United exiting exchange; impact likely to be small
At the end of 2016, UnitedHealthcare will exit the individual market in Oklahoma, as will be the case in most of the other 34 exchanges where they currently offer plans. The carrier was new to the exchange for 2016, and garnered very little market share – Blue Cross Blue Shield of Oklahoma is the only other carrier in the exchange, and currently covers 95 percent of the exchange enrollees.
According to an analysis by Kaiser Family Foundation, UnitedHealthcare offers coverage through the exchange in all 77 counties in Oklahoma, but doesn’t have the lowest or second-lowest-priced silver plan anywhere in the state. Those tend to be the most popular with enrollees, and price likely has a lot to do with United’s small market share in Oklahoma.
Aetna scraps plan to rejoin exchange
Aetna participated in the exchange in Oklahoma in 2014, but exited the exchange (and the entire individual market in Oklahoma) just prior to the start of open enrollment for 2015 coverage. They did not offer individual market coverage in Oklahoma in 2015 or 2016, on or off-exchange.
But for 2017, they indicated that they would rejoin the Oklahoma exchange, albeit only in the metropolitan areas of Tulsa and Oklahoma City. Aetna’s exchange plans do appear in the Oklahoma SERFF filings for 2017, although the carrier indicated earlier in the summer that their plan to rejoing the exchange for 2017 had not yet been finalized.
In early August, Aetna announced that they were cancelling their plans to expand their exchange presence in 2017. They already offer coverage in 15 exchanges, but had planned to expand into five more in 2017, including Oklahoma. They are no longer planning to offer any coverage in the exchange in Oklahoma, which means that Blue Cross Blue Shield will be the only carrier in the state’s exchange in 2017.
From a practical standpoint, the impact of United’s exit will be modest, because nearly everyone in the exchange already has coverage from BCBS of OK. And although Aetna is no longer planning to offer coverage in the exchange, their coverage offerings were going to be limited to Tulsa and Oklahoma City, so most of the state was going to have only BCBS of OK even before Aetna decided not to participate.
2017 rates and carriers
Rate filings for plans sold through the exchange in Oklahoma are reviewd by CCIIO, as the state does not have an effective rate review program. Blue Cross Blue Shield of OK has filed average proposed premium increases for 2017 that range from 49.8 percent to 51.7 percent (overall average is 49.2 percent).
CCIIO’s rate review process does not give the federal government the power to deny rate increases, so it’s likely that the rates filed by BCBS of OK will be implemented for 2017. But 87 percent of exchange enrollees in Oklahoma are receiving premium subsidies, and for many of them, the subsidies will cover the bulk of the premium hikes.
Regardless of the final rate increases that are implemented, it will be essential for all enrollees in Oklahoma to log back into their exchange account during open enrollment to ensure that they’re picking the plan that represents the best value for 2017.
Community Care and Freedom Life will continue to offer plans only outside the exchange in 2017.
enrollment up 15% over last year
During the 2016 open enrollment period, 145,329 people enrolled in private health plans through the Oklahoma exchange, including new enrollees and renewals. For perspective, 126,115 people enrolled in private plans through the Oklahoma exchange during the 2015 open enrollment period. So the 2016 enrollment tally is a 15 percent increase over the prior year.
Attrition is a normal part of the individual market landscape, as some enrollees don’t pay their initial premiums, and others end up cancelling their coverage before the end of the year. As of March 31, 2016, effectuated enrollment in the Oklahoma exchange stood at 130,178. Of those enrollees, 87 percent were receiving premium subsidies. The 10 percent attrition rate by the end of the first quarter is a little lower than the national average of about 13 percent.
Open enrollment ended on January 31. Enrollment in a 2016 plan – including off-exchange – now requres a qualifying event, although Native Americans can enroll year-round, as can anyone eligible for Medicaid or CHIP.
A dynamic carrier landscape
Oklahoma had four carriers in its exchange in 2015, but only two are offering plans for 2016 – one of which is exiting the exchange at the end of 2016. For 2016 coverage, enrollees can choose from plans offered by Blue Cross Blue Shield of Oklahoma and United Healthcare. The market landscape in the state’s exchange has changed significantly for 2016, and will do so again for 2017:
- UnitedHealthcare is new to the Oklahoma exchange for 2016, but offered plans outside the exchange in 2015. They will exit the exchange at the end of 2016.
