Utah health insurance exchange / marketplace

Humana exiting; Average unsubsidized rate hike = 31%

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  • healthinsurance.org contributor
  • October 13, 2016

Utah uses the federally-run marketplace (Healthcare.gov) for individuals, but has its own SHOP exchange for small businesses, called Avenue H.

As of March 2016, there were 164,415 people with private plans (QHPs) in the individual market through the Utah exchange, up from 128,220 a year earlier.

Open enrollment for 2017 coverage will being November 1, 2016, and will continue until January 31, 2017. To have coverage effective January 1, applicants will need to enroll by December 15.

2017 rates and carriers

There are four carriers that offer plans in the Utah exchange in 2016. But Utah Insurance Department has confirmed that Humana will not be offering any individual market health insurance plans in 2017, although they will have individual dental plans available, and off-exchange small group plans.

The other three exchange carriers will continue to offer plans in the exchange in 2017, and will have the following average rate increases for 2017 (total enrollment for each carrier is based on rate filings for 2017, and includes on and off-exchange membership):

  • Molina (HMO): 37.2 percent (up from the initially-requested 33.8 percent that Molina filed). Molina has 31,892 enrollees
  • SelectHealth (HMO): 30.1 percent (approved as-requested). SelectHealth has 132,208 enrollees
  • University of Utah Health Plans (PPO): 4.47 percent (approved as-requested). UUHP has 1909 enrollees according to their rate filing. And although their overall rate change is very modest, there’s tremendous variation from one plan to another, with actual rate changes varying from a 41 percent decrease to a 63 percent increase.

So for the three carriers that will offer individual plans in the exchange in Utah in 2017, the weighted average approved rate increase—across on and off-exchange enrollment—is 31.1 percent. The Utah Insurance Department has a comprehensive website explaining the rate review process, and rates for a 21-year-old for each plan in each county (the rates don’t take subsidies into account; after subsidies, rates are lower).

More than 88 percent of Utah’s exchange enrollees are receiving premium subsidies. Those subsidies will offset much of the premium increase for 2017, assuming enrollees are willing to shop around during open enrollment and possibly switch plans if necessary in order to get the best value. For enrollees who don’t receive premium subsidies—which includes everyone enrolling outside the exchange—rates are likely to be quite a bit higher in 2017 than they were in 2016.

But that has to also be viewed in light of the fact that Utah’s 2016 premiums are far lower than the national average.

2016 premiums well below national average

Once plan selections for 2016 were finalized, 86 percent of Utah exchange enrollees qualified for premium subsidies. Their average pre-subsidy premium is just $271/month, which is by far the lowest of the 38 states that use Healthcare.gov (the second-lowest is Arizona, at $324/month). Jaakob, Sundberg, an actuary for the Utah Department of Insurance, explained that health insurance coverage in Utah “was definitely underpriced prior to this [2017 rate hikes]” and said that the 2017 rates are the first time he’s seen appropriate pricing for ACA-qualified plans in Utah.

The average pre-subsidy premium across the 38 Healthcare.gov states is $396/month. For those receiving subsidies in the Utah exchange, the average after-subsidy premium is just $84/month, which is also lower than the $106/month average across all Healthcare.gov states.

By the end of March, 88.4 percent of effectuated enrollees were receiving premium subsidies. At that point, the subsidies averaged just $187 per month, which was far lower than the $291 per month national average subsidy amount. Across the country, only DC and New York have lower average subsidy amounts (New York has a Basic Health Plan, which provides coverage for people who would instead receive substantial subsidies if they lived in other states).

For reference, the average pre-subsidy premium in the Utah exchange in 2015 was also the lowest of all the Healthcare.gov states, at $248/month. But the average after-subsidy premium in the Utah exchange in 2015 was $89/month – slightly higher than it is in 2016. Although subsidies offset much of the increased rates for 2016, people also have the option of switching to lower-priced plans, which explains the even lower after-subsidy average premium in 2016.

2016 effectuated enrollment up 28% over prior year

According to a recent WalletHub study, Utah ranked 37th in the US in terms of the percentage of its residents who had health insurance in 2014. With 12.5 percent of Utah residents lacking health insurance at that point, the state still had a long way to go towards meaningful health reform. Expanding Medicaid would make a significant impact, but according to Kaiser Family Foundation data, 27 percent of Utah residents who were uninsured in 2015 were actually eligible for premium tax credits through the exchange.

