With six weeks left in open enrollment, 394,302 people had enrolled in private plans through the Pennsylvania exchange by December 19, including new and renewing enrollees. To put that in perspective, there were 397,967 people with in-force private plan coverage through the exchange as of mid-2015.
The December 19 total includes most people whose plans were auto-renewed for January, but those enrollees can still return to the exchange to pick a different plan for 2016. Plan selections made by January 15 will have coverage effective February 1, while plan selections made between January 16 and January 31 will have coverage effective March 1.
Open enrollment ends January 31. After that, coverage (including off-exchange coverage) for 2016 will only be available for people who experience a qualifying event that triggers a special enrollment period.
Insurers cut commissions
As is the case in many states, insurers in the Pennsylvania exchange have been losing money in 2014 and 2015. And the risk corridor payments that were supposed to make up some of the 2014 losses ended up being just 12.6 percent of what they were supposed to be. In an effort to avoid selling plans that aren’t proving to be profitable, some carriers in Pennsylvania have reduced or eliminated broker commissions for 2016.
Highmark insured nearly 60 percent of the people who enrolled in coverage through the Pennsylvania exchange in 2015. The carrier has cut broker commissions to zero in northeastern Pennsylvania, and has has cut commissions in the rest of the state to $6 per-member-per-month (down from $15 to $25 PMPM previously). Highmark has told brokers that they will reinstate commissions for 2017, but the carrier is clearly hoping to reduce sales for 2016 – particularly in northeastern Pennsylvania.
UPMC Health Plan has cut broker commissions by one-third, to $10 PMPM, for premium network individual plans, noting that “commissions and pricing are determined by competition and market dynamics.”
UnitedHealthcare will not pay broker commissions for any exchange enrollments submitted January 1, 2016 or later, in any of the 34 states where they offer plans in the exchange.
Cutting commissions has an immediate effect on sales, as brokers are less likely to work with carriers that aren’t paying them, or that are paying far less than other carriers. But this tactic allows the carriers to remain on the exchange (albeit with reduced sales) and keep their options open for sales the following year.
2/3 of uninsured are eligible for Medicaid or subsidies
In 2015, there were still 994,000 uninsured residents in Pennsylvania, according to the Kaiser Family Foundation. Two-thirds of them are eligible for either subsidies in the exchange or the state’s expanded Medicaid coverage. Nearly half – 477,000 people – are eligible for Medicaid, and 180,000 are eligible for premium subsidies to make private coverage more affordable.
Although the state has made considerable progress in reducing its uninsured rate there is still much work to be done. In September, the federal government awarded more than $3.1 million in Navigator grants to six organizations in Pennsylvania that will provide outreach and enrollment assistance through 2018.
On January 8, navigators will be on hand during an enrollment event at the district office of state Sen. Rob Teplitz (D-Dauphin County). The address is 46 Kline Village in Harrisburg, and the enrollment event will run from 1p.m. to 4p.m..
2016 rates and carriers
In mid-October, the Pennsylvania Insurance Department published final 2016 rates for the individual and small group markets, including plans that will be sold through the Pennsylvania exchange. At ACAsignups, Charles Gaba promptly crunched the numbers to determine the overall weighted average rate change for 2016, which came out to be 12 percent for the entire individual market (including four carriers that only offer off-exchange plans, although their total enrollment is less than a thousand people, out of nearly 427,000 in the whole individual market in Pennsylvania).
The 12 percent weighted average rate increase assumes that everyone will keep their current plan; that’s not likely, given the robust nature of the Pennsylvania insurance market. In the exchange, insureds will be able to select from among 15 different carriers, including Highmark Select Resources, which is new for 2016. Given the fact that some carriers are increasing their premiums by up to 26 percent, it’s likely that some consumers will find better deals by switching to another carrier for 2016.
Statewide, the average benchmark premium (second-lowest-cost Silver plan) is 10.9 percent more expensive in 2016 than it was in 2015. Premium subsidies are tied to the price of the benchmark plan, so average premium subsidies in Pennsylvania will be higher in 2016, offsetting much of the rate increase for many insureds. But it’s still in consumers’ best interest to shop around before open enrollment ends on January 31, and make sure that they’re on the plan that best meets their needs for 2016.