- Blue Cross Blue Shield of Oklahoma no longer offers the Blue Choice provider network in the individual market in 2016 (but continues to offer it in the group market). There are about 40,000 insureds in Oklahoma who had to switch to plans that use the Blue Advantage or Blue Preferred networks – both of which are PPOs, but narrower than Blue Choice. The Blue Advantage network is concentrated in the Tulsa and Oklahoma City metro areas, and is not available at all in 25 of the state’s 77 counties. Most existing enrollees were eligible for auto-renewal, but Blue Choice network insureds who opted for auto-renewal were mapped to a plan with a different network. Blue Cross Blue Shield of Oklahoma ended up with 95 percent of the exchange market share for 2016.
- CommunityCare is no longer offering plans in the exchange. State officials have said that the carriers had fewer than 2,000 insureds in late 2015, but they needed to secure coverage from BCBS or UnitedHealthcare if they wanted to continue receiving premium subsidies in the exchange. The deadline to pick a plan with a January effective date was December 17, but insureds had the option to switch to an on-exchange plan with a February or March start date if they missed the deadline to get January coverage.
- Global Health offered plans in the exchange in 2015, but exited the individual market at the end of 2015, and is not offering individual plans either on or off-exchange in 2016.
- Time/Assurant exited the individual market nationwide, and is not offering plans for 2016 on or off the exchange.
- Enrollees who had coverage through Global Health, CommunityCare, and Time/Assurant needed to select new coverage from one of the carriers offering plans in 2016. Although according to Lexology, those three carriers accounted for less than three percent of Oklahoma’s exchange enrollees in 2015. The exchange had 108,614 effectuated enrollees as of the end of June, so there were somewhere around 3,200 people who are impacted by the withdrawal of those three carriers from the market in Oklahoma. The rest of the enrollees – about 97 percent of the total in 2015 – were covered under Blue Cross Blue Shield of Oklahoma plans. BCBS is continuing to offer coverage, but enrollees on the Blue Choice network were transitioned to plans that use one of BCBSOK’s other networks – they also had the option to shop around during open enrollment to see if UnitedHealthcare offered a better alternative.
- Humana continues to offer plans only outside the exchange in Oklahoma.
- For 2017, BCBS of Oklahoma will continue to offer plans in the exchange.
2016 rates: 22 to 34% increase for most enrollees
Oklahoma is one of five states that leaves the on-exchange rate review process entirely up to HHS; the state only actively reviews proposed rates for off-exchange plans.
In the individual market, BCBS of OK, which had the lion’s share of the individual market in the state in 2015, proposed a 31.2 percent average rate increase across all of their ACA-compliant plans. The rates that were ultimately approved range from 22 percent to 34 percent, but the approved rate increase for Blue Preferred PPO plans ended up at 32 percent, which was significantly lower than the 44 percent rate hike the carrier had proposed. For Blue Cross Blue Shield’s PPO multi-state plan and the Blue Advantage PPO, the approved rates were very similar to what was proposed.
UnitedHealthcare is new to the exchange for 2016. Prior to open enrollment, a state official said that their rates would be competitive with BCBS of Oklahoma’s rates in 2016. But a quick check of rates on Healthcare.gov (sample zip codes include Oklahoma City, Tulsa, Edmund, Lawton, and Norman) indicates that UnitedHealthcare’s lowest-priced plans are significantly more expensive than BCBS of Oklahoma’s lowest-priced plans – in most areas, by at least $100/month for a 40-year-old.
Statewide, the average benchmark premium (second-lowest-cost-Silver plan) in the Oklahoma exchange is 35.7 percent more expensive in 2016 than it was in 2015. This is the sharpest increase in any of the 37 states that used Healthcare.gov in 2015.
The good news for enrollees is that premium subsidies are tied to benchmark premiums, so average premium subsidies are higher in 2016 to account for the higher benchmark rates. But it appears that the promise of added competition from UnitedHealthcare didn’t extend to plans on the lower end of the premium scale. Enrollees looking for low premiums likely found that BCBS of Oklahoma had little in the way of competition, despite their sharp rate increase for 2016.
For the plans that UnitedHealthcare offered outside the exchange in 2015, the average approved rate increase was 12.5 percent (a little higher than the 9.96 percent rate increase that UnitedHealthcare proposed for those plans).
How many people enrolled for 2015?
126,115 people in Oklahoma had enrolled in private plans through the exchange by February 22, when the 2015 open enrollment period and extension had ended. Total enrollment was far higher than the 90,000 HHS had predicted for the second open enrollment period – in fact, the exchange had already exceeded the projected target early in January.
54 percent of the 2015 enrollees were new to the exchange for 2015, while 46 percent already had a plan in 2014.
Some enrollees didn’t pay their inital premiums though, and others cancelled their coverage or it was terminated due to lack of immigration status documentation. By the end of June, effectuated enrollment in the Oklahoma exchange stood at 108,614 people. 80 percent were receiving for premium subsidies that average $207 per month.
