Edit: The Senate passed H.R.1319 on March 6, and the House passed the bill again on March 10. President Biden signed it into law on March 11. CMS published some initial information for marketplace enrollees on March 12.
Last weekend, the House of Representatives passed the American Rescue Plan Act of 2021 (H.R. 1319), an economic stimulus package designed to provide relief from the impact of COVID-19 on Americans. The bill has the support of the majority of Americans – including those registered as Republicans and Independents.
H.R. 1319 is now under consideration in the Senate, so we don’t yet know exactly what will be included in the final legislation. But the health insurance provisions in the House version of the legislation are unchanged from what the House Ways and Means Committee had initially proposed, and have not been sticking points for the bill thus far.
Several provisions in H.R. 1319 are designed to make health coverage more accessible and affordable. Today we’re taking a look at how the legislation would change the ACA’s premium subsidy structure for 2021 and 2022, and the impact that would have on the premiums that Americans pay for individual and family health coverage.
Help for 12 million marketplace enrollees, plus more who will newly enroll
If you’re among the 12 million people who purchase ACA-compliant coverage in the health insurance marketplaces, your coverage is likely to become more affordable under H.R. 1319.
What’s more, the Congressional Budget Office estimates that an additional 1.7 million people – most of whom are currently uninsured – would enroll in health plans through the marketplaces in 2022 as a result of the enhanced premium subsidies.
No one would pay more than 8.5% of their income for the benchmark plan
Some opponents of the legislation have criticized its premium subsidy enhancements as a handout to wealthy Americans. But that’s only because the legislation is designed to remedy the subsidy cliff – which can result in some households paying as much as half of their annual income for health insurance premiums. It’s a situation that’s obviously neither realistic nor sustainable for policyholders.
The Affordable Care Act (ACA) only provides premium tax credits (aka premium subsidies) if a household’s ACA-specific modified adjusted gross income doesn’t exceed 400 percent of the federal poverty level. For 2021 coverage in the continental U.S., that’s about $51,000 for a single person and $104,800 for a family of four. Depending on where you live, that might be a comfortable income – but not if you have to spend 20, 30, 40 or even 50 percent of that income on health insurance.
H.R. 1319’s adjustment to the premium tax credit guidelines would temporarily – for this year and next year – eliminate the income cap for premium subsidies. That means that – regardless of income – no one would have to pay more than 8.5 percent of their household income for the benchmark plan (the second-lowest-cost Silver plan available in the exchange in a given area).
Under this approach, subsidies would phase out gradually as income increases. Plan buyers would not be eligible for a subsidy if the benchmark plan’s full price wouldn’t be more than 8.5 percent of the household’s income. But in some areas of the country – and particularly for older applicants, who can be charged as much as three times the premiums young adults pay – premium subsidy eligibility could end up extending well above 400 percent of the poverty level.
In addition to addressing the subsidy cliff, H.R. 1319 also enhances premium subsidies for marketplace buyers who are already subsidy-eligible. The subsidies would get larger across the board, making after-subsidy premiums more affordable for most enrollees. At every income level, the legislation would reduce the percentage of income that people are expected to pay for the benchmark plan, which would result in larger subsidies.
Larger subsidies? Here are a few examples.
How much larger? It would depend on location, income, and age. Let’s take a look at some examples.
We’ll consider applicants with various income levels and ages in three locations: Albuquerque, New Mexico – where premiums are among the nation’s lowest; Jackson, Mississippi – where premiums are close to the national average; and Cheyenne, Wyoming – where premiums are among the nation’s highest.
In each location, we’ll see how things would play out for a 25-year-old, a 60-year-old, and a family of four (45-year-old parents, and kids who are 13 and 10), all at varying income levels.
In most cases, you’ll notice that the subsidy amount is larger under H.R. 1319, resulting in a lower benchmark premium and also a lower price for the lowest-cost plan available to that applicant (or more plans available with no premium at all). This is because the new legislation specifically reduces the percentage of income that people have to pay for the benchmark plan. That, in turn, drives up the subsidy amounts that are necessary to reduce the benchmark premium. And since premium subsidies can be applied to any metal-level plan, it also results in a lower cost for the other available plans (or more premium-free plans, depending on the circumstances).
As you consider these numbers, note that if the current subsidy amount is $0, either the benchmark plan is already considered affordable for that person, or their income is over 400 percent of the poverty level and subsidies are simply not available. If the subsidy amount is $0 under the H.R. 1319 scenario, it means that the benchmark plan would not cost more than 8.5 percent of the applicant’s income.
As you can see, the additional subsidies would be widely available, but would be more substantial for people who are currently paying the highest premiums. Under the current rules, it may not be realistic for our Wyoming family to pay more than $30,000 in annual premiums (enrolling in the benchmark plan, with premiums in excess of $2,500 per month). The American Rescue Plan Act would bring their annual premiums for the benchmark plan down to under $10,000, which is much more manageable.
The legislation is not, however, a giveaway to wealthy Americans. If that family earned $500,000, they still wouldn’t get a premium subsidy under H.R. 1319, because even at $2,528/month, the full-price cost of the benchmark plan would only amount to 6 percent of their income. Unlike Medicare and the tax breaks for employer-sponsored health insurance, financial assistance with individual market health insurance would not extend to the wealthiest applicants.
By capping premiums at 8.5 percent of income, H.R. 1319 provides targeted premium assistance only where it’s needed. And by enhancing the existing premium subsidies, the legislation makes it easier for people at all income levels to afford health coverage.
Premium enhancements would be retroactive but also temporary
Assuming these premium subsidy enhancements are approved by the Senate, they’ll be retroactive to the start of 2021. Current enrollees will be able to start claiming any applicable extra subsidy immediately, or they can wait and claim it on their 2021 tax return. The additional premium subsidies would also be available for 2022, but would no longer be available as of 2023 unless additional legislation is enacted to extend them.
And there’s currently a special enrollment period – which continues through May 15 in most states – during which people can sign up for coverage if they haven’t already. In most states, this window can also be used by people who already have coverage and wish to change their plan, so this is definitely a good time to reconsider your health insurance coverage and make sure you’re taking advantage of the benefits that are available to you.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
https://www.maddoxinsured.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsured.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-03-05 15:00:282021-03-24 15:00:04How the American Rescue Plan Act will boost marketplace premium subsidies
Last weekend, the House of Representatives passed the American Rescue Plan Act of 2021 (H.R. 1319), an economic stimulus package designed to provide relief from the impact of COVID-19 on Americans. The bill has the support of the majority of Americans – including those registered as Republicans and Independents.
H.R. 1319 is now under consideration in the Senate, so we don’t yet know exactly what will be included in the final legislation. But the health insurance provisions in the House version of the legislation are unchanged from what the House Ways and Means Committee had initially proposed, and have not been sticking points for the bill thus far.
Several provisions in H.R. 1319 are designed to make health coverage more accessible and affordable. Today we’re taking a look at how the legislation would change the ACA’s premium subsidy structure for 2021 and 2022, and the impact that would have on the premiums that Americans pay for individual and family health coverage.
Help for 12 million marketplace enrollees, plus more who will newly enroll
If you’re among the 12 million people who purchase ACA-compliant coverage in the health insurance marketplaces, your coverage is likely to become more affordable under H.R. 1319.
What’s more, the Congressional Budget Office estimates that an additional 1.7 million people – most of whom are currently uninsured – would enroll in health plans through the marketplaces in 2022 as a result of the enhanced premium subsidies.
No one would pay more than 8.5% of their income for the benchmark plan
Some opponents of the legislation have criticized its premium subsidy enhancements as a handout to wealthy Americans. But that’s only because the legislation is designed to remedy the subsidy cliff – which can result in some households paying as much as half of their annual income for health insurance premiums. It’s a situation that’s obviously neither realistic nor sustainable for policyholders.
The Affordable Care Act (ACA) only provides premium tax credits (aka premium subsidies) if a household’s ACA-specific modified adjusted gross income doesn’t exceed 400 percent of the federal poverty level. For 2021 coverage in the continental U.S., that’s about $51,000 for a single person and $104,800 for a family of four. Depending on where you live, that might be a comfortable income – but not if you have to spend 20, 30, 40 or even 50 percent of that income on health insurance.
H.R. 1319’s adjustment to the premium tax credit guidelines would temporarily – for this year and next year – eliminate the income cap for premium subsidies. That means that – regardless of income – no one would have to pay more than 8.5 percent of their household income for the benchmark plan (the second-lowest-cost Silver plan available in the exchange in a given area).
Under this approach, subsidies would phase out gradually as income increases. Plan buyers would not be eligible for a subsidy if the benchmark plan’s full price wouldn’t be more than 8.5 percent of the household’s income. But in some areas of the country – and particularly for older applicants, who can be charged as much as three times the premiums young adults pay – premium subsidy eligibility could end up extending well above 400 percent of the poverty level.
In addition to addressing the subsidy cliff, H.R. 1319 also enhances premium subsidies for marketplace buyers who are already subsidy-eligible. The subsidies would get larger across the board, making after-subsidy premiums more affordable for most enrollees. At every income level, the legislation would reduce the percentage of income that people are expected to pay for the benchmark plan, which would result in larger subsidies.
Larger subsidies? Here are a few examples.
How much larger? It would depend on location, income, and age. Let’s take a look at some examples.
We’ll consider applicants with various income levels and ages in three locations: Albuquerque, New Mexico – where premiums are among the nation’s lowest; Jackson, Mississippi – where premiums are close to the national average; and Cheyenne, Wyoming – where premiums are among the nation’s highest.
In each location, we’ll see how things would play out for a 25-year-old, a 60-year-old, and a family of four (45-year-old parents, and kids who are 13 and 10), all at varying income levels.
In most cases, you’ll notice that the subsidy amount is larger under H.R. 1319, resulting in a lower benchmark premium and also a lower price for the lowest-cost plan available to that applicant (or more plans available with no premium at all). This is because the new legislation specifically reduces the percentage of income that people have to pay for the benchmark plan. That, in turn, drives up the subsidy amounts that are necessary to reduce the benchmark premium. And since premium subsidies can be applied to any metal-level plan, it also results in a lower cost for the other available plans (or more premium-free plans, depending on the circumstances).
As you consider these numbers, note that if the current subsidy amount is $0, either the benchmark plan is already considered affordable for that person, or their income is over 400 percent of the poverty level and subsidies are simply not available. If the subsidy amount is $0 under the H.R. 1319 scenario, it means that the benchmark plan would not cost more than 8.5 percent of the applicant’s income.
As you can see, the additional subsidies would be widely available, but would be more substantial for people who are currently paying the highest premiums. Under the current rules, it may not be realistic for our Wyoming family to pay more than $30,000 in annual premiums (enrolling in the benchmark plan, with premiums in excess of $2,500 per month). The American Rescue Plan Act would bring their annual premiums for the benchmark plan down to under $10,000, which is much more manageable.
The legislation is not, however, a giveaway to wealthy Americans. If that family earned $500,000, they still wouldn’t get a premium subsidy under H.R. 1319, because even at $2,528/month, the full-price cost of the benchmark plan would only amount to 6 percent of their income. Unlike Medicare and the tax breaks for employer-sponsored health insurance, financial assistance with individual market health insurance would not extend to the wealthiest applicants.
By capping premiums at 8.5 percent of income, H.R. 1319 provides targeted premium assistance only where it’s needed. And by enhancing the existing premium subsidies, the legislation makes it easier for people at all income levels to afford health coverage.
Premium enhancements would be retroactive but also temporary
Assuming these premium subsidy enhancements are approved by the Senate, they’ll be retroactive to the start of 2021. Current enrollees will be able to start claiming any applicable extra subsidy immediately, or they can wait and claim it on their 2021 tax return. The additional premium subsidies would also be available for 2022, but would no longer be available as of 2023 unless additional legislation is enacted to extend them.
And there’s currently a special enrollment period – which continues through May 15 in most states – during which people can sign up for coverage if they haven’t already. In most states, this window can also be used by people who already have coverage and wish to change their plan, so this is definitely a good time to reconsider your health insurance coverage and make sure you’re taking advantage of the benefits that are available to you.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
https://www.maddoxinsured.com/wp-content/uploads/2021/03/american-rescue-plan-premium-subsidies.png13202093wpmaddoxinshttps://www.maddoxinsured.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-03-05 15:00:282021-03-06 14:10:50How the American Rescue Plan Act would boost marketplace premium subsidies
Idaho is final state to open COVID-related enrollment window
Before we delve into this week’s news, a reminder that enrollment is now open for 2021 individual/family health insurance in every state except Idaho – but Idaho’s enrollment period will start on Monday. Uninsured people have another opportunity to sign up for coverage, and in most states, people who already have coverage can use this window as an opportunity to switch to a different plan if it would better meet their needs.
The Biden administration and the states that run their own exchanges are also pouring a great deal of money into marketing and outreach during this period, in an effort to reach the millions of uninsured Americans who don’t yet know about the coverage and financial assistance available to them via the marketplace or Medicaid. In most states, the enrollment window continues through May 15, but there are several states with different deadlines.
Bills under consideration in Maryland, California would connect unemployment applicants with health coverage
California S.B. 644, introduced last week, would help to connect unemployed California residents with health coverage resources, starting in July 2022. Under the terms of the legislation, the California Employment Development Department (EDD) would provide Covered California (the state-run exchange) with contact information for people who apply for programs administered by the EDD, including unemployment benefits, state disability, paid family leave, etc. Covered California would then reach out to these individuals, determine whether they’re eligible for Medi-Cal or premium subsidies, and help them get enrolled in coverage if they choose to do so.
In Maryland, a similar bill (H.B. 1002) would allow people seeking unemployment benefits to consent to having their contact information and other relevant information shared with Maryland Health Connection (the state-run exchange) and the Maryland Department of Health. These agencies could then determine whether the resident would be eligible for financial assistance with their health insurance, and help them enroll in coverage. Maryland already has an “easy enrollment” program that connects residents with the health insurance exchange via their tax returns; H.B.1002 would expand the outreach to include people dealing with the loss of a job.
DOJ asks Supreme Court to cancel hearing in Medicaid work requirement case
Work requirements are not currently in effect in any state, and would not be compatible with the current rules that allow states to receive additional COVID-related federal Medicaid funding, on the condition that enrollees’ coverage not be terminated during the pandemic emergency period. But some states, including Arkansas, hope to eventually reimpose a Medicaid work requirement.
The Biden administration notified states earlier this month that the Medicaid work requirements that were approved over the last few years are now being reconsidered. Arkansas, which had the previous administration’s support in the work requirement lawsuit, filed a brief asking the Supreme Court to ignore the Department of Justice’s request and continue with the scheduled oral arguments next month. But Arkansas officials have also said that they will not seek reapproval for the work requirement when the current waiver expires at the end of this year, and are instead considering a work incentive program that would provide private coverage to people who participate in the program, and traditional Medicaid to those who don’t.
Virginia lawmakers head to conference committee over reinsurance funding
Virginia lawmakers have been working on a bill to create a reinsurance program in the state. But as has been the case in some other states that have considered reinsurance programs, there’s disagreement over how to cover the state’s portion of the funding.
The measure passed by Virginia’s House of Delegates earlier this month called for an assessment on individual/family and large group health plans in the state (but not small-group plans), set at 1% of the prior year’s premium revenue. But the Senate has proposed funding the state’s share of the reinsurance program – estimated at $40 to $60 million – from general fund revenues, without the need for an assessment on health insurers.
The two chambers are taking the measure into a conference committee, and have until March 1 to come to an agreement. Assuming they do reach an agreement, the reinsurance program is slated to take effect in 2023 – but it’s possible that the conference committee could work out an arrangement that allows it to take effect in 2022 instead. (Most other states that have established reinsurance programs have had them up and running by the plan year immediately following the enactment of legislation to start the program.)
Iowa, Kentucky Houses approve bills limiting insulin cost-sharing; other states consider similar bills
Yesterday, Kentucky’s House of Representatives voted unanimously to pass H.B. 95, which would require state-regulated health plans to cap cost-sharing for insulin at $30/month, starting in 2022. The measure now heads to Kentucky’s Senate for further consideration. A similar bill – but with a cost-sharing limit of $100/month – passed in Iowa’s House of Representatives earlier this month.
A bill that would cap insulin cost-sharing at $50/month was introduced in California’s Senate last week. And although Illinois was one of the states that enacted legislation last year to cap insulin cost-sharing at $100/month, a new bill was introduced in the Illinois House last week that would lower that cap to $30/month. West Virginia also enacted a $100/month cap last year, but a new bill was introduced this month in West Virginia’s Senate that would lower the cap to $25/month.
In 2019, Colorado became the first state to enact legislation to limit cost-sharing for insulin. Several other states enacted similar legislation last year, and several more had already begun considering bills to limit cost-sharing for insulin earlier this year.
South Dakota becomes fifth state to allow non-insurance Farm Bureau health plans
South Dakota Farm Bureau noted that its plans to partner with a third-party administrator to offer the new plans. SDFB does intend to cover the Affordable Care Act’s essential health benefits, but it’s expected that that plan will use medical underwriting as a mechanism to keep costs down.
