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Wyoming health insurance exchange / marketplace

BCBS of WY sole exchange carrier for 2016; rates up about 6%

  • By
  • healthinsurance.org contributor
  • December 21, 2015

During the first six weeks of open enrollment – November 1 to December 12 – enrollments in private plans through Wyoming’s exchange reached 12,588, including existing enrollees who had returned to the exchange to actively renew their coverage for 2016 (or select a different plan), along with new enrollees. It does not include current Blue Cross Blue Shield enrollees whose coverage was auto-renewed by the exchange if they didn’t actively select a new plan by December 17.

Wyoming is one of the 38 states that uses Healthcare.gov. Across all 38 of those states, 64 percent of enrollments through December 12 were people who already had coverage through the exchange in 2015, and returned to actively select a plan for 2016 (the other 36 percent were new enrollees).  For a variety of reasons, it’s beneficial for consumers to shop around each year, rather than letting their coverage auto-renew, and consumers are doing that much more than they did last year.

18,065 people had in-force private plan coverage in the Wyoming exchange by mid-2015. HHS hasn’t yet indicated a state-by-state breakdown of the ratio of new versus renewing consumers beyond the overall average for all Healthcare.gov states. But the ratio may be skewed towards more active renewals in Wyoming due to the fact that everyone with WINhealth coverage must enroll in a new plan for 2016, as the carrier has been placed in receivership by the Wyoming Department of Insurance.

Special enrollment period for WINhealth members

December 17 was the deadline to pick a new plan and have coverage effective in January under general open enrollment rules. WINhealth members have to pick a new plan or they’ll be uninsured as of January 1. But they also qualify for a special enrollment period because they have a qualifying event (loss of coverage). Although most qualifying events still have the same monthly enrollment deadlines, loss of coverage allows an applicant to select a new plan up until the last day of the month and still have coverage effective the first of the following month.

So WINhealth members who haven’t yet picked a new plan can still do so until December 31, and get coverage starting January 1. But if you’re in this situation, it’s essential that you indicate that you’re enrolling using a special enrollment period – as opposed to general open enrollment. Otherwise, enrolling at this point will result in a February 1 start date for your new plan, and a one-month gap in coverage after the WINhealth plan ends.

The special enrollment period triggered by loss of coverage continues for 60 days after the old plan ends – so WINhealth members technically have until February 29 to pick a new plan if they utilize their special enrollment period. But any plan selections made after December 31 will result in a gap in coverage.

Open enrollment continues until January 31

For enrollees who aren’t using a special enrollment period, plan selections made by January 15 will result in coverage that’s effective February 1. Plan selections made between January 16 and January 31 will have coverage effective March 1. If your plan was auto-renewed for January and you’d prefer a different plan instead, you can return to the exchange and pick a new plan that will take effect in February or March, depending on when you make the plan selection.

For people who don’t have insurance in 2016 and aren’t exempt from the ACA’s penalty, the penalty will be significantly higher than it was in 2014 and 2015. The penalty will be the greater of $695 per uninsured adult (half that amount for a child) up to $2,085 per household, OR 2.5 percent of household income above the tax filing threshold. For tax filers who owe a penalty, the average penalty is expected to be almost $1,000 in 2016 – about five times what it was for 2014.

WINhealth shutting down

On October 8, WINhealth – one of the two carriers offering plans in Wyoming’s exchange – announced that they would exit the individual market at the end of 2015. At that point, they were still planning to offer offer group plans, but 8,234 people with individual WINhealth plans were informed that they would need to find new coverage for 2016.

The decision to exit the individual market was triggered by the recently-announced shortfall in risk corridors payments. WINhealth found out on October 1 that they would not receive $4.4 million they were due under the risk corridors program (nationwide, insurers are being shorted about $2.5 billion in risk corridors payments).

But Wyoming Insurance Commissioner Tom Glause noted that WINhealth’s decision “did not come as a surprise to the Department [of Insurance],” as they were already aware of the financial challenges WINhealth had been facing prior to the risk corridors shortfall.

And on October 21, the other shoe dropped when WINhealth was placed in receivership by the Wyoming Department of Insurance. They ceased sales of new plans for the rest of 2015, and and will not offer any plans – individual or group – in 2016.