In addition, 12,946 people in Oklahoma enrolled in Medicaid or CHIP through Healthcare.gov from November 15 to February 22. Medicaid/CHIP enrollment continues throughout the year.
Subsidies are safe…
On June 25, the Supreme Court issued a ruling in King v. Burwell, upholding subsidies in every state, regardless of whether the exchange is run by the state or federal government. Subsidies for 86,000 Oklahoma residents are safe, and the insurance market there is not going to head into a “death spiral.”
Actuaries had predicted that the elimination of subsidies would have increased premiums by 55 percent (in addition to the regular annual rate increases based on medical cost growth) even for people who don’t currently receive subsidies. For those who do currently get subsidies, premiums would have increased by an average of 243 percent in Oklahoma. Because coverage would have become unaffordable for so many people, the size of the individual market would have dropped by about 70 percent, leaving only the sickest insureds with coverage.
… despite state’s effort to take them away
But despite the disastrous outcome that would have resulted if the Supreme Court had eliminated subsidies in states like Oklahoma that use the federally-run exchange, Oklahoma was actively fighting to have the subsidies eliminated.
In late December, Oklahoma filed an amicus brief with the Supreme Court, urging the Court to side with King in the King v. Burwell hearing (ie, to do away with subsidies in states like Oklahoma that use Healthcare.gov). Five other states (Alabama, Georgia, Nebraska, South Carolina, and West Virginia) joined Oklahoma in filing the amicus brief. This is in contrast to Virginia, which headed a group of 18 states that filed an amicus brief in the similar Halbig v. Burwell case in November, but urging an opposite ruling, in favor of keeping the subsidies in all states regardless of who runs the exchange.
Oklahoma has also generated headlines because of a court ruling on the Oklahoma v. Burwell lawsuit over the legality of subsidies in states with a federally-run exchange. Oklahoma’s Attorney General, Scott Pruitt, initiated the lawsuit. Last fall, a federal judge in Oklahoma ruled that subsidies cannot be issued by exchanges that are run by the federal government, but can only be issued in the 17 states where the state is running the exchange. That case was presented to the Supreme Court, but they declined to hear it, and the ruling in King v. Burwell (ie, that subsidies are legal in the federally-run exchange) overrides the lower court’s decision in Oklahoma v. Burwell.
Following the Court’s ruling on the King case, Oklahoma Governor Mary Fallon expressed her disappointment: “The Supreme Court’s decision today in King v. Burwell means that taxpayers will be, for the time being, stuck with a law that is deeply flawed, disruptive to the lives of American families and a destructive force in our economy.”
2015 rates and carriers
In the HHS-run Oklahoma exchange, five carriers were initially slated to offer plans for 2015, up from four in 2014. Plans were to be available from Coventry/Aetna, Blue Cross Blue Shield of Oklahoma, and Time, as well as newcomers GlobalHealth and CommunityCare. But at the eleventh hour, Coventry/Aetna decided to only offer group plans, outside the exchange, with no individual market presence in Oklahoma in 2015.
Four carriers offered dental plans on the exchange: Best Life, Dentegra, Delta Dental, and Guardian.
Across the four existing exchange carriers, premium changes for 2015 ranged from a decrease of 9.1 percent to an increase of 29 percent. The weighted average was a 12.2 percent rate increase (as calculated by ACAsignups.net). But the addition of two new carriers helped to improve competition in the exchange and provide enrollees with greater plan choice.
If we focus just on the cheapest silver plans, Oklahoma is a good example of why it was so important to shop around for 2015 coverage – and continues to be important going forward. People with the cheapest silver plan from 2014 who are willing to shop around and switch to the cheapest silver plan for 2015 were able to obtain price decreases in most of the state. If they auto-renewed their 2014 plan however, their price went up instead.
How many people enrolled in 2014?
69,221 people in Oklahoma had finalized their private plan enrollment in the state’s exchange by April 19. The vast majority (about 60,000) of the private plans were sold by Blue Cross Blue Shield of Oklahoma, and the carrier reported that another 25,000 people purchased their ACA-compliant plans off-exchange.
Obamacare enrollment can continue year-round when qualifying events trigger special enrollment periods. When 2015 rates were announced in early September, the data included a mention of the fact that 73,071 people were currently covered under private plans through the Oklahoma exchange at HealthCare.gov. That’s an increase of nearly four thousand people over the summer, even after accounting for attrition.
According to a Gallup poll released in August, Oklahoma’s uninsured rate was 21.4 percent in 2013, and had fallen to 17.5 percent by mid-2014.