Oscar Health to become publicly traded company, with 31 million shares for sale next week
Oscar Health has filed to become a publicly traded company, with stock sales expected to begin next week. Oscar plans to offer 31 million shares, priced at $32 – $34 per share, potentially raising a billion dollars in the initial public offering. Shares will trade on the NY Stock Exchange under the ticker symbol OSCR.
Oscar offers health plans in 18 states this year. They have more than half a million members, most of whom are enrolled in individual/family plans obtained via the health insurance marketplaces. Although most insurers in the individual market struggled with losses in the early years of ACA implementation, many of them have since become profitable. But Oscar’s losses have continued to mount, despite steady expansion into new states and expansion into the Medicare Advantage market last year.
Senate committee hearings focus on HHS Secretary nominee Xavier Becerra
The Senate Health Committee held a hearing yesterday with California Attorney General Xavier Becerra, President Biden’s nominee to lead the Department of Health and Human Services. Another hearing takes place today, with the Senate Committee on Finance. The committees will then make a recommendation to the rest of the Senate, and the nomination will be sent to the full Senate for debate and a confirmation vote. If Becerra is confirmed, he would be the first Latino Secretary of Health and Human Services.
Becerra was previously in the U.S. House of Representatives from 1993 to 2017. He voted for the Affordable Care Act in 2009/10 and then voted to protect it numerous times over the ensuing years. Becerra became California’s Attorney General in 2017, taking over from Kamala Harris when she was elected to the Senate. He led numerous legal battles against the Trump administration, and some Senate Republicans have expressed opposition to his nomination.
Democrats and the White House have expressed confidence that Becerra will be confirmed. With the 50-50 split in the Senate, Becerra could be confirmed on a party-line vote, with Vice President Kamala Harris casting the tie-breaking vote. But moderate West Virginia Democrat Joe Manchin has indicated that he’s undecided on Becerra’s nomination. There are, however, moderate Republicans who may support Becerra’s confirmation.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
COVID-related enrollment window starts in most states
Although open enrollment ended two months ago in most of the country, a new one-time enrollment opportunity is available for 2021 coverage. Uninsured Americans nationwide have access to this enrollment window, and in most states, it can also be used by people who want to pick a different plan or switch from off-exchange to on-exchange coverage.
This enrollment window – a response to the ongoing COVID emergency – is now underway nationwide, with the exception of Idaho, which announced on Monday that a special enrollment period would begin March 1. In almost every state, the enrollment period continues through May 15, although there are seven state-run exchanges that have – for now – different end dates:
If you’re not yet enrolled in health coverage for 2021, or if you’re enrolled in something like a short-term plan, Farm Bureau plan, or health care sharing ministry plan, this enrollment window – which does not require a qualifying event – is an opportunity to secure real health insurance coverage for the rest of the year.
CMS notifies states that Medicaid work requirements are being reconsidered
Last week, the Biden administration began notifying states with approved Medicaid work requirements that CMS is considering withdrawing the approval for these programs. The letters were sent to Arizona, Arkansas, Georgia, Indiana, Nebraska, New Hampshire, Ohio, South Carolina, Utah, and Wisconsin, and clarify that CMS “has preliminarily determined that allowing work and other community engagement requirements to take effect … would not promote the objectives of the Medicaid program.”
There are currently no Medicaid work requirements in effect. Some have been overturned by the courts, some have been postponed voluntarily by the states, and others have been suspended or postponed due to the COVID pandemic and the ban on coverage terminations that states are required to adhere to in order to receive enhanced federal Medicaid funding during the pandemic. The Supreme Court will hear oral arguments next month in Arkansas v. Gresham, to determine whether the Trump administration’s approval of a Medicaid work requirement in Arkansas was lawful.
CMS also sent a letter (see Michigan’s here) last week to states that currently operate 1115 waivers, rescinding a previous letter that former CMS Administrator Seema Verma sent to states in early January. Verma’s letter had stated that if CMS were to terminate or withdraw approval for part or all of a state’s 1115 waiver, there would be a nine-month delay before the changes took effect.
South Dakota legislature passes bill to allow sale of Farm Bureau plans
Last week, we told you about a bill in South Dakota that would allow the state to join Tennessee, Kansas, Iowa, and Indiana in allowing Farm Bureau (or other agricultural organizations domiciled in the state for at least 25 years) to sell medically underwritten health plans that would specifically not be considered health insurance and thus would be exempt from insurance laws and regulations, including state laws as well as the Affordable Care Act’s rules.
The bill had already passed the Senate at that point, and has since passed in the South Dakota House as well. It’s now under consideration by GOP Gov. Kristi Noem, who consistently voted against the Affordable Care Act during her time in Congress.
There are other states where Farm Bureau partners with health insurers to offer ACA-compliant health insurance (Michigan is an example), and the Nebraska Farm Bureau partners with Medica to offer guaranteed-issue short-term health insurance during a limited annual enrollment period. But these approaches are not the same as allowing an agricultural organization to offer products that are specifically not considered health insurance.
Kansas Senate legislation would allow short-term health plans in Kansas to follow federal rules
Kansas is one of the states where the rules for short-term health plans are more restrictive than the current federal rules. But S.B. 199, introduced last week in the Kansas Senate, would change that. Kansas currently limits short-term health plans to a single renewal, which means their total duration cannot exceed 24 months. S.B. 199 would allow short-term health plans in Kansas to have total durations of up to 36 months – in line with current federal rules. The Biden administration may roll back the Trump-era rules for short-term plans, however, which would eventually make more relaxed state rules moot.
Aetna plans to rejoin exchanges for 2022
CVS Health/Aetna plans to offer health coverage in at least some health insurance exchanges during the open enrollment period that starts this November, although the insurer has not yet provided details in terms of where it will participate. Aetna had previously offered coverage in some exchanges, but had exited all of them by the end of 2017, and has not participated since. CVS/Aetna opting back into the exchanges would continue the trend that has been ongoing in 2019, 2020, and 2021, with insurers joining or rejoining the exchanges, after numerous insurers – including Aetna – left the exchanges in 2017 and 2018.
Aetna’s previous exit from the health insurance exchanges happened before the company was acquired by CVS. But the exit was controversial, and linked to the Department of Justice’s decision to block a merger between Humana and Aetna. Here’s what David Anderson wrote about this in 2016, and Charles Gaba has put together a timeline of Aetna’s 2016 decision-making process.
Washington state Senate committee approves legislation to ensure coverage of gender-affirming healthcare
Washington state lawmakers are considering S.B. 5313, which would require state-regulated health plans to provide non-discriminatory coverage for medically necessary gender-affirming care. Insurers would not, for example, be able to deny coverage for services needed by transgender members, such as facial feminization, breast reductions, breast implants, etc. by classifying them as cosmetic procedures.
The bill was overwhelmingly approved last week by the Washington Senate’s Committee on Health and Long Term Care.
Rhode Island legislation would create commission to consider single-payer health program
Legislation was introduced in Rhode Island last week that calls for the creation of a special legislative committee tasked with “a comprehensive study to determine the pros and cons of implementing a single-payer (health coverage) program in Rhode Island.” The legislation notes that an “improved Medicare-for-all type single-payer program” would be in the state’s best interest. There are not currently any states that have single-payer health coverage systems, although there are others that are considering similar studies.
Medicaid buy-in legislation introduced in West Virginia
Legislation has been introduced in several states this year that would create Medicaid buy-in programs. With the introduction of H.B. 2241, West Virginia is the latest state where lawmakers are considering this possibility. The idea is to create a public option program by allowing residents – who would not otherwise be eligible for Medicaid – to purchase Medicaid coverage as an alternative to purchasing private health insurance. There are not yet any states where Medicaid buy-in programs have been enacted; Nevada has come the closest, but the Medicaid buy-in legislation that lawmakers passed in 2017 was vetoed by Nevada’s governor.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
In most states, the enrollment window applies to anyone eligible to use the marketplace, including people who are already enrolled and want to make a plan change. But some of the state-run exchanges are limiting eligibility to only people who are currently uninsured, or to people who aren’t already enrolled through the exchange. And some states are extending the COVID-related enrollment window to off-exchange plans as well, although financial assistance is never available outside the exchange.
If you’re uninsured or know someone who is, this is an opportunity to have coverage in place for the rest of 2021, with an effective date as early as March 1. Millions of uninsured Americans are eligible for premium subsidies substantial enough to cover the full cost of at least some plans in the marketplace. And Congress is considering COVID relief measures (described below) that would make coverage even more affordable.
House committees propose health insurance provisions as part of COVID package
For 2021 and 2022, the normal rules for the percentage of income a person is expected to pay for on-exchange health insurance would be modified to be much more generous. People with income up to 150 percent of the federal poverty level would pay nothing for the benchmark plan. And nobody would pay more than 8.5 percent of their income, including people who earn over 400 percent of the poverty level (and are currently not eligible for a premium tax credit at all, regardless of how much of their income they have to pay for health coverage).
For 2020 only, excess premium tax credits would not have to be repaid to the IRS. This is something that several insurance commissioners from around the country suggested to President Biden before he took office. Premium subsidy reconciliation can catch people off guard at the best of times — and 2020 was a particularly complicated year.
People receiving unemployment benefits in 2021 would receive a premium tax credit that would fully cover the cost of the benchmark plan.
The House Energy and Commerce Committee also published its proposed COVID relief measures this week, including a provision that would provide additional financial incentives for the states to expand Medicaid eligibility if they haven’t already. There are still a dozen states that haven’t expanded Medicaid.
Under current rules, if and when they expand eligibility, the federal government will cover 90 percent of the cost for the newly eligible population, and will continue to fund the rest of the state’s Medicaid program at the state’s normal matching rate (varies from 50 percent to about 76 percent, depending on the state). But under the committee’s legislative proposal relating to Medicaid, states that newly expand Medicaid would get an additional 5 percent federal funding match for their whole Medicaid program, for the first two years of Medicaid expansion.
The committees will markup these proposals this week, and a floor vote in the House on the final COVID relief legislation is planned for later this month.
Virginia House bill would implement reinsurance program in 2023
Legislation was introduced in Virginia last month to create a reinsurance program in the state. Last week, the Virginia House of Delegates passed the bill by a wide margin, and a Virginia Senate committee unanimously agreed to consider the bill during a special session that starts today.
If it’s passed and signed into law, the legislation calls for the state to submit a 1332 waiver proposal to the federal government by January 2022, and for the reinsurance program to be implemented by January 2023. (This is a fairly long timeline. We’ve seen several states implement reinsurance programs over the last few years, often with the program in place for the plan year immediately following the passage of the legislation that authorized it.)
Montana House passes bill to prohibit abortion coverage for exchange plans
Last week, we told you about a bill in Montana’s House that would prohibit on-exchange health plans in Montana from covering abortion services. On Friday, the bill passed in the House by a wide margin, and mostly along party lines. (Four Democrats voted yes, while one Republican voted no.) It’s now with the Montana Senate’s Judiciary Committee for further review. Montana is currently among the minority of states where abortion coverage can be provided under on-exchange plans and at least some plans do offer this coverage.
South Dakota Senate passes legislation to allow non-insurance Farm Bureau health plans
South Dakota’s Senate passed S.B.87 last week, which would allow a nonprofit agricultural organization, domiciled in the state for at least 25 years, to offer non-insurance health benefits to its members. The legislation, which was proposed by South Dakota Farm Bureau, would specifically exempt such health plans from insurance laws or oversight. Tennessee, Kansas, Iowa, and Indiana already allow Farm Bureau health plans to be sold with similar rules. (The plans are not considered health insurance and are thus not subject to insurance laws or regulations.)
The bill is now with the South Dakota House of Representatives, where the Agriculture and Natural Resources Committee approved it 11-1 this week, sending it to a vote on the House floor. The American Cancer Society has expressed strong opposition to the bill, noting that the proposed non-insurance health plans “have the potential of segmenting the insurance market, driving up premiums and making it harder for South Dakotans who live with serious or chronic disease to find health insurance.”
State lawmakers introduce Medicaid buy-in legislation
This year, lawmakers in several states have introduced various forms of Medicaid buy-in legislation:
Georgia: S.B. 83/H.B. 214 would create a Medicaid buy-in program that would be available to anyone not otherwise eligible for Medicaid, Medicare, or PeachCare for Kids (Georgia’s CHIP).
Iowa: S.F. 220 would create a buy-in program for the Hawk-i program (Iowa’s CHIP). It would allow families to purchase coverage for their kids (and young adults up to age 26) through the program if their household income is too high to meet the normal eligibility guidelines. (Currently, 302 percent of the federal poverty level.) The plan would be available through Iowa’s marketplace and could be used with premium tax credits and cost-sharing reductions for eligible enrollees.
Oklahoma: H.B. 1808 would create a Medicaid buy-in program in the state. The bill would alter the existing Oklahoma statute that directs the state to create a Medicaid buy-in program for people with disabilities if funds become available. The funding aspect is key; Oklahoma has not yet created a Medicaid buy-in program for people with disabilities. But another bill was introduced in Oklahoma last week, calling for the removal of the “if funds become available” language in the existing statute.
South Carolina: H. 3573 would create a Medicaid buy-in program that would be available to people who are not eligible for premiums tax credits under the ACA, Medicaid, Medicare, or affordable employer-sponsored coverage.
Tennessee: S.B. 418/H.B. 602 would create a Medicaid buy-in program that would be available to people who are not eligible for premium tax credits, affordable employer-sponsored coverage, Medicaid, or Medicare. (The wording of the Tennessee legislation is very similar to the South Carolina legislation).
Biden administration puts Trump-era association health plan rule appeal on hold
In 2018, the Trump administration relaxed the rules for association health plans (AHPS), allowing self-insured people to join AHPs, as well as small groups that share only a common geographical location. The rules would also have allowed for the creation of these associations for the sole purpose of offering health insurance, without any other business purpose. These rules were soon challenged in court, and vacated by a judge in 2019. The Trump administration appealed the decision, and oral arguments in the appeal were heard by the D.C. Circuit Court in November 2019.
But a ruling had not yet been handed down by the time the Biden administration took office, and the new administration soon asked the court to stay the appeal. The court granted that request this week, so the appeal is on hold while the new leadership at the Department of Labor reviews the case, with status reports due every two months.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
The SEP applies in the 36 states that use HealthCare.gov, but 12 of the other 15 state-run exchanges have also announced similar enrollment windows — some of which are already underway:
These state-run exchanges are taking a mixed approach to this enrollment window, with some allowing anyone to enroll, and others limiting it to only people who are currently uninsured. There are only three other states that run their own exchange platforms but have not yet announced COVID-related special enrollment periods: Connecticut, Idaho, and Vermont.
House, Senate legislation would make ACA premium subsidies more generous
One of the most important aspects of these pieces of legislation is a fundamental change in the formula for calculating premium subsidies. Under these bills, the subsidies would become more generous, allowing more Americans to purchase coverage with minimal or zero premiums, and capping premiums at no more than 8.5 percent of income, regardless of a household’s income. At ACA Signups, Charles Gaba has created graphics that will help you visualize after-subsidy premiums as a percentage of income under the status quo versus H.R. 369, as well as a previous piece of federal legislation and California’s state-based subsidy system.
Maryland legislation would create young-adult subsidy pilot program
A bill (H.B. 780) introduced last week in Maryland calls for the state to create a pilot program that would provide state-funded premium subsidies to young adults with fairly low incomes. The legislation calls for the state to use $10,000,000 per year in 2022 and 2023 to provide additional premium assistance to people between the ages of 18 and 41, with incomes between 133 percent and 140 percent of the poverty level.
The ACA already provides federal premium subsidies for people at this income level, but the subsidies aren’t as strong for young people as they are for older enrollees. The pilot program would be designed to make net premiums more affordable and boost enrollment for this demographic.
Minnesota legislation calls for transition to HealthCare.gov
Minnesota H.F. 536 – introduced on Monday – calls for the state to transition away from MNsure as of 2022 and start utilizing HealthCare.gov instead. The measure is not likely to pass in the Minnesota House, given the Democratic majority in that chamber and the lawmakers’ general support for MNsure.
In 2017, former Gov. Mark Dayton vetoed a bill that would have transitioned the state to HealthCare.gov, and MNsure has continued to be a successful state-run exchange ever since.
Over the first few years the exchanges were in operation, several states shifted from their own enrollment platforms to HealthCare.gov (although Idaho took the opposite approach, switching from HealthCare.gov to their own platform as of the 2015 plan year). But the opposite trend has been ongoing for the last couple of years, with Nevada, Pennsylvania, and New Jersey all switching away from HealthCare.gov and operating their own exchange platforms, and other states planning to follow suit over the next few years. (You can see a full timeline of all the changes here.)
Minnesota bill would require more robust coverage of outpatient mental health treatment
Minnesota H.F. 415 and S.F. 377 – both introduced last week – would require major medical plans regulated by the state of Minnesota (ie, individual and fully-insured group plans, but not self-insured group plans) to cover a member’s first four outpatient mental health visits each year with cost-sharing that doesn’t exceed $25 per visit.