But private plan enrollment in the Utah exchange in 2016 is more than double what it was in 2014, and new enrollees account for a significant portion of the 2016 enrollment. 175,637 people enrolled in private plans through the Utah exchange during the 2016 open enrollment period, including new enrollees and renewals. By the end of March, effectuated enrollment stood at 164,415.

During the 2015 open enrollment period, total enrollment reached 140,612 by the end of open enrollment. Effectuated enrollment as of March 2015 was 128,220. So effectuated enrollment at the end of the first quarter of 2015 was 28 percent higher than it had been a year earlier.

Arches Health Plan closed at the end of 2015

On October 27, 2015 – just five days before the start of the 2016 open enrollment period – the Utah Department of Insurance announced that Arches Health Plan (an ACA-created CO-OP) had been placed in receivership and state regulators would oversee the winding down of the carrier’s operations. Existing members – roughly a quarter of Utah’s exchange enrollees in 2015 – had to select coverage from another carrier in order to have coverage in place on January 1.

Any Arches members who did not select a new plan for 2016 were uninsured as of January 1. But open enrollment continued until January 31, and people who lost coverage qualify for a special enrollment period that continues for 60 days after the loss of coverage. So former Arches members technically have until February 29 to pick a new plan.

2016: two other carriers out, one in

In addition to Arches closing their doors, two smaller carriers in Utah exited the exchange at the end of 2015 (for all three carriers, the risk corridor shortfall announced in October 2015 was a major factor). Bridgespan and Altius (Coventry/Aetna) are continuing to offer plans outside the exchange in Utah, but not in the exchange.

University of Utah Health Plans has joined the exchange for 2016. UUHP is available in nine counties: Salt Lake, Utah, Weber, Davis, Tooele, Box Elder, Wasatch, Morgan and Summit.

With three carriers leaving the exchange and one joining, Utah has a total of four carriers offering individual plans through the exchange in 2016:

  • Humana Medical Plan of Utah
  • Molina
  • SelectHealth
  • University of Utah Health Plans

Plan availability varies from one part of the state to another. In Salt Lake City, for example, plans are available from all four carriers. But in Moab, only SelectHealth offers plans in the exchange. That’s the case in 20 of the state’s 29 counties, as SelectHealth is the only carrier that offers plans state-wide.

2016 rates

Just prior to the start of the 2016 open enrollment period, the Utah Insurance Department published a list of rates that would be charged to a 21-year-old (pre-subsidy) for each plan available in each county, including both on and off-exchange plans.

For the three carriers that offered plans in 2015 and are continuing to offer exchange plans in 2016, average rate changes were:

  • Humana (HMO): average rate increase of 24%
  • Molina: average rate decrease of 0.34% (Molina’s average rate also decreased for 2015, by an average of 11.84%)
  • SelectHealth: average rate increase of 16.7%

For exchange enrollees who had coverage from Altius, Arches, or BridgeSpan in 2015, shopping around prior to December 31 was essential. All Arches plans ended on December 31, and BridgeSpan’s on-exchange plans terminated on December 31 as well (enrollees had the option to stay with BridgeSpan by re-enrolling with them outside the exchange, but no subsidies were available in that case).

Although it’s no doubt frustrating to find out that one’s health insurer is exiting the exchange or the entire market, it may be of some consolation to know that rates were going to increase sharply for Altius, Arches, and BridgeSpan if they had remained available. Here are the rates the three carriers had proposed before making their decisions to exit the market or the exchange:

  • Altius proposed an average rate increase of roughly 18 percent, with 11,000 insureds (on and off-exchange).
  • Arches Mutual proposed an average rate increase of 58 percent (POS) and 47 percent. Arches had roughly 32,000 on-exchange members.
  • BridgeSpan proposed an average rate increase of 26.9 percent across all plans (about $67 per member per month)

But even for enrollees who had 2015 coverage with Humana, Molina, and SelectHealth, it was important – as always – to shop around during open enrollment. Rate fluctuations and the introduction of a new carrier in nine counties might mean that the carrier and/or plan that presented the best value in 2015 was replaced by a competitor for 2016.