The Wyoming Department of Insurance has been in discussions with several out-of-state carriers about the possibility of them entering the Wyoming market in 2017. But for now, WINhealth’s exit leaves Blue Cross Blue Shield of Wyoming as the sole carrier offering individual and small group plans in the Wyoming exchange for 2016 (Altius(Aetna/Coventry) and UnitedHealthcare also offer small group plans outside the exchange; Celtic and Altius also offers individual plans outside the exchange in some areas).

2016 rates: BCBS of WY up about 6%

2016 rates were already set for BCBS of WY prior to WINhealth’s departure, and despite the lack of competition, the carrier is still bound by the ACA’s medical loss ratio rules requiring at least 80 percent of premiums to be spent on medical claims.

Prior to the release of BCBS of WY’s rate changes for 2016, CEO Rick Schum offered some reassurance to Wyoming exchange enrollees, saying “I would highly doubt any of our customers – or future customers – are in for any sticker shock.”

Wyoming is one of five states that leaves the rate review process entirely up to HHS for ACA-compliant products. It was already known that BCBS of WY had proposed rate hikes of less than 10 percent, as any proposed rate increases of 10 percent or more were made public on Healthcare.gov’s rate review tool in June. Ultimately, BCBS of WY ended up with average rate increases of about 6 percent. The average benchmark premium will be 5.6 percent higher in 2016 than it was in 2015. Benchmark (second-lowest-cost Silver) plan premiums are used to determine subsidy amounts, so the average subsidy be higher in Wyoming in 2016 assuming average incomes remain the same.

WINhealth had proposed a rate increase of 13.37 percent, but their enrollees must instead switch to a different plan for 2016. In most cases, that will be a plan from BCBS of WY, although Celtic and Altius offer plans in limited areas outside the exchange in Wyoming (total enrollment in those plans is negligible as of 2015; the Department of Insurance said in September that BCBS and WINHealth accounted for virtually all of the individual market in Wyoming).

Plans purchased outside the exchange are not eligible for subsidies, and 92 percent of Wyoming’s exchange enrollees receive subsidies to offset the cost of their coverage; they all must select an exchange plan from BCBS for 2016 in order to keep their subsidies. BCBS has 28 different plans from which enrollees can choose.

Time insurance also offered plans outside the exchange in Wyoming in 2015, but they announced in June 2015 that they would exit the individual market nationwide, and would not participate in the 2016 open enrollment period.

ACA makes coverage affordable in Wyoming

As of mid-2015, 92.2 percent of the people enrolled in private plans through the Wyoming exchange were receiving premium tax credits (subsidies).  That’s higher than the percentage in every other state except Mississippi, and quite a bit higher than the national average of 83.7 percent.

Health insurance in Wyoming is much more expensive than the national average, which explains the high percentage of people who qualify for subsidies.  In addition, because coverage is so expensive in Wyoming, the average subsidies is considerably higher there than it is in other states:  Nationwide, the average subsidy is $270 per month; in Wyoming, it’s $424 per month (only Alaska has higher average subsidies in 2015).

Because of the way the ACA’s premium subsidies are structured, they are particularly helpful in regions where the “retail” cost of health insurance is higher than average.  Wyoming – in both 2014 and 2015 – is a great example.  Although Wyoming had the most expensive pre-subsidy health insurance premiums in the US in 2014, an HHS study released in June 2014 illustrates the power of the Obamacare tax credits, which were more substantial in Wyoming in 2014 than in any of the other 35 states where HHS was running the exchange.

Even though Wyoming’s average pre-subsidy rates in 2014 came in at a whopping $536 per person, the average after-subsidy premiums paid by the 93% of Wyoming enrollees who qualify for subsidies is just $113.

Two other states (Arizona and West Virginia) also had average after-subsidy premiums of $113 in 2014, despite the fact that their “retail” rates were considerably lower than Wyoming’s ($272 and $415, respectively).  $113 is higher than the HHS-run marketplace average of $82, but it’s certainly far more affordable than the $536 that residents in sparsely-populated Wyoming would be paying without the Obamacare tax credits.

Cadillac tax particularly concerning in Wyoming

Because health insurance is so much more expensive in Wyoming, the state was concerned about the impact of the ACA’s “Cadillac tax” that was set to go into effect in 2018. The idea behind the tax was to generate revenue by placing an excise tax on employer-sponsored health insurance with premiums that exceed a pre-determined annual cap (the tax is only assessed on the portion of the premium that exceeds the cap).

