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Virginia health insurance marketplace: history and news of the state’s exchange

UnitedHealthcare & Aetna exiting; 7 insurers staying; all areas have insurers for 2018, but Anthem's coverage area is shrinking

Highlights and updates

Virginia exchange overview

The exchange in Virginia is more robust than in most states, but two insurers are exiting the market at the end of 2017. Seven insurers are remaining in the exchange in 2018, although most areas of the state have only one or two insurers offering exchange plans, since participation is generally localized.

Virginia uses the federally-run exchange, so applicants enroll via HealthCare.gov. But Virginia is one of seven federally-run exchange states that conducts its own plan management, so the state takes an active role in overseeing the plans that are sold in the exchange.

In January 2017, when ACA repeal looked somewhat inevitable, State Representative Kathy Byron (R, 22nd District) introduced H.B.2103. If enacted, the bill would have ended Virginia’s marketplace plan management functions, effective 60 days after the provisions of the ACA are “repealed or otherwise become unenforceable.” The measure did not advance out of committee, though, despite the fact that Republicans in Congress devoted much of 2017 to their efforts to repeal the ACA (they were not successful, however, and the ACA remains unchanged as we head into 2018).

According to an HHS report published in December 2016, there were 327,000 people who gained health insurance in Virginia from 2010 to 2015 as a result of the ACA. HHS also estimated in October 2016 that there were 56,000 people in Virginia who had off-exchange coverage in 2016, but who would be eligible for subsidies if they switched to the exchange instead

Virginia has not yet accepted federal funding to expand Medicaid, and as a result, there are 138,000 people in the coverage gap in Virginia (they earn too little to qualify for premium subsidies, but are also ineligible for Medicaid since Virginia has not expanded eligibility). Governor Terry McAuliffe, a Democrat, has been trying since he took office to expand Medicaid, but the legislature has rejected all of his efforts. Governor-elect Ralph Northam, who won the gubernatorial election in November 2017, is a proponent of Medicaid expansion, but even more importantly, Democrats made considerable headway in gaining seats in the state legislature in the 2017 election, making it possible that Medicaid expansion could become a reality in Virginia.

Optima reverses plans to expand, which initially left 63 counties without an insurer lined up for 2018

Aetna and UnitedHealthcare are exiting the Virginia exchange at the end of 2017 (details below), and Anthem had announced in mid-August that they would also be exiting the exchange. That initially would have resulted in 50 counties and independent cities in Virginia (out of 133 total) without any insurers lined up to offer exchange coverage for 2018. That problem was initially averted when Optima filed plans to expand their coverage area for 2018, but Optima filed revised rates in early September and sharply reduced their proposed coverage area for 2018, leaving 63 counties without an insurer lined up for 2018.

Optima’s initial rate filing noted that they were planning to re-enter five rating areas that they had previously exited at the end of 2016. Optima offers coverage in 35 counties/cities in the exchange in 2017, and planned offer coverage in 128 counties/cities in 2018. So as of mid-August, Optima’s expansion meant that every area in Virginia would have at least one exchange insurer offering plans.

But on September 5, Optima submitted a revised filing that includes a coverage area of just 28 counties/cities (details available in Virginia SERFF’s plan binder filing section). They will leave some of the counties where they currently offer coverage, and have drastically scaled back their expansion plans to include only Halifax and Mecklenburg counties, and the Charlottesville area.

The new Optima rate filing included an assumption that cost-sharing reductions (CSRs) wouldn’t be funded for 2018 (their earlier filing had assumed that CSR funding would continue), and an overall average rate increase of 72.9 percent. Optima’s announcement on September 6 noted that for the 70 percent of their members who receive premium subsidies, net premiums will be just 1.5 percent higher in 2018. But for the other 30 percent of their members, premiums would be an average of 81.8 percent higher (Optima’s filing was revised again in mid-September, with the average rate increase climbing to 81.1 percent overall).

Optima had filed a 19.3 percent average rate increase as of July; they noted in their September announcement that roughly 20 percent of their newly-proposed rate increase was their originally planned increase, 23 percent was due to the anticipated loss of CSR funding, and the remainder was due to the impending withdrawal of Anthem, United, and Aetna. It’s notable that both the uncertainty over the CSR funding (which turned into certainty in mid-October when the Trump Administration announced that CSR funding would end immediately) and the withdrawal of insurers from the exchanges nationwide is due in large part to the actions the Trump Administration has taken in 2017, and Republican lawmakers’ focus on repealing the ACA rather than stabilizing the insurance markets (lawmakers briefly considered — but did not pass — legislation to stabilize the insurance markets in September; if they had enacted such legislation in the spring instead, we’d be looking at a much more stable insurance landscape for 2018, and much smaller overall average rate increases).

Optima’s newly-filed coverage area meant that there were 63 counties — home to about 70,000 exchange enrollees — where no insurers had filed plans for 2018. The Virginia Bureau of Insurance confirmed on September 7 that they were actively working with the state’s insurers to get coverage statewide (insurers had until September 27 to sign contracts with HealthCare.gov to participate in the exchange for 2018).

Anthem, the largest insurer in Virginia exchange, planned to exit but opted to stay in order to fill bare counties

Anthem (Health Keepers) has by far the largest market share in Virginia’s individual market. But in mid-August, Anthem announced that they would withdraw from the Virginia exchange at the end of 2017, and would not offer exchange plans for sale during the open enrollment period that begins November 1, 2017. Anthem currently offers coverage in 14 exchanges, but they will exit the exchanges in Ohio, IndianaWisconsin, and Nevada at the end of 2017, and scale back their exchange coverage area in CaliforniaGeorgia, and Missouri.