Carriers offering individual plans in the exchange for 2016 and their approved rate changes are as follows:
- Aetna: 5.6 percent rate increase
- Capital Advantage Assurance: 1.6 percent rate increase
- First Priority: 21.5 percent rate increase
- Geisinger Health Plan: 20 percent rate increase
- Geisinger Quality Options: 20 percent rate increase
- Highmark BCBS: 20.1 percent rate increase
- HM Health Insurance: 26.2 percent rate increase
- Keystone Health Plan Central: 1.4 percent rate increase
- Keystone Health Plan East: 1.9 percent rate increase
- QCC Insurance Company: 4.53 percent rate increase
- UnitedHealthcare: 5.6 percent rate increase
- UPMC Health Options: 9.7 percent rate increase
In most cases, the Insurance Department approved final rates that were slightly lower than the carriers had proposed, although rates for Geisinger will be significantly lower than proposed. Geisinger had requested a 58 percent increase for their Quality Options plans, and an increase of nearly 41 percent for their Geisinger Health Plan. But the final approved rate increases for both plans is 20 percent. HM Health Insurance, First Priority, and Highmark also all ended up with final rate increases at least five percentage points lower than they had proposed.
Only one carrier – QCC Insurance – ended up with a final rate higher than they had proposed (they requested a 2.8 percent rate increase, but regulators approved a 4.53 percent increase).
UPMC requested modest rate hikes for 2016, all below ten percent, and zero percent for their HMO. UPMC noted in their rate filings that their individual market share was just 4,000 enrollees in 2014, but increased to 58,000 in 2015 – likely as a result of their decreased premiums for 2015 (more details below). In Western Pennsylvania in 2016, UPMP will once again have the lowest rates in the exchange for silver plans.
Time Insurance is leaving the exchange after announcing in mid-2015 that they would exit the individual health insurance market nationwide.
Highmark: rates, merger, tiered networks
Highmark generated headlines last summer due to a relatively high initial rate filing (25.5 percent, which was ultimately reduced to 20.1 percent) coupled with the news of hundreds of millions of dollars in losses on exchange plans in 2014 and 2015. The rate proposal that Highmark filed earlier this year indicated that 71,981 people would be impacted by the new rates. But in June, Highmark merged with Blue Cross of Northeastern Pennsylvania, gaining new insureds in the process. The final rate approval document that the Insurance Department released indicated that Highmark’s new rate (an average of 20.1 percent higher than the current rates) will impact 117,857 insureds in the state.
The rate filing from Highmark was based on claims data through January 2015, but the carrier announced in September that they lost $318 million on exchange plans during the first half of 2015, up from about a $78 million loss during the first half of 2014. The higher losses during the first half of 2015 are not reflected in the 25 percent rate increase that the carrier requested for 2016 (for perspective, Highmark had revenue in 2012 that totaled $15.2 billion). Highmark noted earlier in 2015 that they would probably shift towards fewer plans and narrower networks in 2016, in an effort to reduce losses in the coming year; they confirmed that as open enrollment drew nearer.
Although the Insurance Department concurred that Highmark is losing money, they felt that a rate increase in excess of 25 percent would be too onerous for insureds, and instead proposed a 20.1 percent rate increase, but clearly stated that they expected Highmark to spread their rate hikes across successive years. Thus it’s likely that we could see another relatively sharp rate increase for Highmark next year, if current claims trends continue.
Leading up to the start of the third open enrollment period, Highmark announced that they would offer their Connect Blue plan to individuals starting in 2016; it’s already available to groups. Connect Blue is a low-cost, narrow network plan that divides providers into four tiers and gives consumers the lowest out-of-pocket costs for visiting preferred tier providers (in New Jersey, Horizon Blue Cross Blue Shield – a different company – has unveiled a similar program for 2016). In addition to offering the new Connect Blue plans, Highmark will also cease offering some of their previously-available plans at the end of 2015.
No transition to state-run exchange
On May 1, Pennsylvania Governor Tom Wolf announced that Pennsylvania had a contingency plan to create a state-run exchange if the Supreme Court ruled that subsidies could not be provided via the federally facilitated marketplace (Healthcare.gov). Pennsylvania is one of 37 states currently using Healthcare.gov, and subsidies hung in the balance for millions of enrollees in those states, including 382,000 people in Pennsylvania.
On June 15, Pennsylvania was one of three states that got conditional approval from the Obama Administration to operate a state-run exchange. Pennsylvania was the first state to officially announce that they’d create a state-run exchange if necessary in order to protect subsidies in the state. The state’s proposal called for a set-up similar to Oregon, Nevada, and New Mexico (and now Hawaii), with a state-run exchange that uses Healthcare.gov for enrollments.
