to support the claim that New York is keeping premium increases ‘below the average increase in health care costs’ which doesn’t make sense.”
State regulators reiterated the fact that premiums continue to be nearly 50 percent lower than they were prior to 2014, although that’s because New York enacted healthcare reform more than two decades ago, implementing guaranteed-issue coverage for all enrollees. But they did not have an individual mandate or premium subsidies, which meant premiums in New York’s individual market were dramatically higher than the national average prior to 2014.
The majority of New York State of Health’s enrollees are receiving premium subsidies, and those subsidies mute the impact of rate increases as long as consumers take the time to shop around during open enrollment. Open enrollment for 2016 continues until January 31. State of Health projected that their total private plan enrollment will be up to 615,000 people by the end of 2016, but it’s not clear if they were accounting for Essential Plan enrollments in that total (and the fact that QHP enrollments have declined correspondingly).
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.
New York established a hotline to assist Health Republic’s members with the transition to a new carrier: 1-855-329-8899.
In the individual market, enrollees were initially told they would need to select their new plan by November 15 in order to have a smooth transition to a new plan for December 1. Several of us pointed out that technically, enrollees can choose to use a special enrollment period triggered by a qualifying event – loss of coverage – and would be able to enroll up until November 30 and get a December 1 effective date. Nonetheless, NY State of Health and the Department of Financial Services were pushing the November 15 enrollment date, most likely to avoid the confusion that would arise if thousands of enrollees were trying to navigate a special enrollment period that happened concurrently with general open enrollment.
CO-OP members had until Nov 30 to select new plan
But on November 8, New York regulators announced that Health Republic members would have until November 30 to select new coverage for December, and also announced that members who failed to select a new plan for December would be automatically enrolled in a replacement plan. NYDFS said that the automatic enrollment would be to the plan that provided the closest level of benefits to the Health Republic plan the member was on, but provider networks could vary significantly.
On November 13, 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 members were advised to keep their insurance records from this year so that they can prove to their new carrier how much their out-of-pocket costs have been for 2015.
Health Republic members who didn’t want to enroll in new coverage for December were able to opt out of the automatic re-enrollment. There was some risk of adverse selection for the remaining carriers in NY, since it’s likely that some of Health Republic’s more healthy enrollees opted to be uninsured in December (there’s no penalty for a one-month gap in coverage), whereas virtually all of the sicker members likely switched (either actively or via the auto-enrollment process) to new plans for December.
Health Republic was the only insurer in NY State of Health that included Memorial Sloan Kettering Cancer Center in its network, and there are no exchange plans in 2016 that include the MSK in their networks.
In the small group market, NYDFS said that employers “should act as soon as possible to choose a new policy from another insurer for its employees to ensure continuity of coverage after November 30, 2015.” Individual plans typically run on a calendar-year basis, but small group plans typically have a plan year that begins on their effective date and runs for a year. 35 percent of the small businesses enrolled through NY State of Health’s SHOP exchange had coverage with Health Republic.
Health Republic members enroll twice
For members who transitioned to new plans for December, there was likely a premium increase. 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.
Health Republic members essentially needed to shop around twice. They needed to find the best plan to meet their needs for December, which was priced with 2015’s rates. But then they also needed to make sure that they found the best plan to meet their needs and budget starting in January (the deadline to do so was extended to December 19); those plans are priced with 2016’s rates. The rate on the plan they selected for December was only valid for one month. If they chose to keep that same plan in January, the rate changed for the new year.
All consumers – Health Republic members as well as the rest of the population insured under individual plans – had to make their 2016 plan selections by December 19 in order to have their plan of choice in effect January 1.
Doctors, hospitals, and brokers left holding the bag
As a result of Health Republic’s collapse, medical providers and brokers in New York are owed millions of dollars, with no assurance that they’ll ever receive the outstanding funds. Some doctors have reported reimbursement checks that have bounced, and others simply haven’t received checks at all – in some cases, since the middle of last summer. A state law prohibits health providers from billing patients directly in an effort to collect unpaid Health Republic claims.
But the state of New York is expected to have more than a billion in surplus funds in its budget in 2016. The state Association of Health Underwriters has requested that lawmakers and Governor Cuomo use part of the budget surplus to cover some of Health Republic’s unpaid obligations to medical providers and brokers.
NYDFS has launched an investigation into Health Republic’s “inaccurate financial reporting,” and a Crain’s New York Business report published in April 2016 indicates that Health Republic’s plans were significantly underpriced and that Health Republic was on “unsteady ground” from its inception in 2012.
Comprehensive enrollment report – 2015
On July 29, NY State of Health published a comprehensive enrollment analysis that sums up a wide range of data for 2015 enrollments, including the on-exchange market share of all the carriers that offer plans through NY State of Health. The report released by NY State of Health includes a wealth of information about their enrollment progress. Some highlights:
- Navigators, CACs, and brokers enrolled two-thirds of the 2015 enrollees, while the other third enrolled on their own via the website, or enrolled over the phone using the call center. The exchange has a total of 11,388 Navigators, CACs, and brokers.