Anthem planned to continue to offer an off-exchange plan in Virginia, but in a limited area (in the city of Bristol, and in Washington and Scott counties). That would have avoided a full market exit, which would prevent Anthem from returning to the individual market for five years.

Anthem’s exit from the exchange and most of the off-exchange market would have had a significant impact on the Virginia market. According to the Virginia Bureau of Insurance, Anthem has 206,000 members (on and off-exchange) in the individual market in 2017. Anthem’s exit from virtually the entire market would have required nearly all of those enrollees to secure new coverage for 2018.

The Virginia Bureau of Insurance noted at the time that they tried to convince Anthem to remain in the Virginia exchange, but to no avail.

Anthem’s statement about their exit from the Virginia exchange explained that “today, planning and pricing for ACA-compliant health plans has become increasingly difficult due to a shrinking and deteriorating Individual market, as well as continual changes and uncertainty in federal operations, rules and guidance, including cost sharing reduction subsidies and the restoration of taxes on fully insured coverage. As a result, the continued uncertainty makes it difficult for us to offer Individual health plans statewide in Virginia.” This “continued uncertainty” is something that market watchers have been warning about all year, noting that insurers cannot accurately price plans or predict risk in the environment that the Trump Administration and GOP legislative process have created

But Anthem changed course in mid-September, with their announcement that they would remain in the Virginia exchange and would offer coverage in 68 counties and cities — including the 63 that would have otherwise had no exchange insurers (a few of those counties were no longer bare at that point, thanks to a newly-revised filing from Optima).

Anthem’s new rate filing had a higher overall average rate increase (56.4 percent) than they had filed earlier in the summer, due in part to the new rate being based on the assumption that cost-sharing reductions (CSRs) would not be funded by the federal government in 2018. As a result, they added the cost of CSRs to their silver plan rates for 2018. For most enrollees, the higher premiums will be offset by larger premium subsidies. But enrollees who don’t get premium subsidies will want to price check during open enrollment to see if there’s a more affordable option available. Bronze and gold plans will also likely be more attractive to current silver plan enrollees without subsidies, since the additional load to compensate for unfunded CSRs is only being added to Anthem’s silver plans.

The new filing also indicated that the 2018 rates would apply to roughly 61,000 members, which is much smaller than Anthem’s current membership in Virginia. So although Anthem is remaining in the exchange in order to prevent parts of the state from having no insurers, many of Anthem’s current enrollees will still have to pick a plan from a different insurer in 2018. Anthem’s plans are available statewide in 2017, but will be available in just 68 counties/cities in 2018.

United, & Aetna exiting exchange at year-end

For insurers that plan to offer coverage in 2018, Virginia had a very early form filing deadline in 2017 (April 19), and among the earliest rate filing deadlines in the nation (May 3). When the forms were filed on April 19, nine of Virginia’s ten exchange insurers had signed up to offer individual market exchange coverage again next year. Three of the companies — CareFirst, GHMSI, and Kaiser — filed plans to also offer small group coverage in the exchange. All of this was very preliminary, however.

UnitedHealthcare of the Mid-Atlantic was the only carrier that did not intend to remain in the exchange at that point. Virginia is one of only three states where UnitedHealthcare still offers coverage in the exchange in 2017. In 2016, UnitedHealthcare offered exchange plans in 37 of Virginia’s 134 counties.

Aetna did file forms in April for 2018 individual market coverage in the Virginia exchange, but they indicated in early May that they were considering “significantly reducing [their] exposure” to individual market coverage in 2018. Aetna only offers individual exchange plans in four states in 2017 (Virginia, Delaware, Nebraska, and Iowa).

On May 3, Aetna announced that they would not participate in the Virginia exchange in 2018, nor would they offer individual market plans outside the exchange (this means that Innovation Health Insurance Company, which is part of Aetna, will also exit the Virginia market at the end of 2017). Aetna had already committed in early April to fully exiting Iowa at the end of 2017, and subsequently announced that they would also exit Nebraska and Delaware. They also withdrew their proposal to join the Nevada exchange, and will not have an exchange presence in any state in 2018.

Approved rate increases for 2018: Revised average rate increases range from 35% to 81%

Open enrollment for 2018 coverage began on November 1, 2017, and will continue until December 15, 2017.

Insurers in Virginia initially assumed, for the most part, that funding for cost-sharing reductions (CSR) would continue in 2018. But they revised the rate filings later in the summer to reflect the new assumption that CSR funding would not continue (at that point, Congress had not allocated funding, and the Trump Administration continued to threaten to cut off the funding). Ultimately, the Trump Administration announced in mid-October that CSR funding would end immediately, so it was wise planning on the part of insurers to have added the cost of CSR to their premiums for 2018 (insurers are still required to provide CSR benefits to all eligible enrollees, regardless of whether the insurer is being reimbursed for the costs).

Virginia is one of the states where the cost of CSR has been added to silver plans (Optima’s rate filing indicates that the Virginia Bureau of Insurance recommended this approach, but did not require it). This means that premium subsidies are much larger than they would otherwise have been, which offsets the higher rates for silver plan enrollees and provides enrollees at other metal levels with plans that might even be less expensive than they were in 2017. More than eight out of ten Virginia exchange enrollees are receiving premium subsidies in 2018, and these people will be largely protected from the rate increases for 2018. Unfortunately, the other 17 percent of exchange enrollees, plus everyone who has off-exchange coverage, will bear the full brunt of the rate hikes (although they may be able to obtain a better value by comparison shopping during open enrollment).