In 2018, that cap was to be $10,200 for a single individual, and $27,500 for a family plan. Nationally, it’s estimated that just ten percent of employer-sponsored plans would be subject to the tax in 2018, but there was concern that it will impact a far higher percentage of employer-sponsored plan in Wyoming, simply because it’s more costly to provide health insurance in the state.

But on December 18, federal lawmakers passed H.R.2029, a $1.8 trillion federal spending bill that includes a provision to delay the Cadillac tax for two years, pushing its implementation out to 2020.

Only state where uninsured rate increased

In 49 of the 50 states, the uninsured rate decreased from 2013 to 2015 – by a significant margin in many states.  But in Wyoming, according to Gallup data, the uninsured rate was 16.6 percent in 2013, and had increased to 18.2 by the first half of 2015.  The data has a margin of error of plus or minus 4 percentage points, but it’s noteworthy that Wyoming is the only state where the results didn’t show a decrease during the first year and a half of ACA implementation.

Wyoming’s lack of progress on this front is largely blamed on the fact that Wyoming lawmakers have refused to accept federal funding to expand Medicaid under the ACA.  Wyoming also didn’t establish their own state-run exchange, but even among other states that followed the same path (no state-run exchange, and no Medicaid expansion), the average uninsured rate has dropped 28 percent since 2013.

Wyoming’s uninsured rate in 2013 put it squarely in the middle of the pack.  But in 2015, only Texas has a higher uninsured rate.  And while Texas still has nearly 21 percent of their residents without health insurance coverage, that’s down from 27 percent two years ago.

2015 enrollment data

The Wyoming exchange enrolled 21,092 people in private plans during the 2015 open enrollment period (through February 22, including the week-long extension).  This is about a third of the exchange’s total target population.

As of January 9, Wyoming had the highest percentage increase in the country when comparing 2015 enrollment numbers with enrollment totals as of April 2014.  On January 9, the 2015 enrollment count was 42 percent higher than the prior year’s total.  By January 30, the growth over last year had increased to 54 percent – with two more weeks remaining in open enrollment.  HHS had set an enrollment projection of just 15,000 people for Wyoming’s exchange by February 15, and the exchange easily surpassed that goal.  Total enrollment at the end of open enrollment was 176% of what they had at the end of the first open enrollment last year.

But some enrollees didn’t pay their initial premiums and their coverage was never effectuated, while others opted to cancel their plan early in the year.  And some plans and/or subsidies were terminated because the enrollees didn’t provide adequate verification of immigration or financial data.  By the end of June, 18,065 people had in-force private plan coverage through the Wyoming exchange.

Of the people who selected a plan during the 2015 open enrollment period, 48 percent were new to the exchange for 2015.  Among those who still had coverage in force at the end of June, 92.2 percent received premium subsidies that averaged $424 per month. That’s much higher than the national average, but Wyoming’s unsubsidized health insurance rates are also much higher than the national average, necessitating larger subsidies to keep premiums at the percentage of income determined to be affordable under the ACA.

An additional 847 people enrolleed in Medicaid or CHIP through the exchange during the second open enrollment period, qualifying under the state’s unchanged guidelines, as Wyoming has not expanded Medicaid under the ACA.  Medicaid and CHIP enrollment continue year-round.

Wyoming carriers and rates – 2015

Rates decreased in many areas of the country for people willing to switch plans for 2015, but that was not the case in Wyoming.  The NY Times Upshot pegs the increase in benchmark plan premiums in Wyoming at 7 percent or more, although the Kaiser Family Foundation shows the average benchmark plan in Wyoming increasing by just 1.6 percent for 2015.

Across all plans and metal levels in the exchange, a Commonwealth Fund analysis found that rates in Wyoming’s exchange were an average of 5 percent higher in 2015 for a 40 year-old non-smoker.

For people who qualified for subsidies however (roughly 93 percent of enrollees) the state’s high health insurance premiums were dramatically offset by the premium tax credits in 2014, and that continued to be the case in 2015. The average after-subsidy premium for the benchmark plans in Wyoming for a 40-year-old earning $30,000/year was $208 in 2015, a dollar less than it was in 2014.