But on June 25, shortly after the Supreme Court issued their verdict upholding subsidies in the federally-run exchange, Governor Wolf announced that the state would withdraw its proposal for a state-run exchange and continue using the federally-run exchange. This will be less expensive for the state, and there’s no longer a need for the transition to a state-run exchange, since subsidies will be available regardless of who runs the exchange.
2015 enrollment data
472,697 people enrolled in private plans through the Pennsylvania exchange during the 2015 open enrollment period (through February 22, including the week-long extension). HHS had projected 410,000 enrollees, so the exchange ended up with 115 percent of the projected total. Of the people who selected a plan during the 2015 open enrollment period, 41 percent were new to the exchange for 2015.
As expected, however, some enrollees didn’t pay their initial premiums, and others opted to cancel their coverage early in 2015 for a variety of reasons. By the end of March, 427,454 people had in-force coverage through the exchange in Pennsylvania. By the end of June, that total had dropped to 397,967, partially due to stepped-up enforcement of immigration/financial documentation in the federally-facilitated marketplace. Of those enrollees, 80.4 percent are receiving premium subsidies, and 55.3 percent are receiving cost-sharing subsidies.
An additional 126,853 people enrolleed in Medicaid or CHIP through the exchange between November 15 and February 22. Pennsylvania expanded Medicaid (under the Healthy PA program) in 2014, and newly-eligible resident were able to begin enrolling on December 1 (prior to December 1, people could still enroll if they were eligible under the old guidelines). Under Gov. Tom Wolf, the state is transitioning to straight Medicaid expansion as called for in the ACA (ie, no waiver needed). By July 27, Pennsylvania was reporting that 439,000 people had already enrolled in expanded Medicaid.
Open enrollment for 2015 is over, so most applicants can only purchase a plan for 2015 – on or off the exchange – if they have a qualifying event (Medicaid enrollment is year-round, and Native Americans can enroll in coverage through the exchange year-round as well). The next open enrollment period begins on November 1, but coverage won’t be effective until January 1, 2016.
More choices for enrollees in 2015
Pennsylvania’s federally-run exchange has 15 carriers offering plans for 2015. Three carriers that participated last year left the exchange, but four more – including giants Assurant (Time) and United Healthcare – joined the exchange, making Pennsylvania among the many states where consumer choice increased for 2015 (Assurant will not be participating in 2016 however, and they ceased sales of new policies nationwide on Jun 15, 2015).
15 insurers put Pennsylvania’s exchange near the top in terms of the total number of participating carriersn in 2015, but in some cases the total represents multiple affiliates of a single parent company. And most of the carriers focus on a single region rather than the whole state, so local competition will vary from one area to another. Nearly all regions of the state had at least three carriers available in 2014, and the overall trend is towards more consumer choice in 2015.
The ongoing story of PA Medicaid expansion
On August 28, 2014, Pennsylvania became the 28th state (including DC) to expand Medicaid under the ACA in an agreement reached with HHS after many months of discussion. Eligible enrollees were able to begin enrolling on December 1, for coverage effective January 1, 2015. Interest in the program was very high in the early days of enrollment. In the first two days alone, 41,500 people enrolled (30,000 of them did so through HealthCare.gov).
Then-Governor Tom Corbett’s office announced the details of the approved Healthy Pennsylvania program, and HHS released an extensive explanation of how the state’s Medicaid waiver would work (a waiver is required if a state is doing anything other than straight Medicaid expansion as laid out in the ACA). There were three plan options under Healthy PA: one for healthy enrollees, one for sick enrollees, and the third for the newly-eligible population with incomes up to 138 percent of poverty (as opposed to the single Medicaid program for all enrollees that the ACA’s straight Medicaid expansion uses)
But then on November 4, Democrat Tom Wolf defeated Corbett in the election, and took over as Governor in January 2015. Wolf has long been an advocate of fully expanding Medicaid under the ACA, without any state-specific waiver or modifications. It was unclear initially how the transition would play out, but Wolf said he would abandon Healthy Pennsylvania in favor of straight Medicaid expansion, and Democratic state lawmakers urged him to move quickly in doing so.