There’s no mention of an exclusion for HSA-qualified high-deductible health plans (HDHP), but that would need to be added to the legislation in order to allow HSA-compliant plans to continue to be available in Minnesota. IRS rules do not allow HDHPs to pay for services like mental health care until the member has met their deductible.
Washington legislation would create state-based premium subsidies
Washington state’s Cascade Care program, including standardized plans and public option plans, is underway this year. But part of the original 2019 Cascade Care legislation called for the state to develop a plan to provide state-based premium subsidies to people earning up to 500 percent of the poverty level.
Legislation to get the ball rolling on that did not advance in last year’s session, but a new bill was introduced last week with a similar intent. S.B. 5377 calls for the state to provide premium subsidies to people with income up to 500 percent of the poverty level (and possibly a cost-sharing assistance program), as long as they’re enrolled in the lowest-cost Bronze, Silver, or Gold standardized plan available in their area. Washington’s exchange conducted a detailed analysis of various approaches to state-based premium subsidy programs last year; their report includes a recommendation that the state-funded premium subsidies be provided as a fixed-dollar amount.
S.B. 5377 also addresses some aspects of the state’s existing public option program, including participation requirements for hospitals and surgical facilities, as well as a reduction in the reimbursement rate for hospitals (currently set at 160 percent of Medicare rates, but it would decline to 135 percent of Medicare rates under S.B. 5377, leading to lower premiums for enrollees).
Mississippi and Kentucky consider extending postpartum Medicaid coverage
Mississippi lawmakers are considering S.B. 2799, which would make a variety of changes to the state’s Medicaid program, including an extension of postpartum Medicaid coverage. Under current rules, a woman in Mississippi who qualifies for Medicaid due to pregnancy is eligible for 60 days of postpartum Medicaid coverage after the baby is born, but S.B. 2799 would extend that to 12 months (during the COVID pandemic, postpartum Medicaid coverage does not terminate after 60 days, due to the current rules that prevent states from terminating Medicaid coverage for any enrollees unless they move out of the state or request a coverage termination). Medicaid covers nearly two-thirds of all births in Mississippi — the highest proportion in the nation.
The Kentucky House Democratic Women’s Caucus has created a plan they’re calling the Kentucky Maternal and Infant Health Project, comprised of 21 proposed bills that would address a wide range of issues. Among them is a measure that would extend postpartum Medicaid coverage from 60 days to 12 months. The proposal also calls for pregnancy to be considered a qualifying event, which is currently only the case in New York, Connecticut, and DC.
Montana legislative committee advances bill to prohibit abortion coverage for on-exchange plans
Last week we told you about legislation in Arizona, Texas, and Virginia that would remove state rules that prohibit abortion coverage on health plans that are sold in the exchange/marketplace in those states. Montana lawmakers are considering the opposite approach, however, with H.B. 229. The bill, which was approved by the House Judiciary Committee last week, would prohibit abortion coverage on plans sold in the Montana exchange. The only exception would be in cases where the mother’s life is in danger.
Montana is currently one of a minority of states where there is no ban on abortion coverage for on-exchange plans, and at least one insurer does offer plans that include abortion coverage.
More states consider bills that would cap out-of-pocket costs for insulin
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
Today, President Biden signed two highly anticipated executive orders related to healthcare. The first is aimed at strengthening Medicaid and the Affordable Care Act, and directs HHS to consider creating a COVID-related special enrollment period (SEP) on HealthCare.gov. The Biden administration has also committed $50 million to outreach and education, in order to make people aware of the enrollment opportunity and the extensive financial assistance that’s available to help offset the cost of coverage and care.
State officials, insurers, and consumer advocates had repeatedly asked the Trump administration for a COVID-related special enrollment period in 2020, but to no avail. (Almost all of the state-run exchanges did open COVID-related SEPs in 2020.)
When will the HealthCare.gov special enrollment period start?
Who can use the COVID special enrollment period on HealthCare.gov?
Anyone who is eligible to use the marketplace can enroll during this special enrollment period. This includes people who are uninsured, under-insured, or already enrolled in a plan through the marketplace and wanting to switch to a different plan.
Previously, it was expected that this new special enrollment window would be aimed at Americans who are uninsured, much like the COVID-related special enrollment periods that had already been announced in the District of Columbia, Maryland, Massachusetts, and New York (the SEP in Massachusetts also applies to people who have COBRA and would prefer to drop it and switch to a plan offered through the marketplace). But when CMS published the details of the SEP, it was clear that they wanted to cast a wide net, making the special enrollment period available for those who are without coverage, but also for current marketplace enrollees.
They’ve clarified that “current enrollees will be able to change to any available plan in their area without restriction to the same level of coverage as their current plan.” They also note that “consumers won’t need to provide any documentation of a qualifying event (e.g., loss of a job or birth of a child), which is typically required for SEP eligibility.”
Are state-run marketplaces also offering a special enrollment period for uninsured residents?
HealthCare.gov is used in 36 states, and the COVID SEP applies in all of them. But all of the state-run exchanges have followed suit (in addition to DC, Massachusetts, Maryland, and New York, which had already announced COVID-related special enrollment periods). Here’s a summary of the COVID-related special enrollment periods in states that run their own exchanges (note that this list has been updated over time, as more state-run exchanges announce special enrollment periods):
Some of these enrollment windows apply only to uninsured residents, while others apply to anyone eligible to use the marketplace, including people who already have coverage and want to switch to a new plan.
Last month, insurance commissioners from 11 states sent a letter to President Biden, encouraging him to take various actions to improve access to health coverage and care. Opening a special enrollment period was among their recommendations, along with “restoring outreach funding, restoring flexibility on eligibility rules like failure to reconcile, and immediately revoking public charge rules.”
The insurance commissioners who wrote the letter – some whom represent states that run their own exchanges – further noted that
“many of our states run our own state-based marketplaces and we would like to work with you to ensure that any effort to encourage marketplace enrollment is truly national and therefore inclusive of state-based marketplaces, in addition to HealthCare.gov. We ask you, as soon as possible, to coordinate with state-based marketplaces on the timing of any SEP, the messaging you intend to use, and key strategies you will employ to reach the uninsured so that we can align our plans with yours.”
And the CMS press release notes that the administration “strongly encourages states operating their own Marketplace platforms to make a similar enrollment opportunity available to consumers in their states.” As of early February, only three state-run exchanges had not announced COVID-related special enrollment periods (edit: all three had announced COVID-related enrollment periods by mid-February; there are COVID-related enrollment periods nationwide, although the rules and deadlines vary a bit in some states).
How can I get coverage after the COVID-related enrollment period ends?
If you’re uninsured and don’t enroll during the COVID-related enrollment period in your state, your options for getting coverage for the remainder of 2021 will be limited.
But you likely do still have at least some options, as outlined here. If you’re eligible for Medicaid or CHIP, enrollment continues year-round, with coverage that can take effect immediately or even retroactively. Otherwise, you may have to consider a plan that’s not regulated by the Affordable Care Act, such as a short-term plan or health care sharing ministry, to tide you over until you can enroll in a plan through the marketplace.
What else will the executive orders do?
The special enrollment period for uninsured Americans is generating headlines and will be available in just a couple of weeks. But the executive order is expected to direct federal agencies to consider a variety of other reforms, which could have far more significant impact.
rolling back the relaxed guardrails for 1332 waivers that the Trump administration championed,
changing the way affordability of employer-sponsored plans is calculated (in order to fix the family glitch), and
possible solutions that would eliminate the subsidy cliff and make coverage more affordable for people with income a little above 400 percent of the poverty level.
The second executive order is aimed at protecting women’s health in America and around the world, including ensuring access to all necessary reproductive health care. It rescinded the global gag rule (Mexico City Policy), which blocked U.S. funding for international non-profits that provide women with abortion counseling or referrals. The rule was first implemented in the 80s and has been rescinded and reinstated several times under different administrations.
The women’s health executive order also directs federal agencies to reconsider the Trump administration rule that eliminated federal funding for Planned Parenthood and other abortion providers.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
https://www.maddoxinsured.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsured.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-01-28 13:54:242021-03-24 15:00:04Biden administration announces COVID-related special enrollment period
This morning, the White House announced that today, President Biden will sign two highly anticipated executive orders related to healthcare. The first is aimed at strengthening Medicaid and the Affordable Care Act, and will include a provision to create a COVID-related special enrollment period (SEP) on HealthCare.gov, for Americans who don’t currently have health coverage. State officials, insurers, and consumer advocates repeatedly asked the Trump administration for a COVID-related special enrollment period in 2020, but to no avail. (Almost all of the state-run exchanges did open COVID-related SEPs in 2020.)
When will the HealthCare.gov special enrollment period start?
The special enrollment period will run from February 15 to May 15, giving uninsured Americans three months in which to pick a health plan, even if they don’t otherwise have a qualifying event.
Who can use the COVID special enrollment period on HealthCare.gov?
This window is expected to be aimed at Americans who are uninsured, much like the COVID-related special enrollment periods that had already been announced in Maryland, Massachusetts, and New York. But the COVID-related SEP in Massachusetts also applies to people who have COBRA and would prefer to drop it and switch to a plan offered through the marketplace – it’s possible that the SEP on HealthCare.gov could be extended to populations like that as well.
Will state-run marketplaces also offer a special enrollment period for uninsured residents?
HealthCare.gov is used in 36 states, and the COVID SEP will apply in all of them. But it’s also likely that many of the state-run exchanges – in addition to Massachusetts, Maryland, and New York – could follow suit. Colorado’s exchange announced today that they’ll open a special enrollment period for uninsured residents, which will run from February 8 through May 15, and Washington’s exchange announced a special enrollment period, with the same dates that HealthCare.gov will use, for “anyone seeking health insurance coverage.”
Last month, insurance commissioners from 11 states sent a letter to President Biden, encouraging him to take various actions to improve access to health coverage and care. Opening a special enrollment period was among their recommendations, along with “restoring outreach funding, restoring flexibility on eligibility rules like failure to reconcile, and immediately revoking public charge rules.”
The insurance commissioners who wrote the letter – six of whom represent states that run their own exchanges (California, Colorado, Minnesota, Pennsylvania, Rhode Island, and Washington) – further noted that
“many of our states run our own state-based marketplaces and we would like to work with you to ensure that any effort to encourage marketplace enrollment is truly national and therefore inclusive of state-based marketplaces, in addition to HealthCare.gov. We ask you, as soon as possible, to coordinate with state-based marketplaces on the timing of any SEP, the messaging you intend to use, and key strategies you will employ to reach the uninsured so that we can align our plans with yours.”
So it’s quite likely that many of the remaining state-based marketplaces will open COVID-related SEPs this spring, allowing uninsured residents another opportunity to sign up for health coverage.
How can I get coverage between now and February 15?
If you’re uninsured and not in one of the states where open enrollment for 2021 plans is ongoing until the end of January, your options for getting coverage before the new special enrollment period will be limited.
But you likely do still have at least some options, as outlined here. If you’re eligible for Medicaid or CHIP, enrollment continues year-round, with coverage that can take effect immediately or even retroactively. Otherwise, you may have to consider a plan that’s not regulated by the Affordable Care Act, such as a short-term plan or health care sharing ministry, to tide you over until you can enroll in a plan through the marketplace.
What else will the executive orders do?
The special enrollment period for uninsured Americans is generating headlines and will be available in just a couple of weeks. But the executive order is expected to direct federal agencies to consider a variety of other reforms, which could have far more significant impact.
changing the way affordability of employer-sponsored plans is calculated (in order to fix the family glitch), and
possible solutions that would eliminate the subsidy cliff and make coverage more affordable for people with income a little above 400 percent of the poverty level.
The second executive order will be aimed at protecting women’s health in America and around the world, including ensuring access to all necessary reproductive health care. It’s expected to rescind the global gag rule (Mexico City Policy), which blocks U.S. funding for international non-profits that provide women with abortion counseling or referrals. The rule was first implemented in the 80s and has been rescinded and reinstated several times under different administrations.
It’s also expected that the women’s health executive order will direct federal agencies to reconsider the Trump administration rule that eliminated federal funding for Planned Parenthood and other abortion providers.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
https://www.maddoxinsured.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsured.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-01-28 13:54:242021-01-28 14:01:14Biden administration announces three-month special enrollment period
Open enrollment ends Sunday in California, New York, New Jersey, and Washington, DC
Open enrollment for 2021 individual/family health plans ended weeks ago in most of the country, but it’s still ongoing in California, New Jersey, New York, and the District of Columbia. In all four areas, however, open enrollment ends this Sunday, January 31. After that, people in those areas will need a qualifying event in order to enroll, although New York’s COVID-related special enrollment period (details below) will still allow people who don’t have health insurance at all to enroll in coverage for another two months.
Maryland, Massachusetts, New York announce COVID-related SEPs for uninsured residents
Although open enrollment has already ended in Maryland and Massachusetts, and will end in New York on Sunday, all three states have announced COVID-related special enrollment periods for uninsured residents, with the following deadlines:
Massachusetts: March 23, 2021 (This also applies to people who have COBRA and would prefer to switch to an individual/family plan instead of exhausting their COBRA coverage.)
It’s widely anticipated that the Biden administration will open a COVID-related special enrollment period via HealthCare.gov, with an executive order that’s expected to be signed tomorrow. Other state-run exchanges might then follow suit. In a recent letter to President Biden, several of them indicated they would like to coordinate with the federal government on this so as to create a unified national approach to reaching the remaining uninsured population. As Dave Anderson notes, an enrollment period at this time of the year might be easier for uninsured people to manage than the regular annual open enrollment period in the fall.
Legislation introduced in Arizona and Texas would remove ban on abortion coverage for qualified health plans; similar bill passed in Virginia
State legislators introduced SB1346 in Arizona’s Senate this week, calling for the removal of the state’s existing ban on abortion coverage for qualified health plans. Similar bills were introduced in Texas (SB448 and HB1362), and the Texas bills would also ensure that the state Medicaid program covers abortion services.
Last week, the Virginia Senate passed a similar bill by a vote of 20-17. Its companion bill, HB1896, passed in the House of Delegates this week, and the measure has now been sent to Gov. Ralph Northam for his consideration.
Hawaii does not prohibit qualified health plans from including abortion coverage, but new legislation introduced in Hawaii’s Senate would codify a requirement that individual and group insurers cover a variety of preventive and reproductive health benefits. The list of services that would have to be covered under the legislation includes many that are already required under the ACA (just in case the ACA is overturned by the Supreme Court), but also includes abortion services.
Connecticut lawmakers introduce single-payer bill amid push for public option, reinstatement of health insurance tax
Democratic lawmakers in Connecticut’s House of Representatives have introduced legislation that would create a single-payer health coverage system in the state. It would include coverage for medical and prescription services as well as things like dental, vision, and long-term care, would be funded via taxes as opposed to premiums (plus pass-through funding from a 1332 waiver), and would have no cost-sharing (deductibles, copays, coinsurance).
That bill is a long shot; similar efforts in Vermont and Colorado failed over the last several years. But Connecticut is a state to watch this year in terms of health care reform legislation. Lawmakers have been pushing for a public option and are considering reinstating the health insurance tax that used to be assessed by the federal government, with the proceeds used to make health coverage more affordable. New Jersey used that approach and has used the revenue to create state-funded premium subsidies that are making coverage more affordable as of 2021.
Legislation introduced in Hawaii would continue progress toward single-payer system
More than a decade ago, Hawaii created the Hawaii Health Authority (HHA), tasked with developing a universal health coverage system for everyone on the Hawaiian Islands. But the HHA stalled when the Affordable Care Act came on the scene. With the COVID pandemic highlighting the cracks in the state’s current health coverage system (which is robust but highly linked to employment), advocates began pushing to revitalize the HHA and its mission.
Last week, Hawaii Representative Scott Saiki (D, District 26, and House Speaker) introduced legislation (HB192 and HB164) that would authorize and fund the HHA “to continue planning for the adoption of a universal, publicly-administered, healthcare-for-all insurance model with a single payout agency.”
Virginia lawmakers introduce legislation to create reinsurance program
Legislation was introduced last week in Virginia’s House of Delegates that calls for the state to create a reinsurance program and seek federal pass-through funding via a 1332 waiver. Fourteen states already have reinsurance programs – which tend to have fairly broad bipartisan support – and they are highly effective in terms of bringing down full-price premiums, making it easier for people who don’t get premium tax credits to afford individual health insurance. But lawmakers in some states have pushed back against reinsurance programs over the last few years, due to disagreements over how the state’s portion of the funding should be raised.
Legislation introduced in New York would require marketplace plans to cover acupuncture
Acupuncture is not currently a state-mandated benefit in New York, nor is it covered under the state’s benchmark plan, upon which individual and small group plans must be based (some health plans in New York’s marketplace do voluntarily provide acupuncture benefits). A bill was introduced last week in New York’s Assembly that would require health insurance plans sold in the New York marketplace/exchange to cover acupuncture. If enacted, it would apply to any health plans issued or renewed on or after 90 days from the date of enactment.