The seven insurers that plan to offer coverage in the Virginia exchange in 2018 have implemented the following average rate increases, most of which were revised twice, most recently in August or early September (all of the most recently-filed rates were deemed reasonable by state regulators and are being implemented for 2018, but they’re averages — actual rate increases vary considerably within a single insurer’s plans, and silver plans will generally have the largest percentage rate increases for 2018):

  • CareFirst Blue Choice: 16.1 percent 49.1 percent, includes the assumption that individual mandate will not be enforced in 2018. Filing indicates there are currently 10,600 members. CareFirst, along with their subsidiary, Group Hospitalization and Medical Services, no longer offers bronze plans in Virginia, after mapping bronze plan members to silver plans at the start of 2017.
  • Cigna: 44.7 percent, revised to 46.7 percent, and later revised to 51.1 percent, based on the assumption that CSR funding would be eliminated. 20,209 members expected to be impacted by the rate increase.
  • Group Hospitalization and Medical Services, Inc.: 48.2 percent 61.3 percent. As of 2017, there were 4,376 members on these plans (GMHS stopped offering bronze plans at the end of 2016, and will continue to offer only silver and gold plans for 2018, plus a catastrophic plan for those eligible to purchase it.
  • Health Keepers (Anthem): 37.7 percent revised to 56.4 percent in September, including additional premiums added to silver plans based on the assumption that CSR funding will be eliminated (exchange filings for 2018 were withdrawn in August, but Anthem reversed that decision in mid-September, and is offering coverage in 68 of Virginia’s counties/cities for 2018). The Health Keepers rate hike is expected to impact approximately 61,000 members.
  • Kaiser Foundation Health Plan of the Mid-Atlantic: 15.3 percent 24.2 percent (new filing dated May 30) 34.5 percent; assumes CSR funding will be eliminated, and the cost of CSR has been added to silver plan premiums instead.
  • Optima Health Plan (HMO): 9.8 percent 19.3 percent (revised filing, as of mid-July) 72.9 percent, revised again in mid-September to 81.1 percent (the two more recent filings were based on the assumption that CSR funding would end, with the cost of CSR added to silver premiums instead). Plans are being offered in rating areas 2, 4, 7, 9, and 12.
  • Piedmont Community Healthcare (and Piedmont HMO): 9.95 percent, revised to 42.19 percent, revised again in mid-September to 53.4 percent. The revised rates were based on the assumption that CSR funding would be eliminated, but that individual mandate enforcement will continue. The rate increase is expected to apply to 15,381 members.

CareFirst Blue Choice and Group Hospitalization & Medical Services Inc. share a parent company. Health Keepers has the majority of the market share in Virginia (56 percent), with Kaiser in second place at about 21 percent.

There is significant concern among insurers about the stability of the individual health insurance markets, and we’re seeing that in the ever-increasing premiums that insurers filed in Virginia. In particular, insurers wanted the Trump Administration to vigorously enforce the ACA’s individual mandate, and to ensure ongoing funding for cost-sharing subsidies. Instead, President Trump’s first executive order, signed just hours after he took office, called for federal agencies to be as lenient as possible (within the letter of the law) when enforcing the ACA’s taxes and penalties, and the Trump Administration confirmed in mid-October (well after insurers had finalized their premiums for 2018 in most states) that CSR funding would end immediately. In some states, insurers then had to scramble to add the cost of CSR to premiums, but Virginia insurers had already done that in the revised filings they submitted in August and September.

As noted above, the latest filings assumed that CSR funding would not continue in 2018, but they took differing stances in terms of whether the individual mandate will be enforced. All around, the average rate increases are shockingly high, ranging from about 35 percent to 81 percent. Any portion of the rate hikes that is due to the assumption that CSRs won’t be funded can be pinned on the Trump Administration’s efforts to sabotage the ACA, and Congressional leadership’s failure to appropriate funding for CSRs earlier in 2017. The expected worsening of the health of the overall risk pool is also partly caused by the Trump Administration’s lax (real or perceived) enforcement of the individual mandate.

It’s important for consumers to understand that the majority of enrollees will be protected from these rate increases, as premium subsidies will grow to keep pace with the higher rates. 83 percent of Virginia exchange enrollees are receiving premium subsidies. The IRS has actually reduced the percentage of income that subsidy-eligible enrollees have to pay for the second-lowest-cost silver plan in 2018, which means that people who are eligible for subsidies could see lower net premiums in 2018, although they may have to switch plans to take advantage of the lower prices.

For 2018, Charlottesville area has the highest percentage increase in premiums in the US

According to a Kaiser Family Foundation analysis of premium changes from 2017 to 2018 for a 40-year-old, the Charlottesville, Virginia area has the highest percentage increase in pre-subsidy premiums in the whole country, at all metal levels. For a 40-year-old, the lowest-priced bronze plan in the Charlottesville area is 247 percent more expensive than it was in 2017. For silver, it’s 234 percent more, and for gold, it’s 195 percent more (all of these increases are based on a person whose income is above 400 percent of the federal poverty level, making them ineligible for premium subsidies).

It’s noteworthy that the Charlottesville area only has plans available from Optima in 2018, whereas plans were available from Aetna and Health Keepers in 2017. Optima has the largest percentage increase of any of the insurers in Virginia for 2018, and in areas where they offered coverage along with one or more other insurers for 2017, Optima’s rates tended to be on the higher end of the spectrum in 2017 as well.

But although Optima’s average percentage rate increase was the largest in the state, their 2018 rates vary from one area of the state to another. By and large, their rates are lower in the areas where they already offered coverage in 2017, mid-range in Halifax and Mecklenburg counties (where they expanded for 2018), and highest in the Charlottesville area (where they also expanded for 2018, and where they are the only insurer offering plans for 2018).

