Wyoming health insurance exchange / marketplace

Average rate increase just 7.4%, despite only one carrier in exchange

  • By
  • healthinsurance.org contributor
  • October 18, 2016

Wyoming uses the federally-run exchange, so residents enroll through Healthcare.gov.

As of March 2016, there were 22,076 people with individual market coverage through the Wyoming exchange, up from 18,228 a year earlier.

Still just one exchange carrier in 2017

Wyoming is the only state in the US that has just one exchange carrier in 2016, although West Virginia was in that situation in 2014 and 2015, and Alaska nearly ended up with just a single carrier in 2016.

For 2017, Alaska and Wyoming will both have just one exchange carrier, as will be the case in Oklahoma, Alabama, and South Carolina. Numerous states across the country will have partial areas of the state with just a single carrier offering plans in the exchange in 2017.

In the spring of 2016, Melody Health Insurance (which later became Canopy Health Insurance) had announced their plan to offer health insurance in the Wyoming and Nevada exchanges—limited to the Cheyenne and Las Vegas metro areas—for 2017. But the Wyoming Insurance Department confirmed in August that Canopy had been unable to get licensed in Nevada, which was the first step towards getting their Wyoming license.

As a result, they were not able to get licensed in Wyoming, and will not be offering coverage in the Wyoming exchange in 2017. Blue Cross Blue Shield of Wyoming will continue to be the only carrier participating in the exchange in Wyoming in 2017.

Average proposed rate hike just 7.4%

Wyoming also has among the highest premiums in the nation; in 2016, only Alaska and Vermont have higher average benchmark premiums, and the average pre-subsidy premium in the Wyoming exchange is $571 per month—versus a $396 per month average across all the states that use Healthcare.gov.

But despite the lack of competition, the average rate proposed increase for Blue Cross Blue Shield of Woming’s individual market plans is just 7.4 percent for 2017. For perspective, as of mid-October 2016, the average approved rate increase across 40 states and DC is about 25 percent for 2017; Wyoming’s filed average increase is far lower than average for 2017, and only a handful of states have average approved rate hikes lower than what BCBSWY has proposed.

Although a lack of competition in the exchanges obviously means that consumers have few options from which to choose, the ACA’s medical loss ratio applies regardless of how many carriers participate: In the individual market, a health plan must spend at least 80 cents of every premium dollar on medical claims; there’s no mechanism for increasing rates just because there’s no competition.

It’s safe to assume that the rates filed by BCBS of Woming will likely be implemented as-proposed. The state does not have an effective rate review process, which means the federal government (CCIIO) is in charge of reviewing rates in Wyoming (that system does not give federal regulators the ability to deny rate requests; rather, they’re only able to say whether or not the rate request is actuarially justified).

Because most Wyoming exchange enrollees are receiving subsidies, the subsidies will offset the bulk of the rate increases for most enrollees. Because of the way the subsidies interact with the federal poverty level, they keep premium increases in check from one year to the next for eligible enrollees. It’s important to shop around during open enrollment, as the benchmark plan can change from one year to the next. However, in a state with just one participating exchange carrier, the benefit of shopping around is obviously much less significant than it would be in states with multiple carriers.

Effectuated enrollment > 22k

During the 2016 open enrollment period, 23,770 people enrolled in private plans through the Wyoming exchange, including new enrollees and renewals. For perspective, 18,065 people had in-force coverage through the Wyoming exchange as of June 2015, and total enrollment at the end of the 2015 open enrollment period stood at 21,092 people.

Enrollment grew from 2015 to 2016 in all but one county in Wyoming. Only Fremont county (Lander is the county seat) experienced an enrollment decline, with a 267-person drop in enrollment. Wyoming consumer advocates believe that is likely due to the federal government ruling that the Northern Arapahoe Tribe is a large employer and is thus required to offer health insurance to its full-time employees. As a result, some of the tribe’s employees may have switched from exchange plans to group coverage offered by the tribe.

By March 31, 2016, effectuated enrollment through the Wyoming exchange stood at 22,076 people. 92 percent were receiving subsidies that average $459 per month.

All of the enrollments in the Wyoming exchange for 2016 are through Blue Cross Blue Shield of Wyoming, since WINhealth stopped offering coverage as of December 31, 2015 (details below), leaving BCBS of WY as the lone carrier. All former WINhealth members had to pick a new plan by the end of December; otherwise they were uninsured as of January 1. But they also qualified for a special enrollment period (through February 29) because loss of coverage is a qualifying event.

Open enrollment for 2016 ended on January 31. Open enrollment for 2017 coverage will begin again on November 1, 2016, and will continue through January 31, 2017. Between now and November 1, you can enroll in a plan through the exchange (or off-exchange) if you experience a qualifying event. Native Americans can enroll year-round, as can anyone eligible for Medicaid or CHIP.