- Of the 16 carrier that offer individual exchange plans in 2015, six have expanded into additional counties this year, compared with 2014.
- 86 percent of the people who had QHPs through NY State of Health in 2014 renewed their coverage for 2015 (some selected a different plan, but they maintained coverage through the exchange).
- 54 percent of subsidized enrollees (not necessarily all effectuated however) have incomes at or below 200 percent of poverty level. Roughly 70 percent of effectuated enrollees are receiving subsidies, so about 38 percent of all QHP enrollees have incomes between 138 percent and 200 percent of poverty (those up to 138 percent are eligible for expanded Medicaid in New York). Those enrollees will be eligible for BHP coverage in 2016.
- 56 percent of the exchange’s enrollees live in New York City.
- In 2014, the top four insurers in NY State of Health had 65 percent of the market share. In 2015, that dropped to 59 percent, indicating improved market competition.
- 58 percent of enrollees selected silver plans, 18 percent selected bronze, 10 percent selected gold, 12 percent selected platinum, and 2 percent chose catastrophic plans. Cost sharing subsidies are only available on silver plans (for enrollees with income up to 250 percent of the poverty level), and 45 percent of QHP enrollees are receiving cost-sharing subsidies.
- 11 carriers offer stand-alone dental plans through NY State of Health. Healthplex Insurance Company enrolled 28 percent of the stand-alone dental applicants.
- As of early April, 3,708 small businesses were offering insurance to their employees through NY State of Health’s small business marketplace; ten insurers offer plans through the small business marketplace.
- In the small business marketplace, platinum plans are the most popular, followed by gold, then silver, then bronze (employers pay a portion of the premium, and there’s no incentive to select silver plans the way there is in the individual market, since cost-sharing subsidies are not part of the small business marketplace).
Individual market enrollment in NY up 89%
In April, the Kaiser Family Foundation released a report on overall individual market growth from 2013 to 2014, based on enrollment data at the end of each year. The study looked at the entire individual market, including exchange plans, off-exchange plans, and grandmothered/grandfathered plans, and did not differentiate in terms of what percentage of the market growth could be attributed to exchange enrollment.
In New York, the individual market grew by 89 percent in 2014 – the fourth-highest percentage growth increase in the country. And KFF notes that three carriers in NY – Affinity, MetroPlus, and Fidelis Care – did not submit data for the survey, so it’s likely that the individual market growth is actually higher than 89 percent (according to NY State of Health, those three carriers accounted for 32 percent of the exchange’s QHP enrollments in 2015). Nationwide, individual market growth was 46 percent.
2015 enrollment progress
By the end of open enrollment on February 15, NY State of Health announced that their total enrollment, including private plans and Medicaid/CHIP, had exceeded 2.1 million people, and that 88 percent of them had been uninsured prior to obtaining coverage through the exchange.
564,315 of those enrollees selected private plans (although the private plan enrollment total includes 156,827 Child Health Plus enrollees; the remaining 407,488 enrollees have QHPs). By February 21, HHS reported that NY State of Health’s private plan enrollment (not counting CHP) stood at 408,841, and that 35 percent of those enrollees are new to the exchange for 2015. Total Medicaid enrollment through the exchange stood at 1,545,319 people as of February 15.
Some QHP enrollees didn’t pay their initial premiums, and others opted to cancel their coverage early in the year. As of the end of March, NY State of Health had 361,340 people with coverage in effectuated QHPs. Unlike most states – where effectuated enrollment continued to decline in the second quarter of 205 – New York State of Health’s effectuated enrollment climbed, reaching 370,058 by the end of June. About 71 percent are receiving premium subsidies, and about 47 percent are receiving cost-sharing subsidies. Both of those numbers should decrease in 2016, once the BHP is introduced, as it will provide coverage for a significant number of lower-income residents who are currently enrolled in QHPs with premium subsidies and cost-sharing subsidies.
The majority of the current enrollees obtained coverage through the exchange in 2014 and renewed it for this year. But 552,993 enrollees are new to the exchange for 2015. Of those, about a third are enrolled in private plans (including Child Health Plus), and the rest are enrolled in New York’s expanded Medicaid program.
At the start of the 2015 open enrollment period, NY State of Health executive director, Donna Frescatore, was predicting 350,000 new private plan enrollments for the exchange by February 15, 2015, in addition to retaining their 370,000 2014 enrollees.
That put their target at 720,000 total private plan enrollees by the end of the second open enrollment, and clearly they fell short of that goal. Officials now believe that by the end of 2016, there will be 615,000 people enrolled in private plans through the exchange (although far more than that will likely enroll over the course of three years, the individual health insurance market has always been volatile, and attrition is to be expected as time goes by).
In 2015, NY State of Health added a feature to their website that allows users to browse plans, including estimated premium subsidies, by entering some very basic information about their age, location, and income. During the first open enrollment period this wasn’t available – people had to enter identifying data in order to see prices that included subsidies. The improvement – similar to one that Healthcare.gov made for people in states with federally facilitated marketplaces – makes the website more user-friendly.