Average benchmark premiums (second-lowest-cost plan premiums) increased by 15.8 percent in Utah for 2016, which means subsidies are higher this year than they were last year, helping to offset some of the rate hikes that insureds would otherwise have had to pay. The benchmark rate increase in Utah was more than double the national average, but changes in benchmark premiums don’t give us the full picture of how rates have changed, since the benchmark plan itself isn’t necessarily the same plan from one year to the next.

Off-exchange carriers

In addition to the exchange options, nine carriers are offering plans outside the exchange in 2016:

  • Altius Health Plans (Aetna)
  • BridgeSpan Health Company
  • Humana
  • Molina Healthcare of Utah
  • National Foundation Life Insurance Company
  • Regence Blue Cross Blue Shield of Utah
  • SelectHealth Inc.
  • UnitedHealthcare
  • University of Utah Health Plans

Healthcare sharing ministries

Members of recognized healthcare sharing ministries that have been in existence since at least 1999 are exempt from the ACA’s individual mandate. Despite the fact that healthcare sharing ministry programs are not technically health insurance, their members do not have to pay a penalty for being without health insurance. Since these plans do not have to cover many of the things that are mandated for health insurance under the ACA, the monthly membership fees are typically lower than health insurance premiums, particularly for people who don’t qualify for premium subsidies in the exchange.

In Utah, Medi-Share – one of the largest healthcare sharing ministries in the US – has seen its membership grow five-fold in Utah since the ACA was implemented. HB113 was passed by the Utah House in February 2016, but did not advance in the Senate. It called for healthcare sharing ministries to be exempt from regulation by the Utah Insurance Department. Insurance Commissioner Todd Kiser is opposed to the bill, and notes that healthcare sharing ministries don’t actually provide their members with a guarantee that coverage will be there when they need it.

BYU student plan not compliant with ACA

The health insurance plan that BYU offers to students is not compliant with the ACA, and university officials have said there are currently no plans to bring the coverage into compliance. The requirement that health plans cover contraception is “one of the factors” that led the school to opt not to switch to a health plan that’s compliant with the ACA. The school had an exemption from complying with the ACA’s requirements until September 2015.

Roughly 30 percent of the university’s 27,000 students are enrolled in the school’s health plan. If they’re not exempt from the ACA’s individual mandate penalty, they’ll owe a penalty when they file their taxes (annually, the fee in 2015 was $325 per uninsured adult or 2 percent of taxable household income, whichever is greater, and has increased for 2016 to $695 per uninsured adult or 2.5 percent of income, whichever is greater; but the penalty is pro-rated based on the number of months without coverage).

But since Utah hasn’t expanded Medicaid, any adults in the state with household incomes under 138 percent of the federal poverty level are exempt from the penalty. Young adults also have the option to remain on a parent’s health insurance plan until they turn 26, which is an option that many college students utilize.

The University of Utah, which has 31,500 students, has brought their student health plan into compliance with the ACA.

2015 enrollment

140,612 people had enrolled in private health plans in the Utah exchange as of February 22, 2015. 71,959 of those enrollees were renewing plans from 2014, including 33,840 who “actively” renewed their coverage (as opposed to auto-renewal). Total enrollment for 2015 – including renewals – was about 166 percent of the total enrollment in the exchange at the end of the 2014 open enrollment period.

By the end of June, effectuated enrollment in the Utah exchange stood at 126,784 people. Attrition is a normal part of the individual health insurance market, and some enrollees never paid their initial premiums, meaning that their coverage wasn’t effectuated in the first place. In the second quarter of 2015, HHS stepped up their enforcement of immigration/financial requirements to maintain coverage and/or subsidies in the exchange, resulting in additional reductions in effectuated enrollments.

Of the 126,784 people who had in-force coverage in private plans through the Utah exchange as of June 30, nearly 66 percent qualified for premium subsidies (this is a significant reduction over the 88 percent of original enrollees who qualified for subsidies, suggesting that most of the attrition since the end of open enrollment has been among people who initially qualified for premium subsidies).