New Mexico lawmakers again consider Health Care Affordability Fund
Last year, New Mexico’s House passed legislation that would have created a state fee to replace the federal health insurance tax. The proceeds would have been directed to a new Health Care Affordability Fund, which would have been used to provide additional health insurance subsidies to New Mexico residents. The 2020 legislation did not advance in the Senate, so the measure died in last year’s legislative session.
But Gov. Michelle Lujan Grisham announced earlier this month that the Health Care Affordability Fund would be a legislative priority in 2021, and the legislation to get the ball rolling on this was introduced in New Mexico’s House of Representatives last week.
Florida, Mississippi, South Dakota voters may see Medicaid expansion ballot initiatives in 2022
Of the dozen states that have still refused to expand Medicaid, only Florida, Mississippi, and South Dakota have constitutions that will allow Medicaid expansion via a ballot initiative. And advocates in all three states are working to get Medicaid expansion measures on the 2022 ballots.
Signatures were previously gathered for a ballot measure in Florida, but that effort was derailed in 2019. Advocates are hoping to revive the same ballot measure and continue collecting signatures this year. South Dakota’s ballot initiative and constitutional amendment were approved for circulation last fall, and signatures must be turned in by early November 2021. Advocates in Mississippi do not yet have their ballot initiative language finalized, but are hoping to begin gathering signatures this spring. Twobills have also been introduced in Mississippi to expand Medicaid legislatively, but they’re a long shot given the general opposition in the GOP-led legislature.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
President Biden’s American Recovery Plan calls for additional premium subsidies and COBRA subsidies
Newly inaugurated President Joe Biden outlined his American Recovery Plan last week, and it includes some important provisions aimed at improving access to health coverage. The wide-ranging $1.9 trillion proposal, which would have to be approved by Congress, calls for premium tax credits to be increased “to lower or eliminate health insurance premiums” and to cap any enrollee’s after-subsidy premium at no more than 8.5 percent of their income. This second provision would primarily help people with income near or a little above 400 percent of the poverty level, and could make a substantial difference in the affordability of coverage for some households that currently have to pay full-price for their coverage — sometimes amounting to well over a quarter of their income.
Biden’s American Recovery Plan encompasses far more than just health coverage. But if you’re curious about how health care reform might proceed under the new administration and the new Congress, check out this two-partseries from Andrew Sprung, this piece from Charles Gaba, and this piece from Katie Keith.
Open enrollment ends Saturday in Massachusetts and Rhode Island
As of this week, confirmed marketplace enrollment totals for 2021 coverage have surpassed 11.6 million nationwide.
Partial 2022 health insurance rules finalized by outgoing Trump administration
Last fall, the Trump administration published the proposed Notice of Benefit and Payment Parameters for 2022. This annual rulemaking document is wide-ranging and typically addresses a variety of issues related to the health insurance exchanges, special enrollment periods, risk adjustment, etc. At the time, we summarized several of the proposed rule changes that were most likely to directly affect people with individual market health plans.
Last week, the Trump administration announced that it was finalizing some aspects of the proposal — including the most controversial ones — but that the rest of the proposed rule changes would be finalized in an additional rule that will be issued “at a later date.” That will be under the Biden administration, which is also likely to delay the rule the Trump administration finalized last week (currently slated to take effect March 15) and reissue a new proposed rule, with a new comment period.
A total of 542 comments were submitted to CMS regarding the proposed rule changes for 2022. The comments that pertain to the rule changes that CMS finalized last week are summarized in the final rule, along with the responses from CMS. Notably:
Although CMS noted that “nearly all commenters on this rulemaking cautioned about potential harmful impacts to consumers” of allowing states to abandon their exchanges and rely entirely on brokers, agents, and insurers for health plan enrollment, the proposed rule change that would allow this was finalized. There would still be a role for an official exchange website in states that choose this option, but it would be minimal. And there are ongoing concerns that a switch to relying on brokers, agents, and insurers, instead of exchanges, will make it harder for Medicaid-eligible enrollees to understand the assistance and coverage that’s available to them.
The Trump administration’s 2018 guidance on 1332 waivers, which sharply relaxed the “guardrails” that apply to these waivers, is being officially incorporated into federal regulations.
The fee that insurers pay HealthCare.gov (and pass on to consumers via premiums) will be reduced in 2022. In states that rely fully on HealthCare.gov, it will be 2.25 percent of premiums; in states that run their own exchanges but use HealthCare.gov for enrollment, it will be 1.75 percent of premiums (down from a current 3 percent and 2.5 percent, respectively).
Many of the proposed rule changes are still under consideration and were not finalized last week, including the premium adjustment percentage (which would affect maximum out-of-pocket amounts and the affordability threshold for catastrophic plan eligibility), special enrollment periods when employer COBRA subsidies cease or a person loses eligibility for premium subsidies, and a rule change that would permanently allow insurers to issue MLR rebates earlier in the year.
Last week, Planned Parenthood Southeast and Feminist Women’s Health Center filed a lawsuit against HHS, CMS, the Department of the Treasury, and their respective leaders, alleging that the waiver was unlawfully approved and should be vacated. Democracy Forward, which is representing the plaintiffs in the case, explained that Georgia’s 1332 waiver “will do immense damage to Georgia’s health insurance market, force Georgians to shop for insurance through private brokers and insurance companies, lead more residents to enroll in junk plans, and increase premiums.”
Bills introduced in Virginia to eliminate state ban on abortion coverage under marketplace plans; study impact of mandating coverage for infertility
Virginia is one of 26 states where health insurance plans sold in the marketplace/exchange are not allowed to provide coverage for abortions. (Virginia’s ban includes exceptions for abortion coverage in cases of rape, incest, or the mother’s life being in danger.) Legislation was introduced last week in Virginia’s Senate that would eliminate this ban, allowing insurers to offer abortion coverage if they choose to do so.
Legislation has also been introduced in Virginia that would direct the Virginia Health Insurance Reform Commission to conduct a study on the impacts of requiring health insurance plans in the state to cover infertility treatment. There are currently 19 states that mandate at least some coverage for infertility treatment.
Legislation introduced in Maryland and Rhode Island to create universal healthcare commissions
Legislation was introduced in Maryland last week that calls for the state to create a Commission on Universal Health Care. The Commission would be tasked with developing a plan for the state to establish a single-payer universal coverage system by 2024.
Legislation was also introduced in Rhode Island last week that calls for the creation of a special legislative commission that would study how the state might go about implementing a single-payer Medicare-for-All type of health coverage program in Rhode Island.
Legislation introduced in Missouri to create a Medicaid work requirement
Missouri has not yet expanded Medicaid eligibility under the ACA, but that will change this summer, thanks to a ballot initiative that voters in the state passed last year. Legislation was introduced this month in Missouri’s Senate that calls for a Medicaid work requirement in the state, effective as of January 2022. Under the terms of the bill, non-exempt Medicaid enrollees would have to work (or participate in various other community engagement activities, including volunteering, school, job training, etc.) at least 80 hours per week in order to maintain eligibility for Medicaid.
The Trump administration approved numerous work requirement waivers over the last few years, but due to lawsuits and the COVID pandemic, none are currently in effect. And the Biden administration is very unlikely to approve any additional waivers, meaning that Missouri’s legislation is likely a non-starter for the time being, even if it’s enacted.
Uncompensated care funding in Florida and Texas extended through 2030
Last Friday, the Trump administration renewed 1115 waivers in Texas and Florida, both of which are now valid through mid-2030. These waivers are for Medicaid managed care, and also provide federal funding for uncompensated care – which is more of a problem in states like Texas and Florida, due to their failure to expand Medicaid and the resulting coverage gap for low-income residents.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
Open enrollment for 2021 health insurance plans in Colorado ran from November 1, 2020 through January 15, 2021 (enrollment in 2022 plans will run from November 1, 2021, through January 15, 2022).
Nearly 167,000 Colorado residents enrolled in 2020 coverage through the Colorado health insurance marketplace. More than 14,000 others enrolled during Colorado’s COVID-19 SEP. Enrollment in plans for 2021 stood at 172,000 with nine days remaining in open enrollment.
Colorado’s high-risk pool closed in 2014, once individual market plans became guaranteed issue.
This page is dedicated to helping consumers quickly find health insurance resources in the state of Colorado. Here, you’ll find information about the various types of health insurance coverage available in the state. You can find the basics of the Colorado health insurance marketplace/exchange (Connect for Health Colorado) and how open enrollment and special enrollment periods work for plans sold in the exchange; a brief overview of Medicaid expansion in Colorado; an explanation for why short-term health insurance is not available in the state; details about state-specific Medicare rules; as well as a collection of Colorado health insurance resources for residents.
Colorado has long been a leader in health reform
Colorado has long been a leader in terms of healthcare reform. Before the ACA implemented reform on a federal level, Colorado had already made maternity coverage mandatory in the individual market, and had banned gender-based premiums.
Colorado became the second state in the nation to actively pursue single-payer healthcare, with Amendment 69 appearing on the 2016 ballot. However, voters rejected the push for single-payer by a wide margin (Vermont was the first state to implement a plan to achieve single-payer, but they abandoned that path in December 2014).
Colorado implemented a reinsurance program as of 2020, joining a growing number of states that are using 1332 waivers to obtain federal pass-through funding for reinsurance to reduce unsubsidized health insurance premiums and stabilize the state individual market. Individual health insurance premiums in Colorado dropped by an average of 20 percent in 2020, thanks to the reinsurance program (although after-subsidy premiums increased for many people who receive premium subsidies). And overall average rates decreased again in 2021, by 1.4 percent.
Colorado regulators and lawmakers were working on a public option program that the state hoped to debut in the fall of 2021, for coverage effective in 2022, but the legislation to create it was abandoned amid the COVID-19 pandemic. Lawmakers plan to introduce a different version of it during the 2021 session.
Colorado’s uninsured rate dropped by nearly half from 14.1 percent in 2013, to 7.5 percent in 2018, although it grew to 8 percent in 2019. The Colorado Health Access Survey found an even lower uninsured rate — just 6.5 percent — which has stayed steady from 2017 through 2019.
Colorado’s health insurance marketplace
Colorado utilizes a state-run health insurance exchange — Connect for Health Colorado — which is one of just three exchanges in the nation with a permanently extended open enrollment period (November 1 to January 15).
The marketplace is used by individuals and families who need to purchase their own health coverage, as well as people who are eligible for income-based Medicaid or CHIP. People buy their own health insurance in a variety of situations, including being an early retiree, being self-employed, or being employed by a small business that doesn’t offer health benefits.
Colorado’s marketplace no longer offers small business health plans, but Kaiser still has exchange-certified small business plans for sale, which employers can purchase directly from Kaiser or with the help of a broker or agent.
Eight insurers participate in the Colorado health insurance marketplace as of 2021, and for 2021, three of the state’s insurance companies (Oscar, Cigna, and Rocky Mountain Health Plans) expanded their coverage areas. Insurer participation in Colorado is relatively robust compared with much of the country, but coverage tends to be localized and plan availability is concentrated in urban areas. In 10 of the state’s 64 counties, those who shop the state’s exchange have a single carrier option (Anthem Blue Cross/Blue Shield) in 2021 (but that’s down from 22 counties in 2020).
Average premiums in Colorado’s individual market dropped by 20 percent for 2020, but that was before any subsidies were applied. After subsidies, many enrollees saw higher monthly premium costs in 2020, due to lower benchmark plan premiums and the resulting decrease in premium subsidy amounts. For 2021, the eight insurers initially proposed an overall average rate increase of just over 2 percent, but once regulators finalized the rates, the changes for 2021 amounted to an average rate decrease of 1.4 percent.
Colorado implemented rules to permanently extend its annual open enrollment period to 2.5 months (November 1 to January 15).
Open enrollment for 2021 medical insurance in Colorado ran from November 1, 2020 through January 15, 2020. This window was an opportunity for new enrollees to select coverage in the individual market (on-exchange or outside the exchange), and for existing enrollees to compare the available options for 2021 and renew or change their existing coverage. Enrollees should also provide updated financial information to the exchange during open enrollment, in order to have financial assistance eligibility based on accurate information for the coming year.
When there were still nine days remaining in open enrollment for 2021 coverage, Connect for Health Colorado announced that more than 172,000 people had enrolled in coverage. This was already a record high, and sign-ups continued to increase over the remaining days of the enrollment window. Enrollment the year before, for 2020 coverage, had reached nearly 167,000 people, although that was down from just over 170,000 enrollees in 2019.
Colorado required all grandmothered (transitional) health insurance plans to terminate by the end of 2015. There are still grandfathered health insurance plans in Colorado, but all other individual and small-group plans are now ACA-compliant.
Medicaid expansion in Colorado
Colorado is among the 36 states and the District of Columbia that have expanded Medicaid eligibility under the Affordable Care Act. The ACA Medicaid expansion extends eligibility to most non-elderly adults at or below 138 percent of the federal poverty level.
As of mid-2020, total enrollment in Medicaid plans and CHIP plans in Colorado stood at nearly 1.4 million people, which was 77 percent higher than it had been in 2013.
Learn about Colorado’s Medicaid and Child Health Plan Plus (CHP+) programs at the Colorado Department of Health Care Policy & Financing website, and learn about Colorado’s Medicaid expansion in our overview.
Colorado legislators’ positions on the Affordable Care Act
In 2009, Colorado Sens. Mark Udall and Michael Bennet – both Democrats – voted yes on the Affordable Care Act. Colorado’s five Democratic House members also voted yes, while the other two representatives, both Republicans, voted no.
The current Colorado congressional delegation includes two Democratic Senators: Michael Bennett and John Hickenlooper, both of whom support the ACA. As of 2021, Colorado has seven representatives in the U.S. House: four Democrats, and three Republicans. Support for the ACA is split along party lines in the state’s House delegation.
At the state level, Colorado was one of the only states that moved in a bipartisan manner to establish a state-run health insurance marketplace. When John Hickenlooper was governor, he signed legislation authorizing the marketplace in 2011. The state marketplace is called Connect for Health Colorado. The state also adopted Medicaid expansion under the Affordable Care Act.
Colorado’s high-risk insurance pool
Before the ACA reformed the individual health insurance market, coverage was underwritten in nearly every state, including Colorado. People with pre-existing conditions were often unable to purchase coverage in the private market, or were only eligible for policies that excluded their pre-existing conditions or charged them premiums that were significantly higher than the base rate.
CoverColorado was created in 1991 to provide an alternative for people who were not able to get comprehensive coverage in the private market because of their medical history.
One of the primary reforms ushered in by the ACA was guaranteed issue coverage in the individual market. An applicant’s medical history is no longer a factor in eligibility, which means that high-risk pools are no longer necessary the way they once were. CoverColorado stopped enrolling new applicants at the end of 2013, and the program ceased altogether in March 2014.
Medicare coverage and enrollment in Colorado
By November 2020, there were 946,170 enrollees in Medicare in Colorado. About 56 percent of them were enrolled in Original Medicare, with the other 44 percent enrolled in Medicare Advantage plans instead.
Colorado Division of Insurance — Oversees, regulates, and licenses the health insurance companies that offer plans in the state, as well as brokers and agents.
Colorado Department of Health Care Policy and Financing — Oversees Medicaid and CHP+ in Colorado. Also played a key role in developing the framework for the state’s proposed public option plan, which is likely to be considered by lawmakers in 2021.
Connect for Health Colorado — The state-run marketplace where individuals and families can compare plan options, enroll in coverage, and receive financial assistance based on their household income. The marketplace is also used for enrollment in Medicaid and CHP+
Colorado Senior Healthcare/Medicare resources (State Health Insurance Assistance Program) — A local service that provides information and assistance to Medicare beneficiaries and their caregivers.
Legislation that would have created the public option was abandoned in 2020, however, as a result of the coronavirus pandemic.
See the bottom of this page for a summary of other recent state-level health reform legislation.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
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Can consumers buy short-term health plans in Massachusetts?
Due to the fact that health plans in Massachusetts must follow the state’s rules, including “guaranteed-issue and rating restrictions,” short-term health insurance in Massachusetts is non-existent. As a result, there are no short-term health plans available for purchase in the state.
“We therefore support the ability to regulate our own insurance market in a manner consistent with our commitment to broad, shared, and stable risk pools, and, as such, do not intend to take up the new flexibility around STLD plans offered in the proposed regulation.”
Massachusetts’s short-term health insurance regulations
Since 1996, Massachusetts has required all health plans marketed to individuals to be sold on a guaranteed-issue basis (ie, applications cannot be rejected based on medical history) “according to clearly defined rating rules.”
Massachusetts has had its own state-based individual health insurance mandate since 2006, and traditional short-term health insurance would not count as having coverage for the purpose of fulfilling the mandate. Although there is no longer a penalty from the federal government for not having minimum essential coverage, the individual mandate penalty in Massachusetts is still in force, and is collected on state tax returns.