In February, Wolf began the process of moving away from Healthy Pennsylvania. The new system, HealthChoices, is the managed care system that Pennsylvania has used for years, although the benefits have been modified. But instead of three different plan designs, the new system has a single benefits package for all Medicaid enrollees. In late April, the state began transitioning people off of Healthy PA and onto HealthChoices, the change took effect on June 1.
Enrollees who were already on Pennsylvania Medicaid prior to the launch of Healthy PA, as well as new applicants, were in the first group of people transitioning to HealthChoices. The rest of the Healthy PA enrollees received notification of the transition over the summer, and their switch to HealthChoices was effective September 1. Enrollment in expanded Medicaid had grown to 439,000 people by July 27, 2015.
Consumers win when carriers compete
UPMC lowered its rates in Western Pennsylvania by a whopping 41 percent for 2015, meaning they are the lowest priced carrier in the western part of the state. UPMC expected to retain most of their 2014 enrollees and also gain market share in 2015 because of their competitive premiums – and that certainly ended up being the case, as they went from having 4,000 enrollees in 2014 to more than 50,000 in 2015 (according to their rate filing for 2016, the total ended up being 58,000).
Highmark Blue Cross Blue Shield garnered a third of the market share during the first open enrollment period (Highmark had 104,324 exchange enrollees, plus an additional 43,679 enrollees outside the exchange) and were priced significantly lower than other carriers in 2014. But Highmark has increased premiums by about 10 percent for 2015, and their network is narrower than it was in 2014.
In 2014, rates for coverage in the Pennsylvania exchange were lower than the national average. As of early November, across 13 carriers, PricewaterhouseCooper was reporting an average premium increase of 10.4 percent in Pennsylvania for 2015. And a Commonwealth Fund analysis published in December found an average rate increase of 12 percent in the Pennsylvania exchange, across all plans and metal levels, for a 40 year-old non-smoker.
Although automatic renewal for 2015 was possible for the majority of 2014 enrollees, it was generally a better choice to shop around and compare options during open enrollment. Ultimately, however, almost 161,000 people in Pennsylvania had their coverage auto-renewed for 2015.
The NY Times put together an analysis of how enrollees in the 2014 benchmark plan (second lowest cost silver plan) would fare for 2015, depending on whether they opted to renew their coverage or switch to the new benchmark plan. In Pennsylvania, there was a range of results, with enrollees in some areas eligible for rate decreases if they shopped around. But letting the benchmark plan automatically renew resulted in a rate increase in all areas of the state.
In a similar, but more specific analysis, the Kaiser Family Foundation looked at the average cost of the benchmark plan for a 40 year old enrollee in a major metropolitan area in each state. In the Philadelphia area, the average premium was decreasing by 10.7 percent in 2015.
Andrew Sprung, writing at Xpostfactoid, predicted that Pennsylvania would have a lot more people selecting Bronze plans in 2015 compared with 2014, and his explanation made a lot of sense. While the difference between the cheapest Silver plan and the cheapest Bronze plan in most areas of the county was usually at least $50 to $100 per month, in southeast Pennsylvania – the Philadelphia area – the difference was only $20 in 2014.
So people who were eligible for cost-sharing subsidies if they purchased Silver plans were more able to do so than in other parts of the country where there were Bronze plans that were very attractive because of their premiums, despite the fact that they didn’t include any cost-sharing subsidies. But for 2015, the difference in price from Bronze to Silver is much greater in the Philadelphia region, because there’s no longer a Silver plan priced well below the benchmark (second-lowest-cost) Silver plan (ultimately, 11 percent of Pennsylvania exchange enrollees have Bronze plans as of mid-2015).
2014 enrollment numbers
By April 19, 318,077 Pennsylvania residents had completed their private plan selections in the exchange, nearly double the number who had enrolled by March 1. By the end of the 2014 open enrollment period, private plan Obamacare enrollment in Pennsylvania was the fourth highest out of the 36 states where HHS is running the exchange (trailing Texas, Florida, and North Carolina).
In contrast with the national trend, Pennsylvania had more uninsured residents in 2012 than in 2011 – an increase of 156,000 people. But thanks to the ACA, the uninsured rate declined – albeit only slightly – during the first half of 2014. A Gallup poll found that the uninsured rate in the state was 11 percent in 2013, and had declined to 10.1 percent by mid-2014. By mid-2015, a similar Gallup poll found the uninsured rate to be 7.7 percent.