Oklahoma was already allowing insurers to renew existing pre-ACA policies into 2014 prior to President Obama’s announcement in November 2013 that states and carriers could renew – rather than terminate – plans that were not ACA compliant for another year. So the state has largely avoided widespread cancellations in the individual and small business markets.
Medicaid and Insure Oklahoma
By April 2014, 17,374 Healthcare.gov applicants were eligible for Medicaid or CHIP under existing rules (they were already eligible pre-2014, but not enrolled). Oklahoma is not participating in Medicaid expansion at this time. Instead, in early September 2013, the state negotiated with the federal government to get a one year extension for the Insure Oklahoma program. The state received a second extension in June, 2014 to keep Insure Oklahoma functional throughout 2015, and a third extension in June 2015 that will fund Insure Oklahoma through the end of 2016.
Insure Oklahoma subsidizes private health insurance for low income residents (up to 100 percent of poverty level – this is a decrease from the previous 200 percent limit that was in place prior to 2014), using tobacco taxes matched with federal funds that were scheduled to expire at the end of 2013 to make way for Medicaid expansion. The program still receives federal funds, but it now covers about 19,000 of the 30,000 people who were enrolled as of 2013, since Insure Oklahoma members with incomes above 100 percent of poverty were able to transition to the federally-run Oklahoma exchange instead (roughly 225,000 residents in Oklahoma would have benefited from the expansion of Medicaid).
Despite the fact that Oklahoma has not expanded Medicaid, the state’s program is facing a budget shortfall and in July 2014 announced a 7.75 percent cut in Medicaid reimbursement rates for providers, which will result in a $48 million savings for the state, but leaves providers facing reduced payments, even as they provide healthcare for more than 17,000 new enrollees in the state’s Medicaid program – a figure that continues to grow, despite the lack of Medicaid expansion (by June 2015, total enrollment in Oklahoma’s Medicaid/CHIP program was nearly 26,000 higher than it had been in 2013)
Political leadership’s opposition to the ACA
Gov. Mary Fallin announced in November 2012 that Oklahoma would not implement a state-run health insurance exchange. In the same press release, Fallin expressed her support for a lawsuit brought by Oklahoma Attorney General Scott Pruitt. The suit contends the federal government cannot enforce the employer mandate or dispense tax subsidies in a state that has not authorized an exchange.
On August 12, 2013, a federal judge denied the federal government’s motion to dismiss the case, and then on September 30, 2014, a federal judge sided with Pruitt and ruled that subsidies could not go to people in states with exchanges run by HHS. Similar cases were heard in other courts in the summer of 2014, and this issue is likely to eventually end up before the Supreme Court.
In addition to the lawsuit, on November 6 Pruitt joined AGs from nine other states in petitioning HHS Secretary Kathleen Sebelius to support “immediate legislative action” to correct various aspects of the ACA’s implementation. And in February 2014, Republican Rep. Jon Echols introduced HB3364, which would provide a state tax credit to offset any shared responsibility penalties (individual mandate) incurred by Oklahoma residents. The bill did not proceed any further than introduction however.
Not surprisingly, a study released in late January 2014 found that Oklahoma was one of just five states that were “diehard hold outs” with regards to the ACA – doing nothing at all to help implement the law. And heading into the 2015 legislative session, Oklahoma state Representative Mike Ritze, a family physician, is focused on doing “everything we can to try and reverse [the ACA]” through state-based legislation.
The road to a federally-run exchange
The Fallin administration state officials initially showed some openness to a state-run exchange — if only as a slightly less distasteful option than a federally operated exchange. The Oklahoma Joint Committee on Federal Health Care Law studied exchange options and issued its final recommendations in February 2012. The committee supported a state-run exchange open to small businesses, but not individuals. A bill for this type of exchange, which is similar to Utah’s exchange, was introduced but not passed in 2012.
In line with state leaders’ opposition to the ACA, Oklahoma is not actively marketing the exchange to residents. However, three state organizations have received grants to act as navigators: Cardon Outreach in Oklahoma City, Oklahoma Community Health Centers, Inc., and Little Dixie Community Action Agency, Inc.
HHS is running the exchange in Oklahoma. You can compare plan, determine subsidy eligibility and enroll in coverage at Healthcare.gov.
Oklahoma health insurance exchange links
State Exchange Profile: Oklahoma
The Henry J. Kaiser Family Foundation overview of Oklahoma’s progress toward creating a state health insurance exchange.
Oklahoma Insurance Department
Assists people insured by private health plans, Medicaid, or other plans in resolving problems pertaining to their health coverage; assists uninsured residents with access to care. (405) 521-2991 / Toll Free in OK: (800) 522-0071 / email@example.com