How can I get affordable health insurance in Massachusetts?
The Massachusetts health insurance marketplace is available to residents in need of health insurance coverage, and offers a large variety of coverage options with premium subsidies and cost-sharing subsidies available based on household income (these subsidies help to offset monthly premium costs as well as out-of-pocket costs, with eligibility based on household income).
The health insurance plans sold in the marketplace are designed for people who are self-employed, employed by a small business that doesn’t offer health coverage benefits, or early retirees who aren’t yet eligible for Medicare.
Healthcare plans in the Massachusetts marketplace are available to anyone during the annual open enrollment period (which tends to be extended into January in Massachusetts, offering one of the longest enrollment periods in the United States). If it’s outside of the annual open enrollment period, you may qualify for a special enrollment period if you’ve experienced a qualifying event, such as losing healthcare coverage through an employer, moving to a new area, or getting married.
Based on your income you may also qualify for health insurance in Massachusetts under expanded Medicaid coverage. When the Affordable Care Act was enacted in 2010, Medicaid expansion was a cornerstone of lawmakers’ efforts to expand realistic access to health coverage and healthcare to as many people as possible. If you have a household income up to 133 percent of poverty (138 percent with the 5 percent income disregard), you will likely be able to enroll in Medicaid (MassHealth), and enrollment is available year-round.
Medicaid eligibility is also calculated on a monthly basis, so even if you earned more than 138 percent of the poverty level earlier in the year, or expect to do so later in the year, MassHealth can serve as temporary coverage during a time when your income is low. Once your income picks back up, you and your dependents will be eligible for a special enrollment period (triggered by loss of eligibility for Medicaid) during which you can change to private coverage offered via the Massachusetts marketplace.
And Massachusetts also has ConnectorCare plans, which are available to people with household income up to 300 percent of the poverty level. For people who are newly eligible or who have not applied for ConnectorCare coverage in the past, enrollment is available at any time.
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Average approved premiums in the individual market decreased by 20% for 2020, with the decrease based in large part on the state’s new reinsurance program.
What type of health insurance exchange does Colorado have?
Colorado has a state-run exchange, Connect for Health Colorado. The state passed legislation in 2011 to create the exchange, and is among just 15 states (including DC) that are running their own exchanges and enrollment platforms for 2021 coverage.
When is open enrollment for 2021 health insurance in Colorado?
Colorado has permanently extended open enrollment, so it runs from November 1 to January 15 every year. Open enrollment for 2021 health plans started November 1, 2020 and continued until January 15, 2021. As of January 6, enrollments had reached 172,000 — surpassing the 2020 total (which had been under 167,000) with more than a week remaining in the open enrollment period.
As a result of the coronavirus pandemic, nearly all of the state-run exchanges opened special enrollment periods to allow uninsured residents to sign up for health coverage (HealthCare.gov, which is the exchange platform that’s used in 36 states as of 2021, did not offer a COVID-specific special enrollment period). Colorado’s exchange opened a COVID-19 special enrollment period that ended April 30, 2020; more than 14,000 people enrolled in plans through the exchange during that window. That special enrollment period was for anyone who didn’t have minimum essential coverage — so it was not an opportunity for people to change their existing coverage, but it was an opportunity for people with plans that aren’t considered minimum essential coverage (such as health care sharing ministry plans) to switch to a real insurance policy.
Now that the open enrollment period for 2021 coverage has ended, normal special enrollment period rules apply in Colorado’s exchange. So people with qualifying events continue to have an opportunity to sign up for coverage. Loss of other coverage is always the most commonly-used qualifying event, and that’s especially true in light of the widespread job losses triggered by the pandemic.
How much does individual health insurance cost in Colorado?
In 2020, the average full-price (pre-subsidy) premium for plans purchased through Connect for Health Colorado was about $482/month — significantly lower than the national average of $576/month. But about three-quarters of Colorado’s exchange enrollees received premium subsidies that averaged about $374/month in 2020.
2020 was the first year that average premiums for ACA-compliant health plans decreased in Colorado, with an average rate decrease of more than 20 percent for 2020 individual market plans. But as described below, that applied to people who pay full price for their coverage. Many people who get premium subsidies saw increases in their after-subsidy premiums.
And for 2021, average premiums decreased again in Colorado’s individual market. Although the state’s insurers proposed an overall average rate increase of 2.2 percent for 2021, the Colorado Division of Insurance approved an overall average rate decrease of 1.4 percent. But that’s just an average; the actual rate changes that people experienced vary considerably depending on where they live, which insurer they use, and — if they receive a premium subsidy — how much the benchmark premium in their area changes.
Bucking the national trend, bronze plans became the most popular option in Colorado as of 2016, with 45 percent of enrollees picking bronze during open enrollment. Nationally, silver plans are twice as popular as bronze plans across all of the state-run exchanges, and more than three times as popular as bronze plans in states that use Healthcare.gov. Bronze plans were also more popular in Colorado than in other states in 2014 and 2015, but 2016 was the first year that bronze plan selections outnumbered silver in Colorado. That continued to be the case in 2017, 2018, 2019, and 2020.
Colorado has a lower-than-average percentage of enrollees who qualify for premium subsidies (although the number of people who qualify for subsidies increased when premiums grew sharply in 2017 and 2018), so there are a significant number of enrollees who pay full-price for their coverage. Bronze plans are the lowest-cost option, so they tend to appeal to people who have to pay full price. In 2020, two-thirds of unsubsidized buyers in Colorado selected bronze plans.
2021 rates and plans: Average rate decrease of 1.4%, plus coverage area expansions for some insurers
Colorado’s individual market insurers initially proposed an overall average rate increase of 2.2 percent for 2021, with some insurers proposing increases and others proposing decreases. But after some filings were revised and the rate review process was complete, the Colorado Division of Insurance announced that overall average rates would decrease by 1.4 percent for 2021, with average premiums declining for every insurer except Cigna and Anthem (and the approved increases for those two insurers are much less significant than the insurers had initially proposed).
In the small group market, insurers proposed an overall average rate increase of 5.7 percent, and the Division of Insurance approved an overall average increase of 3.8 percent.
For the eight individual market insurers, all of which sell plans through Connect for Health Colorado, the following average rate changes were approved for 2021 (listed in order of carrier market share, from largest to smallest):
Anthem (HMO Colorado): Average increase of 0.3%. Anthem has 70,787 members. [Note that Anthem also has a PPO under the name Rocky Mountain Hospital and Medical Services, but they only offer an off-exchange catastrophic plan and have just 296 members; the average approved rate change for the off-exchange catastrophic PPO is a 7.3 percent decrease, but this affects very few people.]
Kaiser: Average decrease of 1.5%. (approved as filed) Kaiser has 60,523 members. Filing notes that Kaiser is not including a COVID-19 adjustment in its rates for 2o21.
Bright: Average decrease of 5.5%. Bright has 41,132 members.
Cigna: Average increase of 3%. Cigna has 29,491 members. They are expanding into four new counties for 2021 (El Paso, Larimer, Teller, and Weld).
Friday Health Plans: Average decrease of 5.1% (filing was for an even more substantial decrease of 12.2%). Friday has 10,250 members.
Rocky Mountain Health Plans: Average decrease of 10%. RMHP has 2,417 members in two counties in 2020. But they will be expanding into a dozen additional counties in 2021.
Denver Health: Average decrease of 4.6 percent. (approved as filed). Denver Health has 1,368 members.
Oscar: Average decrease of 4.2%. Oscar has 1,014 members. Oscar offers coverage in the Denver area in 2020, and will expand into the Boulder area for 2021.
Colorado’s reinsurance program, which took effect in 2020, is credited with keeping proposed premiums for 2021 an average of nearly 21 percent lower than they would otherwise have been.
Colorado “easy enrollment” program will debut in early 2022
In June 2020, Colorado lawmakers approved HB1236, which calls for the creation of an Affordable Health Care Coverage Easy Enrollment Program in the state, starting in 2022 (based on 2021 tax returns). The legislation, which was signed into law by Governor Polis in early July, is supported by the state-run exchange, Connect for Health Colorado, and is very similar to a program that Maryland implemented in 2020.
HB1236 will let Colorado residents indicate on their state tax returns that they would like Connect for Health Colorado to determine, based on the information on their tax return, whether they might be eligible for free or subsidized health coverage. If so, the exchange would be able to reach out to the person to help them enroll in coverage — Medicaid, CHP+, or a subsidized private plan in the individual market.
The legislation will create a special enrollment period for people identified by the program as eligible for free or subsidized coverage, so that they would have a chance to enroll in coverage early in the year (soon after filing their tax return) instead of having to wait for the open enrollment period in the fall. Amendments made by the Senate in June clarify that the person would have to be represented on a Colorado tax return filed by the April 15 deadline, and that the insurer will not have to further verify that the person is eligible for a special enrollment period.
A recent Colorado Health Access survey found that people with income between 139 and 400 percent of the poverty level (ie, people who are eligible for premium subsidies in the exchange) are more likely to be uninsured than people with lower or higher income. The easy enrollment program would help to identify these individuals and allow the exchange to provide them with targeted enrollment assistance outside of the normal open enrollment window.
Colorado’s new Health Insurance Affordability Enterprise law
Colorado Senate Bill 215 was signed into law on June 30, 2020. The law, which is known as the Health Insurance Affordability Enterprise, will fund the state’s existing reinsurance program for five more years (it was previously only funded through 2021), and will fund state-based subsidies to make coverage more affordable, as well as outreach and enrollment activities.
The law calls for the state to start collecting a new fee assessed on health insurance premiums for health plans subject to regulation by the Colorado Division of Insurance (ie, individual plans and fully-insured group plans, but not self-insured group plans). The fee will replace the federal Health Insurance Tax, which is being eliminated after the end of 2020. The bill will also impose a new assessment on Colorado hospitals, replacing (at a lower amount) the existing fee that funds Colorado’s reinsurance program.
The funding to make coverage more affordable will be allocated to two separate programs. The first, which will become available as of 2022, will send money directly to health insurance companies so that they can reduce premiums for people who receive premium subsidies under the ACA. This is designed to address the fact that people who get ACA premium subsidies are generally getting smaller subsidies now that the reinsurance program is in effect (details below), making their net premiums higher than they were prior to 2020.
The second program will be state-based premium subsidies, available starting in 2023, for people with income up to 300 percent of the poverty level who don’t get ACA premium subsidies (including undocumented immigrants and people caught by the family glitch).
How did the reinsurance program affect 2020 health insurance premiums in Colorado?
Colorado enacted HB1168 in 2019, paving the way for the state to create a reinsurance program for plan years 2020 and 2021 (SB215, described above, will provide an additional five years of state funding for the reinsurance program). The state’s reinsurance waiver proposal was submitted to CMS in May 2019, and received federal approval in July.
Colorado’s reinsurance program took effect in 2020, and resulted in overall average premiums (before subsidies are applied) decreasing by 20 percent. The reinsurance program is designed to reimburse insurers an average of 60 percent of the cost of claims that are between $30,000 and $400,000, although the actual reimbursement percentage varies by location. The program is structured to incentivize insurers to offer plans in areas of the state where few insurers previously offered plans, and to offset a larger portion of claims in high-cost areas of the state — ie, the mountains and rural areas — as opposed to the heavily populated I-25 corridor where health care costs are lower.
To that end, Colorado’s reinsurance proposal is innovative: It pays a larger percentage of claims in high-cost areas, with specifics that can vary from one year to the next. The goal of the program was to reduce premiums by 15-20 percent in the parts of the state where premiums were already lower, by 20-25 percent in areas where premiums were middle-of-the-road, and by 30-35 percent in areas where premiums were the highest.
For 2021, the reinsurance program will pay 40 percent of eligible claims in rating areas 1, 2, and 3 (Boulder, Colorado Springs, and Denver), It will pay 45 percent of eligible claims in rating areas 4, 6, 7, and 8 (Fort Collins, Greeley, Pueblo, and the eastern plains/south-central Colorado). And in the mountains and western part of the state, including Grand Junction, the reinsurance program will pay 80 percent of eligible claims (note that all of these percentages are a little lower than they were for 2020).
Overall, the state’s waiver proposal projected that reinsurance would result in a 16 percent average decrease in average premiums for 2020. And in July 2019, the Colorado Division of Insurance announced that insurers in the state’s individual market had proposed an average rate decrease of 18.2 percent for 2020, based on the assumption that the reinsurance proposal would be approved (the proposed average rate change would have been a 0.5 percent increase if the reinsurance program had not been approved). Once rates were finalized, the average rate decrease was even bigger, at 20.2 percent. For 2021, the Division of Insurance noted that the reinsurance program is still keeping premiums an average of 17 percent lower than they would otherwise have been.
When 1332 waivers are used to implement reinsurance, the general idea is that the reinsurance program results in lower premiums, which in turn, results in smaller premium subsidies being paid by the federal government. By using a 1332 waiver, the state gets to keep those savings (referred to as pass-through funding) instead of the federal government keeping the money that they save on premium subsidies. The state then utilizes that money, along with state funding as necessary, to cover the cost of the reinsurance program. Colorado’s waiver proposal projected that federal pass-through funding will be $170 million in 2020 (this projection was spot-on; the actual amount was $169.5 million) and $183 million in 2021.
Colorado’s individual market insurers — all of which offer plans in the exchange — implemented the following average rate decreases for 2020:
Anthem: A 24.2 percent decrease for HMO Colorado, and a 12.5 percent decrease for Rocky Mountain Hospital & Medical Service, Inc.
Bright Health: 19.5 percent decrease (Bright began offering plans in Summit County in 2020 via the Peak Health Alliance; Bright and Peak have partnered again for 2021 in all seven counties where Peak Health Alliance offers coverage).
Cigna: 23.3 percent decrease
Denver Health Medical Plan: 29 percent decrease (Denver Health’s membership is fairly low, at 1,616 enrollees; but that’s up from just 615 members in 2017)
Friday Health: 26.9 percent decrease (Friday is leaving six counties in eastern Colorado at the end of 2019, but they had no enrollees in those counties)
Kaiser: 15.4 percent decrease (Kaiser will no longer offer individual plans in the west/mountain rating regions after the end of 2019)
Rocky Mountain HMO: 33.5 percent decrease
Oscar: New to Colorado for 2020. According to Oscar’s filing (SERFF filing number OHIN-131973376), the plans will only be available in the Denver metro area (specifically, in six of the 10 counties in rating area 3).
The final premiums for Cigna, Friday Health, and Kaiser were all a little lower (ie, a more significant rate decrease) than the insurers initially proposed.
Colorado insurers began adding the cost of CSR to silver plans rates as of 2019 (a change from 2018, when they spread the cost across the premiums for all plans), and continue to use that approach in 2020.
Why did premiums increase in 2020 for many Colorado exchange enrollees who get premium subsidies?
It’s noteworthy that although overall average premiums are dropping by 20 percent in Colorado in 2020 — the largest percentage decrease in the country — that rate decrease really only applied to people who don’t get premium subsidies (that’s about 20 percent of on-exchange enrollees, plus everyone who has ACA-compliant coverage outside the exchange, where subsidies aren’t available).
For people who do get subsidies, the subsidies decreased in line with reductions in the benchmark premium in each area. And some plans (including the benchmarks in some areas) had sharper premium decreases than others. As an example, consider a family of four (parents in their early 40s and two young children) living in Denver and earning $95,000 a year. We’ll keep them the same age in 2019 and 2020 and keep their income unchanged in order to compare apples to apples.
In 2019, they qualified for a premium subsidy of $747/month. And after that subsidy was applied, the least-expensive plan they could get was $355/month (a $6,000 deductible plan from Bright Health). If they wanted an HDHP in order to be able to contribute to an HSA, their least expensive option was $445/month after their subsidy. In total, there were 45 plans from which this family could choose.
For 2020, however, there are 58 plans, and unsubsidized premiums have dropped across the board — all of which is good news for people who don’t get premium subsidies. But this family’s subsidy shrank significantly, to only $379/month in 2020. That’s because the full-cost price of the benchmark plan is a lot lower: $1,159/month in 2020, versus $1,527/month in 2019 (those are two different plans; the benchmark in that area was offered by Kaiser in 2019, and by Cigna in 2020).
Because the benchmark plan is so much cheaper, premium subsidies for everyone in the area are smaller in 2020. For this family, the lowest-cost option for 2020, after their subsidy is applied, is $523/month. The same Bright Health plan that had a net premium of $355/month in 2019 is $529/month in 2020 — despite the fact that its full-price premium (ie, without any subsidies) dropped from $1,102/month to $909/month. If this family wants an HDHP in 2020, the cheapest one is $569/month.
So if we assume this family enrolled in the $355/month plan in 2019 and they wanted to keep it for 2020, their net premiums increased by 49 percent (from $355/month to $529/month). And shopping around wouldn’t have done them much good, because the cheapest option for 2020 (a similar plan from Bright Health) would have still resulted in a 47 percent increase in their net premium.
