NY’s CO-OP plans will terminate November 30
On September 25, regulators announced that Health Republic of New York, an ACA-created CO-OP, would begin winding down its operations. The CO-OP is no longer offering plans for sale, and 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 has about 87,000 effectuated individual enrollments – roughly 20 percent of the individual market in the state. They also have about 79,000 members in the small group market. Initially, state regulators said that current enrollees 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, current policies will terminate at the end of November, and enrollees need to secure new coverage for December, in addition to selecting coverage for 2016.
New York has 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 have 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, although the details on how that plan would be selected aren’t entirely clear. NYDFS has said that the automatic enrollment will be to the plan that provides the closest level of benefits to the Health Republic plan the members is currently on, but provider networks could vary significantly. Health Republic members who don’t wish to enroll in new coverage for December will be able to opt out of the automatic re-enrollment.
In the small group market, NYDFS has just 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 have coverage with Health Republic.
NYDFS has launched an investigation into Health Republic’s “inaccurate financial reporting,” although the investigation is still in its early stages.
Technicalities for Health Republic members
Once it was announced that Health Republic would end on November 30 instead of December 31, a new problem arose. What happens to the members who have already met their deductibles for 2015 and have ongoing medical treatment? If they switch to a new carrier, does their deductible start over on December 1? I contacted the New York Department of Financial Services and they confirmed that they’re working with the other carriers in the state to ensure that people get credit for any cost-sharing they’ve already accrued with Health Republic so far this year. Health Republic members are being 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.
That’s good news, but it’s also easier said than done. And it poses adverse selection risks for the remaining carriers in NY, since it’s likely that some of Health Republic’s more healthy enrollees will just opt to be uninsured in December (there’s no penalty for a one-month gap in coverage), whereas virtually all of the sicker members are likely to be switching to new plans for December.
For members transitioning to new plans for December, there is likely to be a premium increase. Health Republic was priced far lower than most other carriers offering plans through NY State of Health. 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 need to shop around twice. They need to find the best plan to meet their needs for December, which will be priced with 2015’s rates. But then they also need to make sure that they find the best plan to meet their needs and budget starting in January; those plans will be priced with 2016’s rates. The rate on the plan they select for December will only be valid for one month. If they choose to keep that same plan in January, the rate will change for the new year. All consumers – Health Republic members as well as the rest of the population insured under individual plans – will need to make their 2016 plan selections by December 15 in order to have their plan of choice in effect January 1.
So there are really two important dates for Health Republic members to be aware of: November 15 is the deadline to pick a plan for December (without trying to use a special enrollment period concurrently with open enrollment, which is certain to be technologically challenging). And December 15 is the deadline to make sure you’ve got the plan you want for 2016.
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 November. 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 for 2016 continues until January 31. By the end of 2016, NY State of Health projects that their total private plan enrollment will be up to 615,000 people.
Basic Health Program available for 2016
In April 2015, New York State of Health announced that they would introduce a Basic Health Program (BHP) in the fall dubbed the “Essential Plan.” Enrollment in the Essential Plan began on November 1, 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 received federal approval for their 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 will pay just $20 per month in premiums. 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 a BHP during the 2016 open enrollment period 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).
Will pregnancy become a qualifying event?
In June 2015, 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 had not done so as of early November. If S.5972 were to be enacted, New York would 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 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, 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 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 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, 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). Ultimately, lawmakers in California did not move forward with the bill as originally written. Instead, they changed the language to state the 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 (CA 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.
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.
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. Colorado will likely have an initiative on the ballot in 2016 that would create a universal healthcare system in the state.
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.
Carriers in New York
NY State of Health announced in September 2014 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 also offered stand-alone dental plans from ten different carriers for 2015. Across all three types of coverage – individual, small group, and dental – there were a total of four new insurers on the NY exchange for 2015.
Sixteen insurers – double the national average – participated 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) – plans will terminate on November 30, 2015, Health Republic will not be available in 2016.
- 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 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 will continue 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),