2015 rates and changing benchmark plans
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.
But as of November 11, 2014, PricewaterhouseCooper’s weighted average rate increase across 21 carriers in New York was just half a percent for 2015, ranging from a decrease of 15.3 percent to an increase of 13 percent. Any way you look at it, rates in New York looked pretty good in 2015.
Within the exchange, the second-lowest cost Silver plan (the benchmark plan) in New York City averaged $365/month (pre-subsidy) for a 40 year-old enrollee in 2014. That increased to $372/month for 2015 – an average increase of just 1.8 percent. But that’s assuming that the applicant again selected the second-lowest-cost Silver plan in 2015, which often means switching plans.
The Upshot from the NY Times released a map that showed each state broken into rating areas and the average price changes that enrollees in the 2014 benchmark plan could expect if they stayed with their plan from 2014, versus switching to the new benchmark plan for 2015. In some areas of New York, it made a dramatic difference in premium. Regardless of where you live, it’s always in your best interest to take a few minutes to shop around again before settling on a plan for the coming year.
Regulations, funding, and legislation
In late-April 2014, officials decided that carriers would not be required to cover out-of-network care in order to sell plans for 2015. This was a contentious issue during the first open enrollment, as none of the 16 carriers offering plans in the NY exchange cover out-of-network care unless it’s an emergency. Consumer advocates had pushed to require plans to cover out-of-network care, citing the narrow networks as a barrier to care for some residents. But insurers pushed back, noting that plans would be more expensive if they covered services provided outside of the established networks – ultimately, the exchange agreed.
State-run exchanges across the country have scrambled to secure funding going forward, as all exchanges were required to be financially self-sustaining starting in 2015. New York State of Health was planning to rely solely on state funds to pay for the exchange in 2015 (as opposed to user fees).
But in early February 2015, Governor Andrew Cuomo unveiled his 2015-2016 executive budget, which included a new tax on health insurance premiums (roughly $25 per person) for private plans sold on and off the exchange. The tax was projected to raise about $69 million, but health insurance carriers were opposed to the tax, as they say it will make health insurance less affordable for NY residents. Ultimately, lawmakers rejected the tax, and it is not included in the budget.
New York Governor Andrew Cuomo included the ACA’s Basic Health Program in his budget proposal released in late January 2014. As noted above, the BHP will be available for people with incomes between 138 percent and 200 percent of poverty starting in 2016. Although provisions for the BHP were included in the ACA, only a handful of states have thus far expressed interested in pursuing the BHP as a way to provide health insurance for low income residents who don’t qualify for Medicaid. That NY is among them is no surprise, given how dedicated the state has been to implementing and supporting the ACA.
Given the success of the exchange, officials in New York declined President Obama’s offer to allow health insurance plans scheduled for year-end termination to be extended into 2014. Roughly 100,000 NY residents received cancellation notices, but that figure is dwarfed by the number of people who enrolled in exchange plans with January 2014 effective dates, so it’s likely that most of the cancelled plans were replaced with new ACA-compliant plans.
New York State of Health has been one of the most successful exchanges in the country. As of April 15, 2014, 370,604 New Yorkers had enrolled in private health plans through NY State of Health, and another 590,158 had enrolled in Medicaid or CHIP, bringing total enrollment to 960,762.
Of the people who selected private plans, 74 percent received subsidies – lower than the national average of 85 percent. New York’s enrollment included a slightly higher percentage of “young invincibles” (people between the ages of 18 and 34), at 31 percent , than the national average of 28 percent.
2014 enrollment data is available based on zip codes (impressive considering the state has 2,200 zip codes!) in an interactive map created in November by Capital New York. And it’s broken down into QHP, Medicaid and CHIP totals to give a very accurate picture of where the exchange has had the most impact.
Among the 2014 enrollees, more than 80 percent were uninsured prior to enrolling in coverage. According to Gallup data, the uninsured rate in New York was 12.6 percent in 2013, and had fallen to 8.3 percent by the first half of 2015.
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 ACA-style reforms in the individual market two decades ago; policies there have been guaranteed issue and community rated ever since. This meant that premiums in New York were far higher than in other states where medical underwriting was utilized. There was no individual mandate, and few insurers participated in the pre-ACA individual market in New York.
The ACA’s individual mandate has increased the number of carriers offering policies in New York, and premiums in 2014 and 2015 were more than 50% lower than they were in 2013, and that continued to be the case in 2016. Combined with the ACA’s premium subsidies, these changes make individual health insurance far more affordable in New York than it used to be.
Carriers are also allowed to offer plans outside the exchange in NY, but they are required to offer the same policies in the exchange that they offer outside the exchange, which means there aren’t many reasons for consumers to shop off-exchange in NY.
About 2.7 million people in New York — about 16 percent of the population — did not have health insurance in 2013, according to the Urban Institute. About 1.1 million are expected to eventually buy insurance through the new marketplace.
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.