This is not a new phenomenon — it’s happened in other areas in previous years and it will continue to happen in various areas as insurer participation, plan options, and premiums fluctuate from one year to the next. But it’s important for enrollees to understand, especially given that Colorado garnered so many headlines about decreasing premiums for 2020.
It can be shocking to get a renewal notice indicating a substantial after-subsidy rate increase after seeing news reports about widespread rate decreases, but hopefully this summary helps to illustrate how rate changes for people who get subsidies don’t necessarily mirror rate changes for people who don’t get subsidies. If our Denver family had an income of $110,000 (and was thus not eligible for subsidies), they would see a reduction in their premiums from 2019 to 2020: If they had enrolled in the cheapest plan in 2019 it would have cost them $1,102/month, and it would have dropped to $909/month in 2020.
Why did Colorado lawmakers abandon public option legislation in 2020?
After many months of work by regulators and lawmakers, the 2020 legislation that would have created the “Colorado Option” plan was abandoned by lawmakers in May 2020, due to the COVID-19 crisis. If the bill had been successful, the Colorado Option plan would have been available to state residents during the open enrollment period in late 2021, with coverage effective in January 2022. But lawmakers felt that crucial stakeholders — including hospitals and medical staff — could not be expected to participate in the legislative process when their focus needed to be on the COVID-19 pandemic instead. And the budget shortfalls caused by the pandemic would also likely have made passage of the bill nearly impossible in 2020.
Lawmakers noted that they planned to try again in 2021, hopefully amid better circumstances. In January 2021, the bill’s sponsored confirmed that they were working to draft new legislation for consideration in the 2021 session, although they noted that it “will look different than last year’s bill.”
Here’s a backstory on Colorado’s public option:
H.B.1004, signed into law in May 2019, directed the Division of Insurance (DOI) and the Department of Health Care Policy and Financing (HCPF, which oversees Colorado Medicaid) to come up with recommendations for a public option health plan that would compete with private insurers in the state.
H.B.1004 included some basic parameters and guidance, but largely avoided the specifics of how the public option would operate. There were a variety of stakeholder meetings in 2019, aimed at gathering public input on how a public option in Colorado should be crafted. HCPF and DOI presented their draft proposal in October 2019, and their final proposal, with modifications based on public comments and stakeholder feedback, was unveiled in mid-November. Regulators hoped to have the program — referred to as the Colorado Health Insurance Option or simply the Colorado Option plan — up and running by the fall of 2021 so that residents could have coverage in effect as of 2022.
The proposal called for the Colorado Health Insurance Option to be available statewide, offered by the state’s existing health insurers. The individual market state option plans would have to spend at least 85 percent of premiums on medical costs, as opposed to the ACA’s 80 percent requirement (a Wakely actuarial analysis notes that this requirement would apply to the issuer as a whole, rather than just the Colorado Health Insurance Option plans offered by each issuer).
The proposal that the state unveiled in late 2019 stopped short of recommending exactly how much hospitals would be reimbursed under the state option plan, although the earlier draft proposal had recommended 175-225 percent of Medicare rates. In February 2020, the state published an overview of how hospital reimbursements would work under the new program. Hospitals would be paid a base rate of 155 percent of Medicare rates plus additional reimbursement for hospitals that fall into various categories (including critical access hospitals, independent hospitals, management of the underlying cost of care, or a high percentage of Medicare or Medicaid patients).
An actuarial analysis of the hospital reimbursement rate proposal notes that hospitals would end up being paid 155 to 218 percent of Medicare rates, with a statewide average of 168 percent (versus the current 280 percent that they’re currently paid). The analysis estimates that the average hospital can break even at 143 percent of Medicare payment rates, although there is considerable variation depending on location, patient demographics, and other factors. The program will not affect reimbursement rates for doctors and pharmaceuticals; it only sets reimbursement rates for hospitals/facilities.
The analysis also detailed how the state planned to create state-funded premium subsidies and cost-sharing subsidies that would be added on top of the ACA’s premium subsidies and cost-sharing subsidies. Colorado regulators have worked to try to ensure that people who receive premium subsidies will be adequately protected by the new program. They recognize that when average full-price premiums decrease (as they did with Colorado’s reinsurance program, and as they would under the Colorado Health Insurance Option) it directly benefits people who don’t get financial assistance under the ACA (ie, mostly people with income above 400 percent of the poverty level) but can result in people who do get financial assistance actually being worse off, as explained above.
So the plan was to use a 1332 waiver in order to recapture the estimated $43 million reduction in annual premium subsidies flowing into Colorado, and use those funds to provide:
additional premium subsidies (reducing the percentage of income that subsidy-eligible enrollees have to pay for the benchmark plan by 0.7 to 1.2 percent)
additional cost-sharing reductions: Enrollees with income between 200 and 249 percent of the poverty level would be able to enroll in a silver plan with actuarial value of 77 percent (as opposed to the ACA’s 73 percent), and people with income between 250 and400 percent of the poverty level would be able to enroll in a silver plan with an actuarial value of 73 percent (currently only available to people with income up to 250 percent of the poverty level).
The actuarial analysis projected that enrollment would increase by 18,100 people, all of whom are currently uninsured (or covered by plans like health care sharing ministries, which do not provide minimum essential coverage). Some would be eligible for subsidies, including the new state-funded subsidies, while others would be paying full price but would be able to take advantage of the lower premiums available through the Colorado Health Insurance Option, as premiums are projected to be an average of 12 percent lower than average premiums for other ACA-compliant plans.
[Note that the earlier version of the proposal projected an $89 million reduction in federal premium subsidies, which could be recaptured via a 1332 waiver. But the enhanced state-funded premium subsidies and cost-sharing subsidies are expected to result in more people enrolling in subsidized coverage, so the reduction in federal spending on premium subsidies isn’t going to be as substantial as initially estimated.]
Legislation to create the Colorado Option was introduced in March 2020, sponsored by Rep. Dylan Roberts (D, District 26), Rep. Chris Kennedy (D, District 23), and Rep. Kerry Donovan (D, District 5). But the COVID-19 pandemic began gripping the state, and the rest of the nation, later that month. And by early May, Colorado’s Democratic caucus had abandoned the legislation — although they’ve vowed to try again in 2021, noting that the pandemic highlights the need for a robust public health option in Colorado.
How many people are enrolled through Colorado’s health insurance exchange?
On January 6, 2021, Connect for Health Colorado announced that 172,000 people had already enrolled in coverage for 2021. There was still more than a week remaining in open enrollment at that point, and the enrollment tally had already surpassed the prior year’s enrollment, (when nearly 167,000 people had enrolled in medical plans for 2020) and reached a new record high for Colorado.
2020 was the first time Colorado’s exchange enrollment had dropped, after climbing each year from 2014 through 2019. And the 2021 enrollment total will certainly be a new record high, as it had reached that mark more than a week before open enrollment ended.
Here’s a look at Connect for Health Colorado enrollment over the years (note that the enrollment reports published by Connect for Health Colorado typically differ from the numbers published by CMS, generally due to small differences in the reporting periods):
2014: 125,402 people enrolled. In addition, nearly 182,000 people qualified for the state’s expanded Medicaid program. Colorado was one of only two states — Massachusetts is the other — where total individual market enrollment declined in 2014. Nationwide, individual market enrollment, including on and off-exchange policies as well as grandfathered and grandmothered plans, increased by 46 percent in 2014. But in Colorado, enrollment dropped by 4 percent. This was despite the fact that Colorado’s population grew by nearly 84 thousand people from mid-2013 to mid-2014 — only three states had a higher percentage growth in population.
2015: 140,327 people enrolled. Ninety percent of Colorado’s exchange enrollees picked nonprofit health plans in 2015 (Colorado HealthOP, which was an ACA-created CO-OP, Kaiser Permanente, and Rocky Mountain Health Plans).
2017: 161,568 people enrolled. Nationwide, there was an average decline in enrollment among states that use HealthCare.gov, and an average increase in enrollment among states that run their own exchange platforms. The decline in states that use HealthCare.gov was likely linked to uncertainty about the future of the ACA, and the Trump Administration’s decision to cut outreach and advertising during the final week of open enrollment. This didn’t impact states like Colorado, which run their own exchanges and conduct their own marketing and outreach.
How have premiums changed in Colorado’s exchange in previous years?
Here’s a look at how average rates have changed in Colorado’s marketplace over the years:
2015: Average increase of only 0.71 percent in the ACA-compliant individual market.
2016: Average increase of 9.84 percent, although it was 12.14 percent if we only count plans sold in the exchange. Average rate changes by carriers and rate sheets for each region of the state are available on the Division of Insurance website (click on “more” under the “approved plans for 2016” section). The Division of Insurance also created an at-a-glance map of the state that shows average rate increases by area, for both the individual and small group markets.
Three carriers that offered coverage in 2015 pulled out of the market in 2016: Colorado HealthOP, New Health Ventures (Access Health Colorado), and Time Insurance Company (Time only sold off-exchange plans in 2015, and exited the market nationwide at the end of the year). Golden Rule began offering individual market health plans in 2016, but only outside the exchange.
In the Denver area, benchmark premiums increased by an average of 32.2 percent for 2016. The benchmark plan is the second-lowest-cost Silver plan, and it’s not the same plan from one year to another. The increase in Denver (and across much of Colorado) was due to the fact that Colorado HealthOP had the lowest rates in most parts of the state in 2015, and their plans weren’t available in 2016. When compared with the average benchmark prices in other areas across the country, Denver’s rates were still very much in line with the national average.
2017: Average increase of 20.4 percent for individual market plans (on-exchange, the average was 20.9 percent, while off-exchange, it was 19.9 percent). In the small group market, the average increase was just 2.1 percent.
2018: Average rate increase of 34.3 percent for individual market plans. Insurers had initially proposed an average rate increase of 26.96 percent, although that included two filings for plans that would only be available off-exchange (Freedom Life, at 27 percent, and Anthem’s catastrophic PPO, at 33.5 percent).
Despite a robust review, regulators were only able to make a slight reduction in the proposed overall average rate increase, getting the average down to 26.7 percent from 26.96 percent. Most of the approved rates were very similar to what insurers had proposed, although the DOI made some significant changes to the rates that were filed by Bright Health and Cigna.
But those rate filings were based on the assumption that funding for cost-sharing reductions (CSR) would continue in 2018. The Division of Insurance noted in September that they had backup rates that would be used if CSR funding were to be eliminated. On October 12, the Trump Administration announced that CSR funding would end immediately. As a result, the backup rates were implemented in Colorado.
The Division of Insurance noted that the overall average rates would increase by 6 percentage points over the already-approved rates. Ultimately, the average rate increase in Colorado was 34.3 percent for 2018. Colorado was one of only five states where the cost of CSR was added to plans at all metal levels in 2018, rather than being concentrated only on plans at the silver metal level.
The Colorado Division of Insurance clarified that their decision to have insurers spread the cost of CSR across all metal plan premiums (as opposed to just silver plan premiums) was made because the state wasn’t sure that the federal government would accept a silver load strategy. Insurers filed the backup rates in the early summer of 2017, and it wasn’t entirely clear what other states were going to do at that point. Although almost all states ultimately ended up having insurers add the cost of CSR only to silver plan premiums — and the federal government didn’t push back against that strategy — Colorado regulators were afraid that they would end up in a situation where they needed to deploy their backup rates, only to find out that the federal government wouldn’t allow those rates, leaving them with no fallback plan. Hence, the backup plan included adding the cost of CSR to premiums for 2018 plans at all metal levels.
The rate filings are available in SERFF and the SERFF filing numbers are on the Colorado Division of Insurance statement about the approved rates. Some of the filings clearly indicated that a factor in the overall increase was the expected lack of enforcement of the individual mandate (or at least a perception that it wouldn’t be enforced) which insurers expected would lead to fewer people enrolling, and a less healthy risk pool than there would be if the individual mandate were being strongly enforced.
2019: Average increase of 5.6 percent. But because Colorado began allowing insurers to add the cost of CSR to silver plan rates for 2019 (as opposed to spreading the cost across premiums for all plans, the way they did in 2018), premium subsidies grew substantially in 2019. The state noted that while there was an overall average increase of 5.6 percent for unsubsidized premiums, people with premium subsidies who kept the same plan from 2018 to 2019 saw an average decrease of 24 percent in their after-subsidy premiums.
Under Colorado’s new approach to handling the cost of CSR, if the exact same silver plans are also sold off-exchange, they have to include the cost of CSR in their premiums. But as long as the on- and off-exchange silver plans have a difference in benefits, the cost of CSR can be added only to the on-exchange silver plans.
To accomplish this, the Colorado Division of Insurance suggested the insurers could slightly adjust (by $5) the off-exchange ambulance/emergency transportation benefit in order to have a slight difference between the on- and off-exchange plans. The two plans would then have different identification numbers in the Health Insurance Oversight System (HIOS) and could then have differing premiums, with the cost of CSR added to the on-exchange version and not to the off-exchange version. Insurers have the option of using a different approach to creating a slight benefit difference between on- and off-exchange silver plans, but had to discuss the proposal with the Division of Insurance before proceeding.
Connect for Health Colorado projected that two-thirds of subsidy-eligible enrollees would be able to select bronze plans that would be free after 2019 premium subsidies are applied. Although this happened in many other states (here’s an example, from Wyoming) in 2018, it didn’t happen in Colorado in 2018 because the cost of CSR was added to all plan premiums, and not just silver plan premiums. But when Colorado began silver loading the cost of CSR as of 2019, zero-premium bronze plans became available to many enrollees, due to the much larger premium subsidies and the relatively smaller bronze plan prices.
2020: Average premiums decreased by 20 percent, thanks to the state’s new reinsurance program (described above).
What health insurance companies offer coverage in Colorado’s exchange?
Eight insurers offer coverage in Colorado’s exchange in 2021: Anthem (HMO Colorado), Bright, Cigna, Denver Health, Friday Health Plan, Kaiser Permanente, Oscar, and Rocky Mountain Health Plan. Two insurers expanded their coverage areas for 2021. So while there were 22 counties in Colorado (out of 64) where Anthem BCBS was the only insurer offering plans in the exchange in 2020, that dropped to just ten counties in 2021.
Colorado has always had a robust exchange, although most of the insurer participation is concentrated along the I-25 corridor (Colorado Springs, Denver, Fort Collins, etc.). In the mountains and eastern plains, insurer participation has been much more limited. In the first few years of exchange operation, there was some upheaval in terms of insurer participation, but it had leveled out at seven insurers. Oscar Health joined the Colorado exchange in the Denver metro area in 2020, bringing the total number of insurers to eight.
Here’s a look at how carrier participation in Colorado’s exchange has changed over time:
2014: Ten insurers offered individual market plans in Colorado’s exchange in 2014: All Savers, Cigna, Colorado Choice, Colorado Health OP (an ACA-created CO-OP), Denver Health, HMO Colorado (Anthem), Humana, Kaiser, New Health Ventures (Health Access Colorado), and Rocky Mountain Health Plans.
2015: The same ten insurers continued to offer individual market plans in the exchange in 2015.
2016: There were several changes for 2016. New Health Ventures (Health Access Colorado), which had 450 members, dropped out of the market at the end of 2015 after suffering “heavy financial losses.” But most significantly, there were also 82,000 people with CO-OP (Colorado HealthOP) plans who had to pick new plans for 2016, as the CO-OP shut down at the end of 2015.
Colorado HealthOP had by far the lowest premiums in most areas of Colorado in 2015, and particularly for enrollees who don’t receive premium subsidies, the switch to a different carrier meant a sharp increase in premiums for 2016 (in hindsight, the low premiums and generous benefits that the CO-OP offered were clearly unsustainable).
Amid the carrier exits, there was one entrant: UnitedHealthcare of Colorado began offering individual market plans in the state, both on- and off-exchange. Their participation was short-lived, however, as they left the market at the end of 2016.
There were still 75,000 people with grandmothered plans in the individual market in Colorado in 2015, and all of them had to select new coverage for 2016, as grandmothered plans terminated at the end of 2015 in Colorado.
2017: Humana and UnitedHealthcare exited the individual health insurance market in Colorado, both on and off-exchange, at the end of 2016. According to the Colorado Division of Insurance, the carriers’ decisions to leave the individual market impacted about 20,000 people.
Rocky Mountain Health Plans (RMHP, otherwise known as Rocky Mountain HMO) and Anthem BCBS continued to offer plans in the individual market — including in the exchange — in 2017, but their offerings were reduced.
RMHP began offering individual market plans only in Mesa County as of 2017. This is the Grand Junction area, and it’s where RMHP is based. Roughly 10,000 people in other areas of Colorado needed to enroll in new coverage for 2017, as their RMHP coverage ended at the end of 2016. RMHP’s exit from the individual market in the mountains and western slope left many areas in that region with Anthem BCBS as their only on-exchange option starting in 2017.
Anthem continued to offer HMO plans throughout Colorado in 2017 (and continues to do so as of 2019), but they discontinued their PPOs at the end of 2016. There were 62,310 people with Anthem PPOs in the individual market in Colorado in 2016. All of them had to select a new plan for 2017. They still had access to Anthem plans, albeit HMOs.