In the Charlottesville area and Halifax and Mecklenburg counties, Optima had no claims experience, whereas they did have claims experience in the rest of the areas where they’re offering coverage for 2018. In the Halifax and Mecklenburg, Piedmont is also offering coverage for 2018, and their rates are considerably lower than Optima’s (although even Optima’s rates in those counties are lower than Optima’s rates in the Charlottesville area).

So in Halifax and Piedmont counties, the percentage increase for the lowest-cost plan is based on a Health Keepers plan in 2017 versus a Piedmont plan in 2018. But in the Charlottesville area, the percentage increase is based on a Health Keepers plan in 2017 versus an Optima plan in 2018. And it appears that Optima implemented their highest 2018 rates in that area, where they knew that they would be taking on all of the risk, with no other insurers in the market (note that if rates end up being too high for 2018, enrollees will eventually receive MLR rebates).

For people who get premium subsidies, the subsidies are much larger for 2018 than they were in 2017, to offset the enormous rate increase (the unsubsidized cost of the lowest-priced silver plan for a 40-year-old is going from $303/month to $1012/month), keeping the after-subsidy cost of the benchmark plan roughly equivalent to what it was in 2017 (slightly lower, actually, but roughly equivalent). But for people who don’t get premium subsidies, the rate increase in the Charlottesville area is the most substantial in the country. For people in this situation, it’s worth talking with a tax preparer to see if there’s any realistic way of getting MAGI down to a level that’s subsidy-eligible, since the subsidy cliff results in thousands of dollars in additional premiums that enrollees have to pay for coverage in 2018.

Direct primary care arrangements exempt from insurance oversight

In a direct primary care agreement, a patient pays a doctor a set fee each month, in return for unlimited access to a predetermined range of primary care treatments. Such arrangements are not considered minimum essential coverage under the ACA, so a person who relies on them without additional health insurance in place would be subject to the individual mandate penalty (unless otherwise exempt).

But questions remain at the state level in terms of whether direct primary care arrangements should be subject to insurance regulations and oversight from the state insurance department. Virginia has decided that the answer is no. During the 2017 legislative session, lawmakers passed H.B.2053 (and the companion senate bill, S.B.800) and Governor Terry McAuliffe signed the legislation into law on April 26.

Virginia’s law specifies that direct primary care arrangements are not insurance, which means they are not subject to Virginia’s insurance laws and regulatory oversight. The legislation includes specific details that must be communicated to direct primary care enrollees, including the fact that the arrangement is not insurance, provides only limited benefits, and does not meet the ACA’s coverage requirements.

2017 enrollment

410,726 people enrolled in private plans through the Virginia exchange during the 2017 open enrollment period. 421,897 people enrolled during the 2016 open enrollment period, so enrollment was 2.6 percent lower in 2017. Across all states that use HealthCare.gov, enrollment was about 5 percent lower than it had been the year before.

The decline is due to a variety of factors, including higher premiums, insurer exits from the exchanges, uncertainty about the future of the ACA, and the Trump Administration’s decision to pull advertising for HealthCare.gov in the final week of open enrollment.

The average pre-subsidy premium in the Virginia exchange is $405/month in 2017. But 81.5 percent of enrollees are receiving premium subsidies, and their average after-subsidy premium is $146/month.

Open enrollment for 2017 ended on January 31. To obtain 2017 coverage later in the year, most applicants need a qualifying event (and will have to provide proof of the qualifying event in order to complete the enrollment). Native Americans can enroll year-round, as can anyone eligible for Medicaid or CHIP (keeping in mind that Virginia has not expanded Medicaid under the ACA, so Medicaid eligibility is very limited for able-bodied adults).

2017 carrier shifts, CareFirst eliminated bronze plans

UnitedHealthcare has exited the individual markets in the majority of the states where they offered exchange plans in 2016. But in Virginia, United has continued to offer plans in the exchange in 2017. They discontinued their PPOs, but are still offering HMOs both on and off-exchange in Virginia (they will not remain in the Virginia market after the end of 2017, however).

Humana exited the individual market in Virginia as the end of 2016, but they were only offering plans outside the exchange, so their exit didn’t impact the exchange offerings. And Cigna joined the individual market in Virginia for 2017, both on and off-exchange. Cigna’s plans are available in Northern Virginia and the Richmond area. Cigna scaled back their plans to expand into more exchanges for 2017, but a search on Healthcare.gov confirms that their plans are available in some areas of Virginia for 2017.

Coventry left the individual market, but they were actually just rebranded as Aetna (Aetna purchased Coventry in 2013).

CareFirst (including CareFirst Blue Choice along with Group Hospitalization and Medical Services, Inc.) is continuing to offer plans in the exchange, but they terminated all of their bronze plans and replaced them with silver. The result is higher overall average rate increases, since people who were on bronze plans were shifted to more expensive silver plans. CareFirst’s service area in Virginia is very small, however. They only offer plans in a small area of the state around Washington DC (east of Route 123, in Fairfax and Prince William Counties).

2017 rates

The average benchmark plan (second-lowest-cost silver plan) premium in Virginia was 10 percent more expensive in 2017 than it was in 2016 (that’s less than half the 22 percent average increase nationwide). Subsidies are based on the cost of the benchmark plan, so they were larger for 2017 than they were in 2016. But exchange enrollees still needed to compare the various options that were available during open enrollment, as some plans had rate increases well in excess of 10 percent (details below).