Prior to the first open enrollment period, Families USA estimated that almost 900,000 Pennsylvania residents would be eligible for tax credits to help them pay for coverage purchased through the health insurance exchange. During the 2014 open enrollment period, more than 257,000 people received tax credits (81 percent of the total exchange enrollment) in Pennsylvania.
Although expanded coverage didn’t take effect until 2015, 42,335 exchange applicants had been found to be eligible for Medicaid or CHIP under the state’s existing 2014 guidelines by mid-April 2014. There is no open enrollment window for Medicaid; enrollment continues year-round.
Pennsylvania is among the states that allowed pre-2014 plans to be renewed again and remain in force as late as 2017, at the discretion of health insurance carriers.
Pennsylvania allowed insurers to extend existing 2013 policies into 2014 following the policy cancellation compromise that President Obama offered in mid-November 2014. Prior to the President’s announcement, a quarter of a million Pennsylvania residents – about one third of the individual market in the state – had received cancellation notices. By the end of November, two Pennsylvania carriers had agreed to extend some existing policies – including one guaranteed-issue, limited benefit plan for low-income residents – for at least the first few months of 2014.
Despite the fact that policies slated for cancellation were allowed to be extended, and the fact that nearly 160,000 people had enrolled through the exchange by March 1 – and another 42,500 off-exchange through just one carrier – then-Governor Tom Corbett continued to criticize Obamacare, focusing on the fact that supposedly, 250,000 people were “losing their health coverage due to the ACA.” Corbett was opposed to the ACA from the get-go, and relied on his Obamacare opposition during his campaign to win reelection in PN. Ultimately, he was defeated by Tom Wolf, who took office in January 2015.
Community Blue, UPMC network controversy
During the 2014 open enrollment period, Highmark BCBS enrolled a total of 148,003 members in Pennsylvania, and 80 percent of them – about 120,000 people – chose a Community Blue plan. 33 percent of the total private plan enrollment within the exchange in Pennsylvania was with Highmark, and the majority of them selected a Community Blue plan.
There was some confusion surrounding the Community Blue network, as the new plans do not include UPMC providers. Community Blue offered insureds a transition period to have one final visit with a UPMC provider, or to complete (out-of-network) appointments that were scheduled before the end of December 2013.
In early March 2014, the transition period ended, and Community Blue plans no longer provide coverage for UPMC facilities or providers. If you have a UPMC provider and a new Community Blue policy, be sure to check with your carrier and your provider to make sure that you know what providers are in your network.
This issue has caused considerable consternation in Pennsylvania in 2014. The state Senate decided in late June to allow senators, staff and retirees in 29 western Pennsylvania counties to opt for either a UPMC policy or a Highmark plan so that they can continue to receive care at a UPMC facility if that’s their choice.
In December 2012, Gov. Corbett announced Pennsylvania would use the federal health insurance exchange rather than implementing a state-run exchange. Corbett said the U.S. Department of Health & Human Services had failed to provide adequate information, making it irresponsible for the state to proceed on its own. Thus HHS is running the exchange in Pennsylvania. You can use Healthcare.gov to get quotes, compare plans, determine subsidy eligibility and enroll in coverage.
Leading up to the December announcement, Corbett had repeatedly indicated his administration preferred a state-run exchange, and feedback gathered by a consultant showed broad-based public agreement. Corbett’s administration proposed establishing several, regional exchanges. However, consumer groups and legislators did not support the concept.
Although the state government has not involved itself in promoting the exchange, $7 million in federal funds went to various organizations around the state that served as navigators to assist people during the first open enrollment, for 2014 plans. $2.4 million in funding was provided to Navigator organizations in Pennsylvania for the second open enrollment period. Prior to the third open enrollment period, six navigator organizations in the state received $3.1 million to fund enrollment efforts through the summer of 2018.
Pennsylvania health insurance exchange links
State Exchange Profile: Pennsylvania
The Henry J. Kaiser Family Foundation overview of Pennsylvania’s progress toward creating a state health insurance exchange.
Operated by the Pennsylvania Health Department
Health Care Section, Office of the Attorney General
Serves Pennsylvania consumers with health-related problems.
(717) 705-6938 / Toll-free: 1-877-888-4877 (only in Pennsylvania)
Pennsylvania Consumer Assistance Program
Assists people with private insurance, Medicaid, or other insurance with resolving problems pertaining to their health coverage; assists uninsured residents with access to care.
(877) 881-6388 / email@example.com