All together, including Humana, United, RHMP, and Anthem enrollees, more than 92,000 people had to switch plans at the end of 2016.
But Bright Health Insurance was approved by the Colorado Department of Insurance to start offering individual plans on and off the exchange in 2017. Bright was the first new carrier to enter the exchange in Colorado since the exchange opened for business in the fall of 2013. They began offering plans in eight of Colorado’s 64 counties in 2017: Arapahoe, Boulder, Broomfield, Denver, Douglas, El Paso, Jefferson, and Summit counties (there are 16 zip codes in Boulder County, but Bright Health Insurance was only available in four of them. The other seven counties appeared to have coverage county-wide though).
2018: Colorado Choice, a Colorado non-profit that’s offered coverage for more than four decades, was purchased by Melody Health at the beginning of June 2017 (Melody had planned to offer coverage in Wyoming and Nevada for 2017, but did not get the necessary regulatory approval in time to sell 2017 plans). With the acquisition, Colorado Choice plans began to be marketed as Friday Health Plans for 2018, and are for-profit rather than non-profit. Colorado Choice plans were available in five of Colorado’s nine rating areas in 2017, and that grew to six rating areas for 2018. However, Colorado Choice/Friday Health offered fewer plans in each area in 2018.
Although 14 of Colorado’s 64 counties had just one participating insurer in 2018, almost 95 percent of Connect for Health Colorado’s enrollees lived in areas where there were at least two insurers offering plans, and more than 83 percent of enrollees had three or more insurers from which to choose.
2019: Friday Health expanded into the three remaining rating areas, and joined Anthem in offering coverage in all nine of Colorado’s rating areas (Anthem offers plans in every county, whereas Friday only had partial coverage in three of the nine rating areas; their coverage in the West rating area in 2019 was limited to just two of the 21 counties). Friday’s rate filing indicated that they expected their membership to grow to 10,000 people as a result of their coverage area expansion (by the time they filed their 2020 rate proposal, enrollment stood at 7,293). Pueblo went from having two insurers in the exchange to three, Boulder went from having four to five, and Grand Junction from two to three. Grand Junction is unique in that it’s the only rating area where Rocky Mountain Health Plans offers individual market coverage, and the only rating area where Kaiser did not offer coverage in 2019.
The Division of Insurance published a chart showing the projected change in average after-subsidy premiums (for enrollees who receive premium subsidies) from 2018 to 2019, in each of the state’s nine rating areas, for enrollees who keep the same plan in 2019 than they had in 2018. Overall, there was an average decrease of 24 percent. But in Grand Junction, subsidized enrollees who kept the same plan from 2018 to 2019 ended up with an average premium increase of 38 percent. However, if they were willing to switch to the lowest-cost plan at the same metal level, they saw an average after-subsidy premium decrease of 56 percent.
This is a perfect illustration of how a new insurer entrant can disrupt a market, and how the effect can be both good or bad, depending on your perspective. Friday Health took over the benchmark plan spot in Grand Junction in 2019, with rates that were lower than the benchmark would otherwise have been. That means everyone in that area who received premium subsidies was getting smaller subsidies in 2019 than they would otherwise have received. If they opted to keep the same plan they had in 2018, they may have seen significant average net premium increases, due to the smaller premium subsidies. If they opted to switch to a lower-cost plan in the same metal level (offered by Friday Health), they saw a sharp reduction in their premiums for 2019. But for people with pre-existing conditions, provider networks and drug formularies play a role in determining the feasibility of switching to a new plan.
2020: Oscar Health joined the exchange in the Denver area. All of the other insurers continued to offer plans — although there were some shifts in their coverage areas — so a total of eight insurers are offering plans in Colorado’s exchange in 2020. There are 22 counties in Colorado where Anthem is the only insurer offering plans in the exchange, up from 14 counties in prior years.
Friday Health Plans exited several counties in the eastern part of the state at the end of 2019, although they had no enrollees in any of those six counties. And Kaiser exited the western/mountain area of the state (Kaiser had no enrollees in three of the counties where they exited; curiously, Kaiser’s plans did not appear on the exchange’s plan comparison tool in counties like Routt, even in 2019 when they supposedly offered on-exchange plans in that area). But Bright Health entered Summit County as part of the Peak Health Alliance, preventing that county from dropping to a single insurer.
2021: Rocky Mountain Health Plans and Bright Health expanded their coverage areas for 2021. RMHP expanded into 12 additional counties: Archuletta, Dolores, Garfield, Gunnison, Hinsdale, La Plata, Montezuma, Montrose, Ouray, Pitkin, San Juan, and San Miguel. Bright Health expanded into Dolores, Grand, Lake, La Plata, Montezuma, and San Juan counties. There are only ten counties in Colorado with just a single insurer (Anthem) offering coverage in 2021: Eagle, Jackson, Logan, Moffat, Phillips, Rio Blanco, Routt, Sedgwick, Washington, and Yuma counties.
State is seeking CMS input on whether federal permission could be granted to allow anyone to buy a catastrophic plan
S.B.132 was signed into law in 2018, and directed the state to conduct an actuarial study on the impact of allowing people over the age of 30 who don’t have hardship exemptions to purchase catastrophic plans. The bill was amended in February 2018 to ensure that the catastrophic plans would only be available through the exchange. The provision requiring that the state conduct an actuarial study and only submit the 1332 waiver if the proposal would not reduce total premium subsidies or increase average premiums was also an amendment (the initial bill would have just directed the state to seek federal approval to expand access to catastrophic plans).
The ACA’s premium subsidies cannot be used for catastrophic plans, so the expansion of catastrophic plans would likely only appeal to healthy people who aren’t eligible for subsidies and are currently paying full price for the cheapest bronze plans they can get (catastrophic plans are generally less expensive than bronze plans because they’re in a separate risk adjustment pool). The legislation stated that if the study found that doing so would not reduce the total amount of premium subsidies provided to Colorado residents, and would not result in higher average individual market premiums, the state would then submit a 1332 waiver to the federal government, seeking permission to allow anyone in Colorado to purchase a catastrophic plan (the ACA limits the sale of these plans to people under age 30, and people who have a hardship exemption from the ACA’s individual mandate).
The state contracted with Wakely for the actuarial analysis, and the results were published in November 2018. Wakely concluded that total premium subsidies would likely increase (by no more than 6.6 percent) during the first year of universally available catastrophic plans. This is because healthier people would be expected to migrate to lower-cost catastrophic plans, leaving a less healthy population in the metal-level plans. That would lead to higher premiums for the metal-level plans, and since premium subsidies are based on the cost of the benchmark silver plan, subsidy amounts are expected to be higher. And since the people switching to catastrophic plans are expected to be those who aren’t eligible for subsidies anyway, they wouldn’t be giving up subsidies (and thus saving the federal government money) with their switch to catastrophic coverage.
The ACA only allows 1332 waivers to be approved if doing so would not increase federal deficits. Since premium subsidies are funded by the federal government, Wakely’s analysis notes that “allowing greater enrollment in Catastrophic plans would not meet the Federal deficit requirement as part of a 1332 waiver.” But in October 2018, CMS issued new guidance for 1332 waivers, noting that although waivers still cannot be approved if they would increase the federal deficit in the long run, it’s now possible for a waiver to be approved if it would result in increased federal spending in a given year, but not overall. In light of this and the result of Colorado’s actuarial study, Colorado Insurance Commissioner Mike Conway sent a letter to CMS in November 2018, asking whether a 1332 waiver to expand access to catastrophic plans would be likely to be gain approval. The state is still awaiting a reply as of 2020.
Information about S.B.132, the actuarial study, and correspondence with CMS can be found here.
Allowing brokers to charge fees
S.B.136 was signed into law in 2018. It allows insurance brokers to charge clients a fee if the insurer doesn’t pay a commission. Brokers were not previously allowed to charge any sort of fee, and have historically only been compensated via commissions from insurance carriers (with enrollees paying the same price for their coverage, regardless of whether they use a broker or not).
But some insurers have eliminated broker commissions, resulting in fewer brokers who are willing to work with individual market clients (in the group market, insurers still pay commissions). S.B.136 was designed to ensure that there will continue to be brokers available to serve people who buy coverage in the individual market, although the consumers may have to pay for that assistance themselves.
The Colorado Division of Insurance proposed regulations for broker fees (here and here), which became effective August 8, 2018.
DOI banned differing commission structures for brokers
In late 2015, many of the nation’s health insurance carriers began reducing or eliminating broker commissions, mostly for plans sold outside of open enrollment (during special enrollment periods triggered by qualifying events) or for benefit-rich plans at the gold and/or platinum level.
The general consensus was that the commission cuts were an effort by health insurance carriers to limit sales in general, or to limit sales of benefit-rich plans, which tend to be more popular among enrollees who have health conditions, and are more expensive to insure. In 2014 and 2015, eligibility for special enrollment periods was very loosely enforced by Healthcare.gov and some of the state-run exchanges, and carriers noted that healthcare utilization tended to be higher for people who enrolled outside of open enrollment.
In December 2015, Colorado’s Department of Insurance issued a regulatory bulletin (B-4.87) stating that carriers cannot offer “differing commission structures,” which they defined as different commission levels for different metal levels, different commission structures for plans sold during open enrollment versus outside of open enrollment, or “not paying commissions on certain plans offered in the State of Colorado.” The Department of Insurance warned carriers that none of those actions are allowed, and that carriers that utilize differing commission structures would risk “enforcement actions to remedy those violations.”
The purpose of the state’s regulatory bulletin was to protect consumers’ access to the full range of plans available, regardless of whether the consumer is enrolling during open enrollment or as a result of a qualifying event, and regardless of what metal level plan the consumer needs.
Bulletin B-4.87 is still in effect, but some insurers in Colorado have simply switched to a model under which they pay no commissions at all for new enrollments. There’s no “differing commission structure” so the lack of commissions doesn’t run afoul of the regulation. But it does result in fewer brokers being willing to assist people with individual market coverage (commissions are still paid by all insurers for group health insurance plans). After declining in 2017 and 2018, broker commissions have increased again for 2019, as insurers have started to once again be profitable in the individiual market
Regulators considered, but rejected, a switch to a single rating area
Colorado has significant disparity in terms of healthcare costs — and thus health insurance premiums — from one area of the state to another. Rates in the mountain areas of the state are far higher than rates along the I-25 corridor, and although subsidies make coverage affordable for people who are eligible, there’s no assistance for someone earning more than 400 percent of the poverty level.
As an example, a 59-year old in Pagosa Springs who earns $50,000/year would have had to pay $1,063/month (25 percent of her income) for the least expensive bronze plan available in the exchange in 2019, and is ineligible for any premium subsidies to make the coverage more affordable (note that if she earned $48,000, she would be eligible for $1,006/month in premium subsidies and could get the least expensive plan for just $56/month; the subsidy cliff is most significant for older applicants in areas where health insurance is expensive).
In an effort to address the disparity, then-Governor Hickenlooper signed HB 1336 into law in May 2016. The bill directed the Colorado Department of Insurance to study the impact of making Colorado one unified rating area, meaning that premiums would rise in the areas where they’re currently lower, and would fall in the mountain areas of the state where they’re currently higher.
The DOI’s report on the impact and viability of a single rating area was presented to the legislative committees in August 2016. The DOI did not recommend that the state become a single rating area, but recommended instead that the state work to find ways to lower the underlying cost of health care, since that’s what drives health insurance premiums. Insurance Commissioner Marguerite Salazar noted that a single rating area strategy could backfire, leading carriers to adjust their plan offerings or even leave the state altogether.
In March 2016, Governor Hickenlooper signed HB1148 into law. HB1148 gives the legislative oversight committee increased authority to monitor and oversee various aspects of Connect for Health Colorado’s rule-making processes.
The law gives the legislative committee “oversight over rules and policies proposed by the health benefit exchange that affect bidding and awarding contracts, carrier and regulating carrier participation, regulating broker participation and compensation, interacting with other state agencies, managing and compensating the assistance network, or the handling of any type of appeal.”
Colorado CO-OP shut down by regulators
On October 9, 2015, Colorado HealthOP — the state’s ACA-created CO-OP — joined six other CO-OPs that had already failed (and by the end of 2015, 12 of the original 23 CO-OPs had shut down; as of 2020, there were only four CO-OPs still in operation around the country). The Department of Insurance announced that they had made the difficult decision to decertify Colorado Health OP from the state-run exchange, effectively shutting down the CO-OP.
Although Colorado HealthOP was the seventh CO-OP to fail, they were the first one to publicly disagree with regulators over the shut-down. In their message to members, the CO-OP called the Colorado Division of Insurance’s decision “both irresponsible and premature” and noted that they were “astonished and disappointed by the DOI’s decision”. The CO-OP had said just the day before that they had three viable solutions for funding, and they noted that they had presented them to the DOI earlier in the week.
Colorado Health OP had said that they were on track to pay back their federal start-up loans in full and ahead of schedule, but that was derailed by the announcement on October 1 that risk corridor payments would be just 12.6 percent of the amount owed to each carrier. The Colorado Division of Insurance explained that although the CO-OP had been under DOI supervision for most of 2015, the carrier had been meeting their reserve requirements until October. But the risk corridor shortfall meant that “the Colorado HealthOP’s rainy day fund will be completely wiped out, and is in fact expected to be in the negative by $34 million by the end of the year [2015].” Because of this, the DOI felt they had no option other than to decertify Colorado Health OP from the exchange.
In a last-ditch effort to be allowed to participate in the 2016 open enrollment, Colorado HealthOP filed a lawsuit in Denver District Court on October 19, requesting an injunction and temporary restraining order against then-Insurance Commissioner Marguerite Salazar. But by the end of the day, following a closed-door court hearing, the case had been withdrawn (and suppressed by the court) and the CO-OP had agreed to begin the process of winding down their operations by the end of the year.
Colorado HealthOP had about 80,000 people enrolled in individual plans in 2015. All of those members had to sign up for new coverage for 2016. There were also almost 3,000 members enrolled in small group plans, and initially, the plan was that they would have to switch to new plans as of their next renewal date. But on November 17, Colorado Insurance Commissioner Marguerite Salazar announced that Colorado HealthOP’s small business plans would also terminate as of December 31, and small businesses with Colorado HealthOP plans had to secure coverage with a different carrier for 2016.
Universal healthcare defeated in Colorado in 2016 election
Supporters of universal healthcare in Colorado worked for months to gather signatures in support of ColoradoCare, a universal coverage system that would have gone into effect in 2019 if voters had approved it in the 2016 election. But voters resoundingly rejected the measure, with just 21 percent in favor, and 79 percent opposed.
ColoradoCare would have been enacted using a 1332 waiver under the ACA, which allows states to chart their own course for healthcare reform, as long as they do so in a way that covers at least as many people as the ACA would have, keeps coverage affordable and at least as comprehensive as it would be under the ACA, and doesn’t increase the federal deficit.
If those general guidelines are satisfied, the state can receive funding from the federal government equal to what would have been provided to the state’s residents in premium tax credits, cost-sharing subsidies, and small business tax credits. In Colorado, those funds, together with Medicaid waiver funds, were projected to total $11.6 billion in 2019. Total costs to run a zero-deductible, universal coverage program in Colorado were estimated at $35.6 billion for 2019. The $25 billion difference would have been generated through a 10% income tax. Employees would have paid only a third of the total tax, with their employers kicking in the remaining two-thirds (ie, employees would have paid 3.33 percent of their gross pay).
Grandmothered plans discontinued at the end of 2015
The Colorado Division of Insurance announced that transitional or “grandmothered” health plans had to be discontinued at the end of 2015. As of 2016, all individual and small-group plans in the state were either fully ACA-compliant, or grandfathered (effective dates prior to March 23, 2010).
Despite the fact that many other states are still allowing grandmothered plans to remain in force, there was controversy in Colorado over the fact that grandmothered plans were allowed to renew at all after January 1, 2014. Lawmakers in Colorado passed a bill in 2013 (House Bill 13-1266) that aligned Colorado healthcare law with the ACA. It required Colorado plans to be compliant with the ACA as of their issue or renewal date starting on January 1, 2014. Ultimately, the Division of Insurance used their regulatory power (also provided for in HB 1266) to allow the renewal of grandmothered plans in 2014, but there were questions as to whether or not they overstepped their bounds in doing so.
Background on Colorado’s exchange
Then-Governor John Hickenlooper informed the federal government in October 2012 that Colorado intended to run its own health insurance marketplace, and the state received federal approval of its plan in December 2012.
Unlike politicians in most other states, Colorado legislators voted on a bipartisan basis to move ahead with a state-run exchange. Legislation to establish the state marketplace passed in May 2011 and was signed by Hickenlooper in June 2011. In early 2013, the marketplace was given the brand name “Connect for Health Colorado.”
Colorado’s marketplace is governed by a 12-member board (nine voting and three ex-officio) and led by CEO Kevin Patterson.