The Virginia Bureau of Insurance has a page that details the proposed rate changes carriers have filed for 2017. Ten carriers offered plans in the Virginia exchange in 2017, and their final approved average rate increases are as follows:

  • Aetna (new plans, replacing Coventry for 2017; Aetna will exit the Virginia market at the end of 2017 and will not offer 2018 coverage)
  • CareFirst Blue Choice: 31.2 percent (revised rate filing submitted in August, and subsequently deemed reasonable by regulators). CareFirst Blue Choice also dropped all of their bronze plans at the end of 2016, and mapped policy-holders to silver plans instead (people had the option of switching to a different CFBC plan or a plan from another carrier if they didn’t like the mapped option). CFBC also consolidated their three Gold plans into one Gold plan for 2017.
  • Cigna (new plans)
  • Group Hospitalization and Medical Services, Inc.: 20.2 percent (revised rate filing, submitted in August, and subsequently deemed reasonable by regulators). GHMSI is a CareFirst BlueCross BlueShield company, and followed the same strategy described above: Bronze plans were terminated, and bronze enrollees were mapped to silver plans instead. For people who already had silver and gold plans, the average rate increase was just 5.5 percent. But since everyone on the less expensive bronze plans was switched to more expensive silver plans, the overall average rate increase was 20.2 percent.
  • Health Keepers (Anthem): 14.35 percent
  • Innovation Health Insurance Company (An Aetna company): 12.1 percent (exiting at the end of 2017)
  • Kaiser Foundation Health Plan of the Mid-Atlantic: 10 percent
  • Optima Health Plan (HMO): 24.3 percent
  • Piedmont Community Healthcare (and Piedmont HMO): 17.4 percent
  • UnitedHealthcare of the Mid-Atlantic: 11.9 percent (exiting at the end of 2017)

For more analysis of the rate review process that took place in Virginia during the summer of 2016, ACAsignups has a comprehensive review of the initial rate filings in Virginia for 2017, an updated version that provides additional clarity, and a revised version with revisions as of August 2016.

Note that the “final rate increase” numbers on Healthcare.gov’s rate review tool do not always match the detailed descriptions further down the page, or the information in the associated rate filing document.

2016 enrollment

421,897 people enrolled in private plans through the Virginia exchange during the 2016 open enrollment period. That’s an increase of 9.5 percent over the 385,154 people who enrolled during the 2015 open enrollment period. And the 2016 total already accounted for attrition as of February 1, whereas the 2015 total didn’t include any early attrition.

37 percent of Virginia exchange enrollees were new to the exchange for 2016, while the rest already had coverage through the exchange in 2015.

After accounting for attrition in February and March, the effectuated enrollment tally as of March 31 was 378,838. Of those enrollees, 84.2 percent are receiving premium subsidies that average $276 per month (for perspective, the average pre-subsidy premium for those who enrolled during open enrollment was $366/month; the subsidies offset the majority of that cost for those who are subsidy-eligible).

Open enrollment ended on January 31, for both on and off-exchange plans. The next open enrollment period will begin on November 1, for coverage effective in 2017. Between now and then, enrollment—including off-exchange—is only possible in most cases for people who experience a qualifying event. But Native Americans can enroll year-round, as can anyone who’s eligible for Medicaid or CHIP.

The penalty for being uninsured in 2016 (which will be assessed when tax returns are filed in early 2017) is much higher than it was in 2014 and 2015: $695 per uninsured adult, or 2.5 percent of household income above the tax filing threshold, whichever is higher.

Governor vetoed direct primary care exemption in 2016

In March 2016, lawmakers in Virginia passed HB685, in an effort to protect the direct primary care model. Direct primary care is an arrangement between physicians and patients that allows the patient to pay the doctor a flat monthly fee in return for access to primary care.

Under HB685, direct primary care arrangements would not be subject to Virginia’s insurance laws and regulations, or the jurisdiction of the State Corporation Commission. Governor McAuliffe recommended that the bill include a provision that the legislation be reenacted during the 2017 legislative session, and he ultimately vetoed HB685 in May 2016.

Direct primary care arrangements are still legal in Virginia, but since HB685 was vetoed, there isn’t a legal exemption from insurance regulatory laws for direct primary care models.

HB685 stated that a direct primary care arrangement is not health insurance, which is why it wouldn’t be subject to oversight from the Bureau of Insurance. As such, a direct primary care arrangement does not fulfill the ACA’s requirement that people maintain health insurance coverage or pay a penalty (described above) for being uninsured. People are free to enroll in a direct primary care arrangement in addition to a health insurance plan, but if they use a direct primary care arrangement in lieu of a health insurance policy, they’ll be subject to the ACA penalty when they file their tax return, unless they’re otherwise exempt.

2016 rates

After reviewing proposed rates for several months, regulators in Virginia announced approved rate changes for 2016 in early October 2015. For carriers that offer individual plans in the Virginia exchange, rate changes for 2016 ranged from a 3.34 percent decrease (Innovation Health Insurance Co.) to a 19.1 percent increase (Group Hospitalization and Medical Services). For the entire individual market—which includes five carriers that only offer plans off-exchange (two of which had increases in excess of 14 percent)—the overall weighted average rate increase in Virginia was 8.5 percent for 2016.

In the small group market, the news was even better, with a weighted average rate increase of just 2.9 percent.

For the individual market, Kaiser Family Foundation analyzed rate data for 14 metropolitan areas, comparing benchmark (second-lowest-cost silver) plan premiums in 2015 and 2016. In the Richmond, Virginia area, the benchmark premium is 6.2 percent higher in 2016. Statewide, the average benchmark premium is 4 percent higher in 2016 than it was in 2015, according to HHS.

