NY’s CO-OP is the fourth to shut down
On September 25, regulators announced that Health Republic of New York, an ACA-created CO-OP, would be shutting down at the end of the year. The CO-OP is no longer offering plans for sale, and is the fourth CO-OP nationwide to succumb to the challenging market conditions under which they began their operations.
Health Republic of NY has about 87,000 effectuated enrollments – roughly 20 percent of the individual market in the state. They also have about 79,000 members in the small group market, but those members will be able to keep their coverage a little longer, since their plans aren’t sold on a calendar year basis. All of the individual plans are sold on a calendar year basis, and will terminate as of December 31, 2015.
Enrollees who have individual coverage through Health Republic will need to select a plan from one of the other 15 carriers in the individual market in New York, and will need to complete the process by December 15 in order to have the new plan take effect January 1.
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 will terminate their existing plans at the end of the year. Since all of Health Republic’s individual enrollees will have to switch to other carriers during open enrollment, the final weighted average rate increase is going to end up being less than the 7.1 percent that regulators had initially stated.
Of the 16 carriers in New York’s individual market, 15 offer plans through NY State of Health. Across those 15 plans, approved rate changes vary 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 is just a 1.65 percent increase.
Four exchange carriers (Health Now, Independent IHBC, Metro Plus, and Wellcare) will 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 last 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 will 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 will mute the impact of rate increases as long as consumers take the time to shop around during open enrollment. Open enrollment begins on November 1, and continues until January 31, 2016.
Basic Health Program coming in 2016
On April 17, New York State of Health announced that they will introduce a Basic Health Program (BHP) in the fall dubbed the “Essential Plan.” It will be available during the general open enrollment that begins on November 1. BHPs are an option available to all states under the ACA, but thus far, only New York and Minnesota have received federal approval for their BHPs.
In New York, the BHP will be available from a variety of private carriers, will have no deductible, and will have 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 will pay just $20 per month in premiums. Currently, enrollees with incomes between 138 percent and 200 percent of poverty are eligible for premium subsidies and cost-sharing subsidies, but switching to a BHP during the upcoming open enrollment may result in lower premiums and lower cost-sharing.
Comprehensive enrollment report
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).
Pregnancy could become a qualifying event
On June 17, the New York state Assembly and Senate unanimously passed S. 5972. The legislation makes pregnancy a qualifying event through the state-run exchange, New York State of Health. Although Governor Cuomo was expected to sign the bill, he has not done so as of late September. If S.5972 is enacted, New York will become the first state in the nation where pregnancy would allow a woman to enroll in a plan through the exchange. If signed into law, the regulation would go into effect in January 2016, and would allow a pregnant woman to enroll with an effective date of the first of the month in which her pregnancy is confirmed.
Under federal ACA rules, the 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 in their most recent update on qualifying events, they noted in February that they had opted not to include pregnancy as a qualifying event. That could still change in the future however, and the success of the legislation in New York will certainly put pressure on other state-run exchanges to follow suit.
California has similar pending legislation, although it’s more specific in terms of what would be allowed, and it wouldn’t go into effect until 2017. In California, the legislation clarifies that only women without minimum essential coverage would be allowed to enroll upon becoming pregnant – so the qualifying event triggered by pregnancy would be 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, so it’s possible that pregnancy 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.
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.
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.
Single-payer in NY?
Although the BHP puts NY ahead of almost all other states in implementing the ACA and healthcare reform, advocates for single-payer healthcare are hard at work in the state. New York lawmaker Richard Gottfried (D-Manhattan) has been working on a plan for single-payer healthcare 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 about the proposed plan.
Gottfried and Perkins introduced their bill nearly two 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 Mach 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 late May, 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. So while the successful vote is certainly a victory for universal health care, it’s mostly a symbolic victory at this point.
Vermont was on a path to single-payer health care, but pulled the plug in late 2014 amid cost and taxation concerns.
