Frequently asked questions about health insurance
coverage options in Alabama
Alabama uses the federally facilitated health insurance marketplace, so residents use HealthCare.gov to enroll in exchange plans and to receive financial assistance with their coverage (premium subsidies, which reduce monthly premium costs, and cost-sharing reductions, which reduce deductibles, copays, and coinsurance expenses; both types of subsidies were created as part of the Affordable Care Act, also known as Obamacare).
The marketplace is used by individuals and families who need to obtain their own health insurance (most Americans get their coverage from an employer or from the government — Medicare or Medicaid — and thus do not need to use the marketplace in Alabama). People who buy their own health insurance include those who are self-employed, those who are employed by a small business that doesn’t offer health benefits, and those who have retired prior to Medicare eligibility.
Open enrollment in Alabama for 2021 coverage ended on December 15, 2020. The open enrollment period for 2022 coverage will run from November 1 through December 15, 2021.
Outside of that open enrollment period, residents need a qualifying event in order to enroll in coverage or make a change to their plan.
Two carriers – Blue Cross Blue Shield of Alabama and Bright Health – offer plans through the exchange in Alabama.
For 2022, UnitedHealthcare will join them, bringing the total number of participating insurers to three. UnitedHealthcare previously participated in the Alabama exchange, but exited at the end of 2016.
In Alabama, average premiums increased by about 5.4% for 2021 (but much more sharply for the people who have Bright Health), after increasing by about 3% in 2020 and decreasing slightly in 2019.
For 2022, Blue Cross Blue Shield of Alabama has proposed a 7% average rate increase, while Bright Health has proposed an average decrease of about 15%. UnitedHealthcare is new to the market, so they don’t have any applicable rate changes.
169,119 people enrolled in private individual market plans through the Alabama exchange during open enrollment for 2021 coverage. This was an increase of more than 5% over 2020 enrollment, and was also higher than 2019’s enrollment.
See a summary of how enrollment has changed in Alabama’s exchange over the years.
While it may not be seeing the nation’s largest improvements, Alabama is seeing improvements under the Affordable Care Act. According to US Census data, the uninsured rate in Alabama in 2013 was 13.6%, and that had fallen to 9.1% by 2016 — although it had increased to 10% by 2018. But it dropped slightly, to 9.7% in 2019 (there was a nationwide uptick in the uninsured rate under the Trump administration, which continued in 2019; Alabama bucked that trend, with an uninsured rate that decreased from 2018 to 2019).
The national uninsured rate was 8.9% in 2018, but Alabama’s rejection of Medicaid coverage expansion leaves more than a hundred thousand residents without any realistic access to medical coverage, and results in an uninsured rate that’s significantly higher than it would otherwise be. A 2020 analysis by the Robert Wood Johnson Foundation estimated that if Alabama were to expand Medicaid coverage, the state’s uninsured rate would drop by 43% — the largest projected drop among all of the states that have not yet expanded Medicaid.
The vast majority (90%) of Alabama residents who enrolled in qualified health plans (QHPs) through Alabama’s health insurance marketplace (i.e., Healthcare.gov) in 2021 received financial assistance to cover a significant portion of their premiums — and that was before the American Rescue Plan increased premium subsidies and made them more widely available.
As of the end of open enrollment, before the American Rescue Plan took effect, average 2021 premium subsidies in Alabama in 2021 amounted to $672 per month (covering the majority of the average $729/month premium). Subsidies are now larger for 2021, and will remain larger for 2022 as a result of the ARP.
In 2010, Alabama’s Congressional delegation opposed the health reform law. Senators Jeff Sessions and Richard Shelby both voted no on the law while six Alabama representatives voted no in the House.
Sessions was subsequently appointed Attorney General by President Trump, and a highly watched special election resulted in Doug Jones — a Democrat — winning Sessions’ former seat. Sessions resigned as Attorney General in 2018; he ran for his old Senate seat in 2020, but was defeated in the primary by Tommy Tuberville. Tuberville ultimately won the general election, defeating Jones and resulting in Alabama once again having two Republican Senators.
In the House of Representatives, Alabama has six Republicans and one Democrat. All of Alabama’s Republican Representatives voted yes on the American Health Care Act, which was the 2017 legislation that would have repealed major portions of the ACA. That bill ultimately died when it failed to pass in the Senate.