Increased penalty for being uninsured in 2016

For people who don’t have insurance in 2016 and aren’t exempt from the ACA’s penalty, the penalty is significantly higher than it was in 2014 and 2015. The penalty for 2016 is 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. Any applicable penalty for 2016 will be collected when tax returns are filed in early 2017.

No DOI oversight for Direct Primary Care Practices

In early 2016, Governor Mead signed SF49 into law, exempting direct primary care programs from state Department of Insurance regulations and oversight. That makes it easier for doctors to establish direct primary care practices, charging members a set monthly fee in return for whatever primary care the patient might need.

Particularly in states like Wyoming, where unsubsidized health insurance is much more expensive than average, and where the “subsidy cliff” is much more of an issue than it would be in places with lower premiums, direct primary care models can be an attractive alternative to higher-priced major medical health insurance. And like healthcare sharing ministries, direct primary care practices pose a potential threat to the stability and health of the regular insurance risk pool, since sicker applicants are more likely to gravitate to higher-priced – but much more comprehensive – ACA-compliant health insurance.

With that said, it’s important to note that membership in a direct primary care practice does not constitute minimum essential coverage under the ACA. So if an individual is not exempt from the ACA’s individual mandate and relies solely on a direct primary care membership, the ACA’s penalty for being uninsured will be assessed when that person files a tax return. A direct primary care membership can be used in conjunction with a health insurance plan in order to fulfill the ACA’s individual mandate, but it cannot replace major medical health insurance.

It’s also important to note that direct primary care memberships only cover primary care. If a members needs care that involves hospitalization or treatment that cannot be provided in a primary care setting, the primary care membership will not provide any value.

WINhealth liquidated

On October 8, 2015, WINhealth – one of the two carriers that offered plans in Wyoming’s exchange in 2015 – 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 shortfall in risk corridors payments. WINhealth found out on October 1, 2015 that they would not receive $4.4 million they were due under the risk corridors program (nationwide, insurers were 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 at that point, and in January 2016, a Laramie County District judge signed an order to liquidate the company. The company’s assets will be used to pay claims that were incurred through December 31, 2015, and the Wyoming Life and Health Guaranty Association will serve as a back-up if there aren’t enough assets to cover claims.

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 or beyond. 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%

Wyoming’s pre-subsidy health insurance rates are much higher than the national average. Only Alaska and Vermont have higher pre-subsidy average benchmark rates in the exchange for 2016.

90 percent of the people who selected a plan through the Wyoming exchange for 2016 were eligible for premium subsidies to offset the cost of their coverage. For those enrollees, the average pre-subsidy premium is $571/month, which is far higher than the $396/month average across all 38 states that use Healthcare.gov. But after subsidies, the average premium in Wyoming is just $117/month – only slightly higher than the $106/month average for Healthcare.gov states.

Premium subsidies cover an average of 80 percent of the cost of coverage for eligible enrollees, and are an excellent example of how the ACA’s subsidies even out discrepancies in pricing from one state to another, for enrollees with income under 400 percent of the poverty level.

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 is 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 is higher in Wyoming in 2016 assuming average incomes remained the same.

WINhealth had proposed a rate increase of 13.37 percent, but their enrollees ended up having to switch to a different plan for 2016. In most cases, that was a plan from BCBS of WY (the carrier offers 28 different plan options in the exchange), although Celtic and Altius offer plans in limited areas outside the exchange in Wyoming (total enrollment in those plans was negligible as of 2015; the Department of Insurance said in September 2015 that BCBS and WINHealth accounted for virtually all of the individual market in Wyoming). Plans purchased outside the exchange are not eligible for subsidies though.

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

Among people who enrolled in coverage through the Wyoming exchange during the 2016 open enrollment period, 90 percent are receiving premium tax credits (subsidies). Across all states that use Healthcare.gov, only Florida has a higher subsidy-eligibility rate, at 91 percent, and Mississippi is tied with Wyoming at 90 percent (both of those states have considerably lower pre-subsidy premium averages and average subsidy amounts than Wyoming. Across all Healthcare.gov states, an average of 85 percent of exchange enrollees are receiving subsidies.

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: Among all Healthcare.gov states, the average subsidy is $290 per month; in Wyoming, it’s $454 per month (only Alaska has higher average subsidies in 2016).

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 is a great example. Although Wyoming has among the most expensive pre-subsidy health insurance premiums in the US, the after-subsidy premiums are just a few dollars per month higher than average. Subsidies make up most of the difference, for people whose income doesn’t exceed 400 percent of the poverty level.

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, 2015, 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 (that is still the case, although Governor Mead is pushing for expansion). 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 dropped 28 percent from 2013 to mid-2015.

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. Shortly after that, 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 presented 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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