The second round of open enrollment began on November 15, 2015 and navigators and brokers were impressed with the improvements that the exchange made since the first open enrollment, with one navigator organization pointing out that for most of the people they’re helping, the enrollment process takes half the time it did during the 2014 open enrollment period.
In November, soon after open enrollment began, NY State of Health executive director, Donna Frescatore, was predicting 350,000 new private plan enrollments for the exchange by February 15 (they had 132,549 as of February 4), in addition to retaining their 370,000 2014 enrollees.
That put their target at 720,000 total private plan enrollees by the end of open enrollment, and clearly they fell short of that goal. But ACAsignups’ Charles Gaba – who is usually very accurate in his predictions – had a lower projection for NY State of Health (573,000 by February 15), and the exchange came very close to reaching that mark. Once the totals are in for the tax season special enrollment period, it’s likely that they could exceed 573,000 private plan enrollees.
Officials believe that after three years, 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).
The exchange allowed automatic renewal for people who, during their 2014 enrollment, granted the exchange permission to access their tax returns in subsequent years to verify subsidy eligibility. But even if your plan was automatically renewed, it was still worth your while to compare the 2015 plans during open enrollment to see if a different plan offered a better value this year. NY State of Health created a video that explained what you needed to do if you already purchased a plan in 2014.
NY State of Health has 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.
How successful is NY State of Health?
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 are satisfied with their coverage, and three quarters of the exchange’s enrollees would recommend NY State of Health to other people.
2015 rates and changing benchmark plans
Has the law delivered affordable health insurance to the state? 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 is 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, 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 look pretty good.
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’s gone up to $372/month for 2015 – an average increase of just 1.8 percent. But that’s assuming that the applicant again selects the second-lowest-cost Silver plan in 2015, which often means switching plans.
The Upshot from the NY Times released a map that shows each state broken into rating areas and the average price changes that enrollees in the 2014 benchmark plan can expect if they stay with their plan from 2014, versus switching to the new benchmark plan for 2015. In some areas of New York, it makes a dramatic difference in premium. Regardless of where you live, it’s in your best interest to take a few minutes to shop around again before settling on a plan for 2015.
Carriers offering 2015 policies
NY State of Health announced on September 22 that sixteen carriers would be offering coverage in the individual market for 2015, and nine carriers would offer 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 will no longer be selling policies after gaining a very small market share in 2014. But WellCare has joined the exchange for 2015.
NY State of Health is also offering stand-alone dental plans from ten different carriers for 2015. Across all three types of coverage – individual, small group, and dental – there are a total of four new insurers on the NY exchange for 2015.
Sixteen insurers – double the national average – are participating in the state’s individual marketplace for 2015:
- Affinity Health Plan, Inc.
- Capital District Physicians Health Plan, Inc.
- Health Insurance Plan of Greater New York (EmblemHealth)
- Empire BlueCross and Empire Blue Cross Blue Shield
- Excellus (Excellus Blue Cross Blue Shield in Central NY and Univera in Western NY)
- Fidelis Care (NY State Catholic Health Plan)
- Freelancers Co-Op (Health Republic Insurance)
- Healthfirst New York
- HealthNow New York, Inc. (Blue Shield of NENY; Blue Cross Blue Shield of Western NY)
- Independent Health
- MetroPlus Health Plan (Market Plus)
- MVP Health Plan, Inc.
- North Shore LIJ
- Oscar Insurance Corporation
- United Healthcare of New York, Inc. (United, Oxford)
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 are scrambling to figure out how to obtain funding going forward, as all exchanges are 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 includes 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 are 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 by 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 1 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.
This was a significant increase from the 812,000 people who had enrolled as of early in the day on March 31. 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.
Enrollment data – current as of September – 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, so NY is certainly making a huge dent in its uninsured population.
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 are available by county, and a calculator to help consumers learn if they are eligible for tax credits and how much they will pay for health insurance.
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 pay 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 were more than 50% lower than they were in 2013, and that will continue to be the case in 2015. 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),