Subsidy amounts are tied to benchmark plan premiums, so average subsidies are higher in Virginia in 2016 than they were in 2015. The average premium subsidy in Virginia in 2016 is $273/month, while the average premium subsidy in 2015 was $260/month. But the increase isn’t enough to offset all of the premium increases; it was important for enrollees to shop around during open enrollment and actively select from among the available plans for 2016.

2016 carriers

Virginia has a robust health insurance market, with ten carriers offering plans in the exchange – including UnitedHealthcare of the Mid-Atlantic, which is new to the Virginia exchange for 2016. A Kaiser Family Foundation analysis found that there are more insurers offering coverage on a per-county basis in Virginia in 2016 than they were in 2015, despite the fact that nationwide, the average county in the US has fewer available insurers in 2016.

Ten carriers are offering individual plans in Virginia’s exchange for 2016:

  • Innovation Health Insurance
  • Aetna
  • Coventry
  • Optima Health Plan
  • Kaiser Foundation Health Plan of the Mid-Atlantic
  • UnitedHealthcare of the Mid-Atlantic
  • Group Hospitalization and Medical Services
  • Care First Blue Choice
  • Health Keepers (Anthem)
  • Piedmont Community Healthcare (and Piedmont HMO)

In addition, several carriers offer ACA-compliant plans only outside the exchange:

  • Humana (exiting individual market in Virginia at the end of 2016)
  • UnitedHealthcare Life Insurance
  • Golden Rule
  • Optima Health Insurance
  • Freedom Life

Lawmaker introduces Anti-ACA legislation

On January 5, 2016, Republican State Representative Brenda L. Pogge introduced HB338. The legislation would have prohibited Virginia from implementing a state-run exchange, and would also ban state resources (personnel or financial resources) from enforcing, administering, or cooperating with the Affordable Care Act.

Virginia already uses the federally-run exchange (Healthcare.gov), although it’s a marketplace plan management system, which means the state oversees the health plans that are available through the exchange. If HB338 had passed, it would have prohibited a future governor from establishing a state-run exchange, and would presumably force the Virginia Bureau of Insurance to cease plan management oversight for plans sold through the exchange.

In early February, the House Appropriations subcommittee on Health and Human Resources recommended striking HB338 from the docket, and the legislation died in committee.

Opponents of the ACA saw HS338 as an effort to rid Virginia of Obamacare, but the individual mandate is administered by the IRS – no state agency is responsible for enforcing the rule that says nearly everyone must have insurance coverage in place. And while Virginia does currently oversee the plans available on the exchange, there are five states where even rate regulation for exchange plans is entirely up to HHS. Thus it’s doubtful that the legislation would have had a significant impact.

2015 enrollment

By the end of the 2015 open enrollment period, including the extension through February 22, the Virginia exchange had enrolled 385,154 people in private plans, including 2014 enrollees whose plans were renewed.  84 percent qualified for premium subsidies, and 54 percent were new to the exchange for 2015.  Of the 176,642 enrollees who renewed coverage from 2014, nearly 99 thousand actively renewed their plans, while the rest were auto-renewed.  Of those who actively renewed, nearly half (43,555) picked a new plan for 2015.

But as expected, some enrollees didn’t pay their initial premiums, and some cancelled their exchange plans because they obtained coverage elsewhere.  By the end of March, 335,033 people in Virginia had effectuated private plan coverage through the exchange. That total had declined slightly by the end of June, to 327,026. Of the effectuated enrollments, 83.8 percent of them were receiving premium subsidies, and nearly 55 percent were receiving cost-sharing subsidies.

Fortunately for the 274,044 people who are receiving premium subsidies through the Virginia exchange, the Supreme Court ruled in June 2015 that subsidies are legal in every state, regardless of whether the exchange is run by the state or federal government. If the Court had ruled that subsidies were not allowed in states that use the federally-facilitated marketplace (ie, Healthcare.gov), their premiums would have become entirely unaffordable. And rates in the individual market – even for people who don’t have subsidies – would have increased by an average of 35 percent (or even 55 percent), in addition to the regular annual rate increases due to medical cost growth.

An additional 36,569 exchange enrollees in Virginia had enrolled in Medicaid or CHIP during the second open enrollment period. That enrollment is year-round, but volume usually increases during the open enrollment period for private plans because of the increased outreach from navigators and exchanges. Medicaid enrollment in Virginia continues under the pre-2014 eligibility guidelines, as the state has not yet accepted federal funding to expand Medicaid.

Carriers and rates for 2015

In the Richmond area, the average price for a 40 year old non-smoker selecting the second-lowest-cost Silver plan (benchmark plan) increased by only 2.7 percent in 2015, from $253 per month to $260 per month (for people who qualify for premium tax credits, the difference was mostly absorbed by slightly higher subsidies).

The Commonwealth Fund conducted an analysis of rate changes across all plans and metal levels in the exchange, and found a breathtaking average rate decrease of 56 percent. But their report explained that this was because Optima Health, which had previously offered a silver plan that cost $2,000 a month (seven times the average rate), stopped offering that plan for 2015, which brought the average cost way down even though the change would have been much more muted without taking into consideration the very high-priced Optima plan (which probably wasn’t purchased by many shoppers in 2014).

For all 14 carriers in the individual market in Virginia (including off-exchange plans), PricewaterhouseCooper data indicated a weighted average finalized premium increase of 10.2 percent for 2015.

But for people who had the benchmark Silver plan, price increases were more muted, mostly averaging 3 percent to 6 percent in much of the state, especially for enrollees willing to shop around in order to make sure they still had the second-lowest-cost Silver plan in 2015. The Virginia Association of Health Plans called the price increases “relatively modest” for people who were enrolled in an exchange plan in 2014 and then renewed their coverage or switched to another exchange plan for 2015.  In Fairfax county, both the lowest and second-lowest cost silver plan are offered by different carriers in 2015 than they were in 2014.