The federally-run Wyoming health insurance exchange had 40 plans available (up from 18 in 2014) from two health insurance carriers:  Blue Cross Blue Shield of Wyoming and WINHealth Partners, both of which participated in the exchange in 2014.

No Medicaid expansion yet

Unfortunately for Wyoming residents living below the poverty line, the high cost of unsubsidized coverage means that the coverage gap is particularly harsh in Wyoming.  Since the state has not expanded Medicaid under Obamacare, residents with incomes below 100% of poverty are not eligible for subsidies, and Medicaid is not available for most of them either.

Their only alternative is to pay full price for private insurance, which is particularly unrealistic in a state where the average premium is more than five hundred dollars a month.

Medicaid expansion could still come with time. Governor Matt Mead has been discussing the issue with the federal government, and he noted in early November 2014 that HHS is “more open” to modified Medicaid expansion than they were in the past.  Then in late November, the Governor released the details of his Medicaid expansion proposal, which would include modest premiums for enrollees with incomes between 100 percent and 138 percent of poverty, and along with small copays for many newly-eligible enrollees.

But lawmakers proposed a different plan (not vetted for budget neutrality or by HHS) and a Wyoming Senate committee approved a proposal that was essentially a combination of the two.  The full Senate ultimately rejected the bill however, and Medicaid expansion was off the table for the 2015 legislative session.

But in the fall of 2015, Mead renewed his push for Medicaid expansion, and is presenting the legislature with two different budgets – one with Medicaid expansion and one without – so they can see the financial impact of expanding Medicaid. Mead has noted that declining revenue from gas and oil has resulted in the need for a tighter budget in the state, and the federal funding from Medicaid expansion would benefit the state financially – as well as the 17,000 people who are currently in the coverage gap and unable to obtain health insurance.

While 70 percent of Wyoming residents disapprove of the ACA in general, 55 percent support Medicaid expansion according to a recent poll conducted by the University of Wyoming.

2014 enrollment numbers

As of April 19, 2014, 11,970 people had enrolled in private plans in the Wyoming exchange.  By mid-May, 92 percent of them had paid their initial premiums.

The total private plan enrollment was the fourth lowest in the country, but Wyoming has the smallest population in the US.

An additional 2,216 exchange applicants had been found to be eligible for the state’s existing (not expanded) Medicaid or CHIP.

Originally, the federal projection was that Wyoming would have 13,000 private plan enrollees by March 31, 2014. That was revised to around 10,000, and officials were optimistic that a March surge in application volume would put total enrollment into the five figure range.  That projection proved to be correct, and the exchange far surpassed the 10,000 mark by the end of the 2014 open enrollment window.

Wyoming exchange history

Gov. Matt Mead announced in late 2012 that Wyoming would default to the federal health insurance exchange for 2014, with the possibility of moving to a state-run exchange at some unspecified future date.

In 2012, the Wyoming legislature passed a bill requiring a small committee to study the federal government’s implementation and operation of the exchange. The committee will monitor how many state residents use the federal exchange, what problems they encounter, operating costs, and other factors in deciding whether to recommend the state eventually take over operations of the exchange.

The committee held its first meeting in April 2013, and the study may take more than two years according to the committee co-chair.  This round of study continues the evaluation process started by the Wyoming Health Insurance Exchange Steering Committee, which Mead appointed in 2011.

Gov. Mead initially refused to expand Medicaid, but began supporting expansion as the year went on.  Two bills that would expand Medicaid passed out of committee in January by a small margin.  Both failed introduction during the budget session in mid-February, and the 2014 legislative session did not result in any further legislation on the issue.

In November 2014, Gov. Mead and the Health Department presented lawmakers with a modified Medicaid expansion proposal, and the governor asked them to approve it. Although a Senate committee approved a modified version of Mead’s proposal, the full senate rejected it in early February. Medicaid still has not been expanded in Wyoming as of the end of 2015.

Wyoming health insurance exchange links

HealthCare.gov
800-318-2596

Wyoming Insurance Department
Provides consumer protection and support to Wyoming residents by investigating consumer complaints and resolving issues on insurance matters.
(307) 777-7401 / Toll Free: 1-800-438-5768 / wyinsdep@state.wy.us

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

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