Between November 15, 2014 and February 22, 2015, another 29,017 exchange enrollees in Utah were eligible for Medicaid or CHIP, based on the pre-ACA eligibility guidelines that are still in use in Utah. The state has been actively working to expand Medicaid for the last few years, but for now, eligibility remains unchanged from where it was prior to ACA implementation.

King v. Burwell – Utah subsidies safe

Subsidies are safe for 107,000 people in Utah following the Supreme Court’s 2015 ruling that subsidies are legal in every state, regardless of whether the state or HHS is running the exchange. Utah is among the states where premiums for existing subsidy recipients would have increased the most significantly – by an average of 520 percent –  if subsidies had been eliminated. Many of those people would have had no option but to join the ranks of the uninsured if their coverage had become unaffordable.

In addition, the American Academy of Actuaries had projected that premiums for everyone in the individual market in impacted states would have increased by at least 35 percent, meaning that even people who aren’t receiving subsidies are much better off now that the Court has upheld subsidies in every state.

Utah already had a state-run exchange for small businesses (Avenue H), but has always used the federally-run exchange (Healthcare.gov) for individuals. Leading up to the Supreme Court ruling, state lawmakers did not appear eager to make changes to the state’s current exchange set-up, although it was a possibility if subsidies had been eliminated in the federally-run exchange. Thanks to the Court’s ruling, it’s no longer an issue, as subsidies are available either way.

But Governor Herbert is no fan of Obamacare, and although he’s pushed for Medicaid expansion (noting that not expanding Medicaid is leaving federal dollars on the table instead of putting them to work for Utah residents), he expressed disappointment following the Supreme Court’s ruling to preserve subsidies.

2015 rates

Overall, individual rates in the Utah exchange increased by an average of just 5.7 percent for 2015 (an analysis by the Commonwealth Fund puts the increase slightly lower, at 5 percent). For small groups, the average increase was even smaller, at 3.5 percent. Rate increases were slightly higher in rural areas (about 7 percent), but overall, the state saw a respite from the double digit rate hikes that had been common for many years. Across the entire individual market, including on and off-exchange policies, the weighted average rate increase in Utah was 7.6 percent for 2015.

The modest rate increases were especially good news considering rates in Utah were already lower than the national average. For 2014 plans, across all age groups, the average lowest cost bronze plan in Utah was $201/month before subsidies, compared with a national average of $249.

A report released in February 2014 found that Davis and Salt Lake were among the least expensive regions to purchase health insurance in the US in 2014; the two county region ranked 7th on a list of the ten least expensive health insurance areas.

The benchmark plan (second lowest cost silver plan) in most areas in Utah in 2015 was only slightly more expensive than the benchmark plan in 2014, and in some cases, even less expensive. But the Salt Lake area was an exception according to a November report issued by the NY Times. They found that the benchmark plan in the Salt Lake area was an average of 14.3 percent more expensive in 2015 than it was in 2014. On the other hand, a Kaiser Family Foundation analysis published in November 2014 found that a 40 year old enrollee in Salt Lake would pay just 2.7 percent more for the benchmark plan in 2015 compared with the benchmark plan in 2014.

2014 enrollments

As of April 19, 2014, the number of people who had finalized their private plan selections in the Utah exchange had grown to 84,601. An additional 50,268 people had enrolled in the state’s existing Medicaid program through the Utah exchange by April 19.

In June 2014, HHS released a report showing the average pre-subsidy and after-subsidy premiums in each of the 36 states that have federally-facilitated marketplaces (FFM). Utah had the lowest average pre-subsidy premiums, at $243 per month (the next lowest was $272 per month in Arizona, and rates reached as high as $536 per month in Wyoming).

But in a demonstration of how well the ACA’s premium tax credits level the field when it comes to health insurance premiums, the 86 percent of Utah enrollees who received a subsidy paid an average after-subsidy premium of $84 in 2014, nearly the same as the $82 average across all 36 FFMs.

Enrollment assistance available

The Utah Health Policy Project and the Urban Indian Center of Salt Lake were both awarded navigator grants (totaling almost $921,000) by CMS in 2015, to fund navigator enrollment and outreach through 2018.