In the Richmond area, a 40 year old non-smoker purchasing the lowest-cost Silver plan from Anthem would have paid $258/month in 2014, and that increased just slightly to $264/month in 2015. The lowest cost Silver plan from Coventry for the same enrollee increased in price from $230/month in 2014 to $241/month in 2015.  Compared with rate increases in the individual market before the ACA, these were minimal changes.  And for people who qualify for subsidies, they were offset by higher subsidies in 2015.

Virginia worked to protect premium subsidies

Two very important legal challenges to the ACA’s premium tax credits were undertaken in 2014/2015, and a ruling against the tax credits would have had far-reaching consequences, not only for the millions of Americans who are relying on those subsidies to make their coverage affordable, but also for anyone who purchases health insurance in the individual market at all, since the loss of billions of dollars in subsidies would have crippled the markets in some states.

Halbig v. Burwell and King v. Burwell both argued that subsidies were not allowed in states (including Virginia) where HHS is running the exchange.  King v. Burwell ultimately ended up at the Supreme Court, and the Justices ruled in favor of the government in June 2015, maintaining the subsidies.

Virginia’s Attorney General, Mark Herring, led a group of 18 states that filed an amicus brief in the Halbig v. Burwell case in November 2014, urging the court to rule in favor of keeping the subsidies in the federally facilitated marketplace(FFM).  Of the 18 states represented in the amicus brief, five – including Virginia – have a federally-facilitated marketplace, six have partnerships with HHS to operate their exchanges, and seven have fully state-run exchanges but were concerned that insurance market collapse in states with federally-run exchanges could impact the markets in their states as well, given how many health insurance carriers operate regionally or nationally.

Virginia led the amicus brief, and attorney general Mark Herring has been outspoken in the past about the importance of keeping the premium subsidies available in states like Virginia where HHS is operating the exchange.  Virginia Governor Terry McAuliffe was also a proponent of keeping subsidies available in all states.

More money for enrollment assistance

Two navigator organizations in Virginia received a little over $2 million in navigator grants in September 2015. The bulk of the funding went to Virginia Poverty Law Center, although Boat People SOS received $205,000 in navigator funding.

The Virginia Poverty Law Center – along with Advanced Patient Advocacy LLC – also received $1.9 million in federal grant money in 2014 (out of a total of $60 million awarded nationwide) in order to operate and expand the enrollment assistance they provide as ACA navigators.

And in October 2014, it was announced that Virginia was receiving another $9.3 million federal grant to hire 100 enrollment assisters for the state. Virginia is one of just four states to receive this additional grant. Governor Terry McCauliffe used this money together with $4.3 million that the state had in remaining federal funds that were allocated towards establishing a state-run exchange – which Virginia did not do. The money was used to boost enrollment efforts in the state during the 2015 open enrollment period.

One of the enrollment challenges facing Virginia is the relatively high percentage of the population living in rural areas (13 percent), and also a high rural poverty rate (18 percent). In-person assistance can be harder to come by in rural areas, and internet connection can often be unreliable or slow in those areas. Navigator organizations have worked to develop strategies to reach out to the “high pockets of uninsured folks” in the state’s rural areas, and get them enrolled in the exchange during open enrollment.

In addition to exchange enrollment assistance, in December 2014 Virginia received a $2.6 million grant from CMS that will be used by the state to develop innovative new public health care models to address a wide range of issues, including tobacco use and mental health care.  The aim is to improve public health while also holding down costs.  It’s a joint project between the Virginia Center for Health Innovation and hundreds of public and private organizations and individuals.

Although Virginia’s exchange is run by HHS, the state has a website – Cover Virginia – that provides information about Medicaid and FAMIS, along with eligibility for premium and cost-sharing subsidies in the exchange.  And in late 2014, Virginia received $2 million in federal funding to provide outreach and education to residents about the exchange and the Cover Virginia website.

In October 2014, the state contracted with Big River Advertising – based in Richmond – to run a marketing campaign that includes radio, TV, and online advertising designed to boost awareness of the exchange.  The advertising is designed to make people aware of the assistance that’s available through the exchange, and to reiterate the fact that exchange-based coverage is affordable.

Grandmothered plans allowed to remain in force, but only Golden Rule kept them active

Grandmothered plans are pre-2014 health insurance that was purchased after the ACA was signed into law (ie, they’re not grandfathered under the ACA).  In the fall of 2013, March 2014, and again in February 2016, the Obama Administration announced transitional fixes that allowed existing health plans to continue to renew until as late as October 2017, with coverage continuing until the end of December 2017.

Virginia was initially one of 15 that did not accept the HHS proposal to allow grandmothered (transitional) health plans to remain in force past the end of 2014, and some reports indicated that as many as 250,000 people were going to need to transition to new coverage at the end of 2014.

But in November 2014, Virginia lawmakers passed House Bill 5011 and Senate Bill 5014, which allowed policies slated for cancellation to renew again under the terms allowed by HHS. Carriers were not required to renew plans at the end of 2014, but were given the option to do so. Ultimately, most of the carriers in the Virginia market determined that they were already too far along in the process of switching to ACA-compliant plans, and only Golden Rule opted to offer transitional plans for renewal at the end of 2014.

Virginia is allowing insurers to continue grandmothered plans until the end of 2018. It is up to Golden Rule to determine whether or not to renew the transitional plans again at the end of 2017.