At the state level, then-Governor Robert Bentley indicated early on that he would support a state-based health insurance exchange, but ultimately sided with the state legislature, which decided to cede exchange control to federal government. Bentley was replaced in 2017 by Gov. Kay Ivey, who is strongly opposed to the ACA. The state has not accepted federal funding to expand Medicaid coverage under the ACA.
Alabama has not accepted federal funding to expand Medicaid under the ACA. An estimated 324,000 Alabamans would gain coverage if the state were to accept federal funding to expand the program.
The federal government covers 90% of the cost of Medicaid coverage expansion in the states that have accepted the funding. But Alabama is among the shrinking minority of states that continue to reject Medicaid expansion. As a result, there are 127,000 Alabama residents who live in poverty and have no realistic access to health coverage (many of the people who would become eligible for Medicaid plans under expansion are people with income between 100% and 138% of the poverty level, who are currently eligible for premium subsidies in the exchange; people with income below the poverty level are currently in the coverage gap in Alabama and any other state that hasn’t expanded Medicaid).
Read more about Alabama’s Medicaid expansion.
Alabama doesn’t have state regulations for short-term health insurance plans, so the state defaults to the federal regulations, which were relaxed in 2018 by the Trump administration. That means short-term health insurance plans are allowed to have initial terms up to 364 days, and total duration – including renewal – of up to 36 months.
Read more about short-term health insurance in Alabama.
There were 1,062,422 Alabama residents enrolled in Medicare plans as of January 2021. Most were eligible due to age, but 22% of Alabama Medicare beneficiaries are under the age of 65 and eligible for Medicare due to a disability. Nationwide, an average of 15% of Medicare beneficiaries are under age 65; Alabama is tied with three other states that have the highest percentage of disabled Medicare beneficiaries.
Alabama Medicare recipients can opt to enroll in Medicare Advantage plans or Original Medicare — both options have pros and cons. Medicare enrollment in Alabama is split almost exactly equally between Medicare Advantage and Original Medicare, with about 531,000 beneficiaries with each type of coveage.
In 2018, about 35% of Alabama Medicare beneficiaries were enrolled in stand-alone Medicare Part D plans, which provide prescription drug coverage. Most Medicare Advantage plans include Part D coverage, so most people who purchase stand-alone Part D plans are enrolled in Original Medicare.
Read more about Medicare enrollment in Alabama, including the state’s rules for Medigap plans.
- Alabama Department of Insurance — Licenses and oversees health insurance companies, agents, and brokers; can provide assistance to consumers who have questions or complaints about entities the Department regulates.
- AIDS Alabama/Enroll Alabama — The federally-funded Navigator organization in Alabama
- Alabama State Health Insurance Assistance Program — A local service that provides assistance and enrollment counseling for Medicare beneficiaries
- Alabama Medicaid Agency
- All Kids – Alabama Public Health
Recent Alabama legislation related to healthcare reform:
- SB147 was signed into law and became Act Number 2015-227 in May 2015. This legislation ensures that insurance executive compensation in Alabama will be kept confidential. As such, it is not subject to open records requests, Freedom of Information Act (FOIA) requests, or subpoena.
Before the ACA reformed the individual health insurance marketplace, coverage was underwritten in nearly every state, including Alabama. Because pre-existing conditions were a factor in eligibility for coverage, some people were unable to purchase a private plan at all, or were only able to get one that excluded their pre-existing conditions.
The Alabama Health Insurance Plan (AHIP) was created in 1998 to give applicants an option for coverage if they were ineligible to purchase individual health insurance because of their medical history. But unlike risk pools in many other states, AHIP was only available to applicants who were HIPAA eligible, coming off of a group plan with no more than a 63-day gap in coverage.
Under the ACA, all new health insurance policies became guaranteed issue starting on January 1, 2014. Once private insurance companies could no longer reject applicants or charge them higher premiums based on their medical history, it largely eliminated the need for high risk pools and MCHA stopped enrolling new members as of January 1, 2014. In March 2014, the Alabama Senate passed SB 123, allowing AHIP to “cease operations upon allowing current participants enough time to transition out of the plan.” By 2017, the AHIP website was no longer operational.