Endless debate on Medicaid expansion

The Medicaid expansion debate in Utah has been long and winding, and is still ongoing. In October 2014, Governor Gary Herbert announced that he had reached a deal with HHS – after months of negotiations – to expand Medicaid in Utah using his “Healthy Utah” approach that would be unique to the state rather than following the guidelines laid out in the ACA.

Governor Herbert’s proposal was similar to the plan that state leaders ultimately settled on in July 2015, incorporating aspects of programs that have been implemented in several other states, including Iowa, Arkansas, and Pennsylvania.  Healthy Utah would have been a privatized version of Medicaid expansion, using Medicaid funds to purchase private insurance through the exchange for eligible enrollees (those between 100% and 138% would have paid a small portion of the premiums).

In December 2014, Governor Herbert unveiled his proposal for the state legislature.  But in mid-December, the Utah Legislature’s Health Reform Task Force opted against recommending Healthy Utah to the general assembly, and instead proposed their own version of Medicaid expansion, known as Utah Cares.  Their option is more expensive (because it wouldn’t benefit from the generous federal funding that Healthy Utah would), and would cover only a fraction of the people who would be covered by Herbert’s plan.  Essentially able-bodied adults would still be ineligible for Medicaid under the Task Force’s plan – coverage would only be available for people who are mentally ill, too sick to work, or disabled.

Ultimately, the legislature didn’t approve either option during the 2015 session, so there was no forward progress for Healthy Utah or Utah Cares.  Governor Herbert insisted that the state find a way to use the federal Medicaid expansion funds to provide healthcare for low-income Utah residents, and he assembled a group of four leaders from the state legislature to meet during the summer and work out a compromise. In July 2015, they announced that they had reached an agreement on a Medicaid expansion proposal. Governor Herbert, Lt. Governor Spencer Cox, and legislative leaders had worked out a plan to use Medicaid funds to purchase private coverage for newly-eligible Medicaid enrollees.  The plan was a replacement for Herbert’s Healthy Utah plan and the House’s Utah Cares plan – neither of which were approved by lawmakers during the 2015 legislative session.

Once Governor Herbert and the legislative leaders agreed on the concept of Medicaid expansion, they had to work out the financial details.  In mid-September, specifics began to emerge, including their proposal that taxpayers cover $25 million of the cost of covering “woodworkers” once Medicaid is expanded (the term woodworkers is used to describe people – mostly children – who are already eligible for Medicaid but not enrolled, and who enroll once the coverage is expanded.  Their benefits are funded at the regular federal/state split, rather than the more generous federal/state split that applies to newly eligible Medicaid enrollees).

The state still needed to submit a waiver to HHS and receive approval in order to obtain federal Medicaid expansion funding; they also had to receive legislative approval for the plan, and they needed hospitals and pharmaceutical companies to agree to financially back the plan, since it relied on them to fund the state’s portion of the Medicaid expansion cost (the federal government will always pay at least 90 percent of the cost of expansion, but starting in 2017, states are on the hook for a small percentage of the cost of Medicaid expansion).

But in October 2015, lawmakers overwhelmingly rejected the new compromise on Medicaid expansion, essentially putting the state back to square one in terms of working out a solution. In February 2016, Republican Represenative Jim Dunnigan introduced HB437, which would only expand Medicaid to about 16,000 of the poorest residents in Utah. And in January 2016, Democratic Senator Gene Davis introduced SB77, which calls for full expansion of Medicaid (the Utah Political Capital reports that SB77 calls attention to the need for expansion, but notes that there is “not even a smidgen of hope” that the bill will pass). Both bills are in committee as of late February 2016.

Gov Herbert: anti-ACA, but a proponent of Medicaid expansion

Utah has been politically divided on the ACA, with some lawmakers championing HCR10, a non-binding resolution detailing the “devastating impacts of the ACA” that was signed by Governer Herbert in April 2013.  But in January 2014, Gov. Herbert announced that Utah would look for a way to expand Medicaid, saying that “doing nothing is not an option” and noting that there are 60,000 people in Utah who would be left in a coverage gap if the state did not expand Medicaid (a University of Utah study in 2014 pegged this number at 77,000 people, and Kaiser Family Foundation data puts it at 41,000 people).