2014 enrollment

By April 19, 216,356 people had selected a private plan in the Virginia exchange. An additional 48,660 exchange enrollees had been found to be eligible for Medicaid or CHIP by mid-April, under the state’s existing guidelines.

Uninsured rate slightly higher in 2014

In 2013, the uninsured rate in Virginia was 13.3 percent. According to a Gallup poll, that rate had climbed slightly, to 13.4 percent, by mid-2014. Virginia was one of only three states where the uninsured rate increased during the first half of 2014. The state’s failure to expand Medicaid is no doubt a significant factor in the lack of progress on insuring the uninsured.

By the first half of 2015, the Gallup survey found that the uninsured rate had declined slightly, to 12.5 percent.

No Medicaid expansion

Virginia has not expanded Medicaid (meaning that there are 131,000 people currently in the coverage gap), but that might change now that Democrats have taken more seats in the state’s legislature in the 2017 election, and another Democratic Governor (Ralph Northam) has been elected to succeed Terry McAuliffe.

Governor Terry McAuliffe, who took office in early 2014, has said that Medicaid expansion is one of his main priorities, and considering pushing it through without the support of the state legislature. The GOP legislature in Virginia has strongly rejected Medicaid expansion, utilizing every legal – and possibly not-so-legal – measure they can to block it.

In April 2014, the Virginia Senate finance committee approved a state budget that included funding to create a private marketplace (Marketplace Virginia) that would use federal funds to help provide private health insurance to people who would otherwise be covered by Medicaid if the state were to expand the program.

But when it came time to vote on the budget, Republicans in the Senate rejected it because of the Marketplace Virginia inclusion, and a stalemate ensued. A government shutdown was looming if an agreement wasn’t reached before the July 1 start of the new fiscal year. But in early June, Democratic Senator Phillip Puckett resigned, giving the GOP control of the state Senate; the budget quickly passed.

Gov. McAuliffe approved the budget on June 20, and the shutdown was averted. But he used his line-item veto powers to remove several Republican additions to the budget that would have blocked Medicaid expansion. Republicans pushed back against what they considered an overreach of executive powers, although McAuliffe vowed to expand Medicaid with or without their support.

In September 2014 however, McAuliffe pulled back from his push for Medicaid expansion, proposing instead a ten step plan (the “Virginia way“) that would gradually get health insurance to about 200,000 Virginia residents – roughly half as many as would gain coverage under Medicaid expansion.

McAuliffe’s plan involved enrolling people who already qualify for health coverage but are not yet receiving benefits, as well as expanding coverage for 20,000 people with severe mental illness and for 5,000 children of low-income state employees, but the plan did not move forward. McAuliffe continued to push for Medicaid expansion, but lawmakers continued to reject it, blocking it yet again after McAuliffe included it in his budget in 2017.

Advocates for Medicaid expansion in Virginia are hoping that the new makeup of the state’s legislature following the 2017 election will be favorable for Medicaid expansion to pass in 2018.

A private exchange

The Virginia Chamber of Commerce announced in June 2014 that it was working with ChamberSolutions to create a new small business private health insurance marketplace called Virginia Benefits Market.

The private exchange for employer-based coverage became available for use in 2015, and offers health coverage as well as dental, vision, life, disability, and critical illness plans.

The private exchange should not be confused with the SHOP exchange run by HealthCare.gov, but all of the health plans that are sold through the Virginia Benefits Market are ACA-compliant (ancillary products are not regulated by the ACA).

History of the Virginia exchange

Former Virginia Gov. Bob McDonnell, a Republican, opposed the Affordable Care Act. But along with the Republican-controlled General Assembly, he was conflicted as how best to resist the law’s implementation in the state.

In a 2011 letter to state legislative leaders, McDonnell wrote of extreme difficulty in determining whether “ceding control of an exchange to the federal government or creating our own is in the Commonwealth’s best interest.” The governor’s and General Assembly’s actions over the next few years reflected their shared reluctance to implement either option.

In August 2010, McDonnell appointed the Health Reform Initiative Advisory Council. The council issued a report in December 2010 and recommended that Virginia implement a state-based exchange.

The Virginia General Assembly passed legislation in 2010 to invalidate the individual mandate of the Affordable Care Act, and the state attorney general filed a lawsuit against Kathleen Sebelius, the secretary of the U.S. Department of Health and Human Services, based on the new law. After a series of legal actions, the state law was ultimately ruled invalid.

In 2011, the General Assembly passed legislation that was supportive of a state-based exchange, and McDonnell signed the bill into law. However, throughout the 2012 session the General Assembly failed to pass additional legislation necessary to move ahead with exchange implementation.

In January 2014, Governor Terry McAuliffe was inaugurated in Virginia, and unlike McDonnell, McAuliffe is very supportive of the ACA and of Medicaid expansion in Virginia.

HHS-run exchange, but some state oversight

Finally, after President Obama’s re-election in 2012, McDonnell notified HHS that Virginia would not proceed with a state-based exchange nor Medicaid expansion. While the norm for the federally operated exchange leaves no role for the state, McDonnell did lobby for oversight of the health plans that operate on the exchange within the state; Virginia is one of seven states with a marketplace plan management exchange.

HHS approved McDonnell’s request in March 2013, and the federally-run exchange opened for business in October 2013, with health plans overseen by the state Division of Insurance.

Virginia health insurance exchange links


Virginia Health Reform Initiative

Virginia Consumer Assistance Program
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.
(877) 310-6560 / bureauofinsurance@scc.virginia.gov

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

More Virginia coverage

Insurance Guide

A guide to health insurance in your state.


Your state’s Medicaid expansion, eligibilty, contacts


Insurance for those over 64 (off-site)