Gov. Herbert’s “block grant” approach to Medicaid expansion failed to win enough support in the 2014 legislative session in Utah.  But the governor kept working with HHS to get his plan approved, and neighboring states have been watching his progress to see if a similar approach might work for them too.

In late June 2014, a poll indicated that 88 percent of Utah residents favored Gov. Herbert’s “Healthy Utah” plan over doing nothing at all to assist low-income residents in securing health insurance.  And 70 percent of the poll respondents prefer the Governor’s privatized version over a straight Medicaid expansion as outlined in the ACA.

But even though an overwhelming majority of the state’s population would like to see some form of Medicaid expansion, expansion of the program is still uncertain given that it must be approved by state lawmakers.  Unfortunately, that leaves tens of thousands of Utah residents in the coverage gap, unable to qualify for Medicaid, and also ineligible for subsidies to purchase private insurance in the exchange.

Grandmothered plans

The Utah Department of Insurance accepted the Obama Administration’s March 2014 offer to allow pre-2014 (but non-grandfathered) health plans to be extended into 2015 or even 2016, and by June 2014, the state’s two largest insurers had also accepted the offer.

Regence Blue Cross and Blue Shield and SelectHealth – covering a total of 60 percent of the individual health insurance market in Utah – both allowed their members with pre-2014 plans to renew their coverage in the fall of 2014.

Insureds with grandmothered plans eligible for renewal can opt to switch to an ACA-compliant plan instead, either during general open enrollment or when their plan renews (renewal of an individual plan outside of general open enrollment is a qualifying event that triggers a special enrollment period).

Avenue H – Utah’s state-run SHOP exchange

Along with Massachusetts, Utah has a health insurance exchange that predates the Affordable Care Act. However, unlike the exchanges called for by the Affordable Care Act, Utah’s exchange is not open to individual consumers to purchase health insurance. That fact has led to a series of discussions and negotiations between the state and the U.S. Department of Health and Humans Services (HHS) — and ultimately, a unique approach that is attracting interest from other states.

The Utah Health Exchange for small businesses was established in 2009 and rebranded as Avenue H in October 2012. Avenue H offers a “fixed contribution” approach for small employers. An employer contributes a fixed amount toward each employee’s health insurance. An employee then uses the exchange website to pick an insurer and policy to fit his or her individual or family needs. According to an article in The Salt Lake Tribune, by August 2013, about 350 businesses were providing health insurance to about 7,800 people through Avenue H.

In 2015, small-businesses had their choice of 75 plans from three carriers on Avenue H (Arches Mutual Insurance, SelectHealth and UnitedHealthcare of Utah), and 576 plans from seven companies that are selling small group plans outside the exchange. In 2016, Arches Mutual plans are no longer available – on or off the exchange – as the CO-OP shut down at the end of 2015.

Exchange history – a unique approach

Gov. Herbert asked President Obama to direct the U.S. Department of Health and Human Services (HHS) to approve Utah’s exchange and to consider it a “minimum standard” for an ACA-compliant state-based exchange. In January 2013, HHS granted conditional approval for Utah’s exchange while maintaining that it must be expanded to serve individual consumers.

Herbert continued to lobby for HHS to accept the Avenue H “as is” and proposed in February that the state continue running its small business exchange and that the federal government operate the individual exchange. In May, HHS and Utah reached an agreement for this dual-model approach, and Utah moved forward with two separate exchanges – small business run by the state and individual run by HHS – when open enrollment began for individual policies in October 2013.

New Mexico has also adopted a hybrid approach, but the specifics are different.

Contact the exchange

HealthCare.gov
Use the federal marketplace to enroll in individual or family coverage

More Utah health insurance exchange links

Avenue H
Utah’s exchange for small businesses (Small Business Health Options Program, or SHOP)
877-213-1993

Health Insurance Division Consumer Service
Assists consumers who have purchased insurance on the individual market or who have insurance through an employer who only does business in Utah.
(801) 538-3077

Office of Consumer Health Assistance (OCHA)
Serves residents with health care complaints.
(801) 538-9674 / Toll-Free: 1-800-439-3805 / health.uid@utah.gov

State Exchange Profile: Utah
The Henry J. Kaiser Family Foundation overview of Utah’s progress toward creating a state health insurance exchange.

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