State Exchange Profile: Colorado
The Henry J. Kaiser Family Foundation overview of Colorado’s progress toward creating a state health insurance exchange.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
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Q: Will my health insurance cover the costs of coronavirus testing and treatment?
A: The COVID-19 pandemic has drastically impacted the world over the last year. A common question that people have is “How will my health insurance cover the coronavirus?”
The short answer? It depends. With the exception of Original Medicare, health insurance differs greatly in the U.S., depending on where you live and how you obtain your coverage. Including the District of Columbia, there are 51 different sets of state insurance rules, separate rules that apply to self-insured group plans (which are not regulated by the states), and 51 different Medicaid/CHIP programs.
Nearly half of all Americans – including a large majority of non-elderly Americans – get their health coverage from an employer. Those plans are regulated by a combination of state and federal rules, depending on the size of the group and whether it’s self-insured or fully-insured.
And about 6 percent of Americans buy their own health insurance in the individual market, where both state and federal rules apply.
Is testing for COVID-19 covered by health plans?
Under the terms of the Families First Coronavirus Response Act (H.R.6201), Medicare, Medicaid, and private health insurance plans – including grandfathered plans – are required to fully cover the cost of COVID-19 testing, without any cost-sharing or prior-authorization requirements, for the duration of the emergency period (which has most recently been extended through mid-April 2021). That includes the cost of the lab services as well as the provider fee at a doctor’s office, urgent care clinic, or emergency room where the test is administered.
Since it’s a federal law, the requirements apply to both self-insured and fully-insured health plans, whereas the testing coverage requirements that numerous states have imposed (see examples here and here) are only applicable to fully insured plans.
What kinds of health plans might not cover testing?
Health plans that aren’t considered minimum essential coverage are not required to cover COVID-19 testing under the federal rules. This includes short-term health plans, fixed indemnity plans, and healthcare sharing ministry plans. It also includes the Farm Bureau plans in Tennessee, Iowa, Indiana, and Kansas – which are not considered health insurance and are specifically exempt from insurance regulations. But some of these plans are voluntarily covering COVID-19 testing and telehealth, so the specifics depend on the plan.
The CARES Act (H.R.748, enacted in March 2020) requires all non-grandfathered health plans, including private insurance, Medicare, and Medicaid, to cover COVID-19 vaccines without any cost-sharing for the member (the same caveats described above apply, however, as plans that aren’t regulated by the ACA are not included in the vaccine coverage requirement unless a state steps up and imposes its own requirement).
The full coverage of COVID-19 vaccines includes both the vaccine itself and any charges from the provider or facility for the administration of the vaccine. The COVID-19 vaccine has been added to the list of recommended vaccines, and the CARES Act required private health plans to begin fully covering it within 15 business days — much faster than the normal timeframe (which can be nearly two years, depending on the circumstances) between when a preventive care recommendation is made and when insurers have to cover it with no cost-sharing.
How can the uninsured get COVID-19 testing and vaccines?
H.R.6201 allows states to use their Medicaid programs to cover COVID-19 testing for uninsured residents, and provides federal funding to reimburse providers for COVID-19 testing for uninsured patients. The CARES Act also provides funding to reimburse providers for the cost of administering COVID-19 vaccines to uninsured individuals.
It’s worth noting that people who don’t have minimum essential coverage are considered uninsured, so depending on availability, they would be eligible for covered testing and vaccines under these programs. In the weeks since the first COVID-19 vaccines were granted emergency use authorizations by the FDA, numerous state insurance departments have issued statements clarifying that residents will not have to pay for the vaccine, regardless of their insurance status.
How much of COVID-19 treatment costs will health plans cover?
Although the federal and state governments have stepped in decisively to ensure that most people won’t incur out-of-pocket costs for COVID-19 testing and vaccines, the cost of treatment is a different matter altogether.
Although the majority of patients are able to recover without hospitalization, Harvard’s Global Health Institute estimates that about 20 percent of COVID-19 patients need to be hospitalized, and about 20 percent of hospitalized patients will need intensive care, including ventilators.
Inpatient care, including intensive care, is an essential health benefit for all ACA-compliant individual and small group health plans (but states define exactly what’s covered for each essential health benefit, so the specifics do vary from one state to another). And although large group plans are not required to cover essential health benefits, they are required to provide “substantial” coverage for inpatient care. If they don’t, the employer can be subject to a penalty under the ACA’s employer mandate, but about 5 percent of large employers still opt to offer scanty plans that don’t comply with this regulation and would offer little in the way of coverage for COVID-19 treatment.
But even when it’s covered by insurance, inpatient care is expensive. And so is outpatient care, depending on the scope of the care that’s needed. This is where patients’ cost-sharing comes into play. Under the ACA, all non-grandfathered, non-grandmothered health plans must have in-network out-of-pocket maximums that don’t exceed $8,550 for a single individual in 2021 (this limit doesn’t apply to plans that aren’t regulated by the ACA, such as short-term health plans).
So for most patients who need COVID treatment in 2021, out-of-pocket costs won’t exceed $8,550. But that’s still a huge amount of money, and most people don’t have it sitting around. The majority of health plans have out-of-pocket limits well below that amount, but most people are still going to be on the hook for a four-figure bill if they end up needing to be hospitalized for COVID-19. Although employer-sponsored plans tend to be more generous than the plans people buy in the individual market, the average employer-sponsored plan still had an out-of-pocket maximum of $4,039 for a single employee in 2020.
With that said, however, many insurers around the country have opted to waive, at least temporarily, members’ out-of-pocket costs related to COVID-19 treatment. It’s important to understand, however, that if an insurer is acting as an administrator for a self-insured employer-sponsored plan, the employer would have to agree to waive the cost-sharing, as it’s the employer’s money (as opposed to the insurance company’s money) that pays the claims.
Some states work to ensure COVID-19 treatment is affordable
Some states (New Mexico and Massachusetts are examples) stepped up early in the pandemic and issued guidance requiring state-regulated insurers to cover treatment (as well as testing) with no cost-sharing, and others (Minnesota is an example) have strongly encouraged insurers to do so (note that the regulation in Massachusetts only applies to doctor’s offices, urgent care centers, and emergency rooms, but not to inpatient care). In addition, several states are requiring telehealth treatment with no cost-sharing. But for the most part, people who need extensive treatment for COVID-19 are going to have to meet their health plan’s deductible and likely the out-of-pocket maximum, unless the insurer has agreed to waive these costs.
Many states are encouraging or requiring state-regulated insurers to treat COVID-19 testing and treatment as in-network, regardless of whether the medical providers are in the plan’s network. And federal rules require this for the vaccine as well, with the cost fully covered regardless of whether the member gets the vaccine from an in-network or out-of-network provider. For vaccine administration, providers are generally not allowed to seek any payment from the patient, including via balance billing. But for COVID-19 testing and treatment provided by out-of-network medical providers, patients could still be subject to balance billing in some circumstances as the out-of-network provider doesn’t have to accept the insurance company’s payment as payment-in-full if it’s less than the billed amount.
And although H.R.6201 prohibits insurance plans from requiring prior authorization for testing, insurers are still allowed to impose their normal prior authorization rules for other services, including COVID-19 treatment, unless a state otherwise prohibits it on state-regulated plans.
How do I make sure I have coverage to protect myself from COVID-19?
So what can you do to protect yourself as much as possible in terms of your health insurance coverage during this pandemic? Here are a few pointers:
If you’re uninsured (which includes having a health plan that’s not minimum essential coverage), check to see if enrollment in 2021 health plans is still ongoing in your state, or if you’re eligible for a special enrollment period. If so, enrolling in an ACA-compliant plan is certainly in your best interest. And if your income is low (even temporarily, due to a layoff), check to see if you might be eligible for Medicaid.
Check to see how your health plan handles prior authorizations.
Pay attention to the details of your health plan’s provider network. Your best chance of avoiding balance billing is to make sure you see in-network providers, and you don’t want to be having to sort that out while you or a family member is very unwell.
Check with your plan to see how telehealth is covered, and be sure you understand how to use the telehealth services. For non-severe cases, telehealth is recommended as a way to prevent further spread of the disease, and many health plans have temporarily reduced or eliminating cost-sharing for telehealth services in an effort to encourage its use.
If you had an HSA-qualified health plan last year and didn’t contribute the maximum allowable amount to your HSA, consider doing so now if you have the money available. You can make contributions for 2020 up until April 15. And if you currently have an HSA-qualified plan, you can contribute pre-tax money to the account for this year as well, at any point during the year. Whatever money you contribute to your HSA will be available to withdraw tax-free if you end up needing it to pay out-of-pocket costs for medical care.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
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Q. My wife and I each make about $40,000/year. If we file our taxes separately, can we each qualify for an exchange subsidy?
Use our calculator to estimate how much you could save on your ACA-compliant health insurance premiums.
A. No. The guidelines for eligibility are determined by total household income and the number of people in the household. For a single individual purchasing coverage with a 2021 effective date, the 400 percent mark is $51,040 in annual income (this is based on 2020 poverty level numbers, as the prior year’s numbers are always used). For two people, it’s $68,960. This makes sense, as it’s less expensive for two people to maintain one household than to maintain two separate households. Taxpayers whose filing status is married filing separately are explicitly ineligible to receive subsidies in the exchange, regardless of their income. (See this IRS publication for more details).
Premium subsidies have to be reconciled on your tax return, using Form 8962. If you receive a premium subsidy during the year and then end up using the married filing separately status, the full amount of the subsidy that was paid on your behalf would have to be repaid to the IRS with your tax return.
In March 2014, the IRS issued a special rule with regards to married people who are unable to file a joint return because of domestic abuse. If a taxpayer files as married filing separately, premium tax credits are still available as long as (1.) the spouses are not living together, (2.) the taxpayer is unable to file a joint return because of domestic violence, and (3.) the taxpayer indicates this information on his or her tax return.
For everyone else, the rules are clear that married couples must file a joint tax return in order to qualify for subsidies in the exchanges.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
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Q: What happens if my income changes and my premium subsidy is too big? Will I have to repay it?
Use our calculator to estimate how much you could save on your ACA-compliant health insurance premiums.
A: Monthly premium subsidy amounts (ie, the advance premium tax credit – APTC – that’s paid to your insurer each month to offset the cost of your premium) are estimated based on prior-year income and projections for the year ahead, but the actual premium tax credit amount to which you’re entitled depends on your actual income in the year that you’re getting subsidized health insurance coverage.
If recipients end up earning more than anticipated, they could have to pay back some of the subsidy. This can catch people off guard, especially since the tax credits are paid directly to the insurance carriers each month, but if overpaid, they must be returned by the insureds themselves.
The issue of reconciling APTCs was explained in a 2013 IRS publication (see the final column on page 30383, continued on page 30384) which clearly explains that they do expect people to pay back subsidies that are in excess of the actual amount for which the household qualifies.
But the portion of an excess subsidy that must be repaid is capped for families with incomes up to 400 percent of federal poverty level (FPL). Details regarding the maximum amount that must be repaid, depending on income, are in the instructions for Form 8962, on Table 5 (Repayment Limitation). These amounts are adjusted annually, but for the 2020 tax year, the repayment caps range from $325 to $2,700, depending on your income and your tax filing status (single filer versus any other filing status). GOP lawmakers considered various proposals in 2017 that would have eliminated the repayment limitations, essentially requiring anyone who received excess APTC to pay back the full amount, regardless of income. But those proposals were not enacted.
There are some scenarios in which repayment caps do not apply:
If a person projected an income below 400 percent of the poverty level (and received premium subsidies during the year based on that projection) but then ends up with an actual income above 400 percent of the poverty level (ie, not eligible for subsidies), the entire subsidy amount that was paid on their behalf has to be repaid to the IRS.
If a person projected an income at or above 100 percent of the poverty level (and received premium subsidies) but then ends up with an income below the poverty level (ie, not eligible for subsidies), none of the subsidy has to be repaid. This is confirmed in the instructions for Form 8962, on page 8, in the section about Line 6 (Estimated household income at least 100% of the federal poverty line). But there are new rules as of 2019 that make it less likely for people with income below the poverty level to qualify for premium subsidies based on income projections that are above the poverty level. This is explained in more detail here.
Is there any help for me if I have to repay premium subsidies?
The IRS noted that they would “consider possible avenues of administrative relief” for tax filers who are struggling to pay back excess APTC, including such options as payment plans and the waiver of interest and penalties for people who must return subsidy over-payments. If you find yourself in a situation where you must pay back a significant amount of the premium subsidies you received during the prior year, contact the IRS to see if you can work out a favorable payment plan/interest arrangement.
It’s also worth noting that contributions to a pre-tax retirement account and/or a health savings account will reduce your ACA-specific modified adjusted gross income, which is what the IRS uses to determine your premium tax credit eligibility. If you had HSA-qualified health coverage during the year, you can make HSA contributions up until the tax filing deadline the following spring. And IRA contributions can also be made up until the tax filing deadline. You’ll want to talk with your tax advisor to see what makes the most sense given your specific circumstances, but you may find that some pre-tax savings end up making you eligible for a premium subsidy afterall, or reduce the amount that you’d otherwise have to repay.
The COVID pandemic caused widespread financial uncertainty and employment upheavals throughout much of 2020. Additional federal unemployment benefits were provided to millions of people, but there are concerns that the premium tax credit reconciliation could be particularly challenging during the 2021 tax filing season, with many people having to repay subsidies that were paid on their behalf during a time they were unemployed in 2020.
In December 2020, insurance commissioners from 11 states sent a letter to President-elect Biden, recommending various immediate and long-term actions designed to improve access to health coverage and care. One of the short-term recommendations is to provide relief from subsidy claw-backs for the 2020 tax year. Even in the best of times, it can be challenging to accurately project your income for the coming year, but the uncertainty caused by the COVID pandemic made this much more challenging than usual. So it’s possible that the Biden administration and/or Congress might be able to take action to provide some relief in this area, for at least the 2020 tax year.
What if you get employer-sponsored health insurance mid-year?
Most non-elderly Americans get their health coverage from an employer. Individual health insurance is great for filling in the gaps between jobs, but what happens if you start off the year without access to an affordable employer-sponsored health insurance plan, and then get a job mid-year that provides health coverage?
If a premium subsidy was paid on your behalf during the months you had individual market coverage, you may end up having to repay some or all of the subsidy when you file your tax return. It all depends on your total income for the year, including income from your new job. If your total income still ends up being in line with the estimate you provided when you applied for your subsidy, you won’t have to pay that money back. But if your actual income for the year ends up being substantially higher than you initially projected, you may end up having to repay some or all of that subsidy when you file your taxes.
It doesn’t matter that your income was lower when you were covered under the individual market plan. In the eyes of the IRS, annual income is annual income — it can be evenly distributed throughout the year, or come in the form of a windfall on December 31. (As noted above, insurance commissioners have urged the Biden administration to consider ways of providing relief on this issue for the 2020 tax year, given that it was even more challenging than normal to accurately project an annual income during the COVID panemic).
Once you become eligible for an affordable health insurance plan through your employer that provides minimum value, you’re no longer eligible for premium subsidies as of the month you become eligible for the employer’s plan. But premium tax credit reconciliation is done on a month-by-month basis, so as long as your total income for the year is still in the subsidy-eligible range, you’ll almost certainly still be eligible for at least some amount of subsidy for the months when you had a plan that you purchased through the exchange.
Finally, if you’re offered health insurance through an employer that you feel is too expensive based on the share you have to pay, you can’t just opt out, buy your own health plan, and attempt to snag a subsidy. The fact that an affordable plan (by IRS definitions) is available to you renders you ineligible for money toward your premiums. Unfortunately, the cost of obtaining family coverage is not taken into consideration when determining whether an employer-sponsored plan is affordable, which leaves some families stuck without a viable coverage option.
How many people have to repay premium subsidies?
For 2015 coverage, subsidies were reconciled when taxes were filed in early 2016. The IRS reported in early 2017 that about 3.3 million tax filers who received APTC in 2015 had to repay a portion of the subsidy when they filed their 2015 taxes; the average amount that had to be repaid was about $870, and 60 percent of people who had to pay back excess APTC still received a refund once the excess APTC was subtracted from their initial refund. [IRS data for premium tax credit reporting is available here; as of 2019, data had only been reported for the 2014 and 2015 tax years.]
But on the opposite end of the spectrum, about 2.4 million tax filers who were eligible for a premium tax credit ended up receiving all or some of it when they filed their return. These are people who either paid full price for their exchange plan in 2015 but ended up qualifying for a subsidy based on their 2015 income, or people who got an APTC that was less than the amount for which they ultimately qualified. The average amount of additional premium tax credit paid out on tax returns for 2015 was $670.
[The IRS noted that it was very uncommon for people to pay full price for their coverage and wait to claim their full refund on their return: 98 percent of the people who claimed a premium tax credit on their return had received at least some APTC during the year.]
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
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Q. I’ve seen that the percentage of income I have to pay for my health insurance seems to change each year, based on IRS guidance. Does this change the actual amount that I pay for my coverage each year?
A. Maybe. But there’s a lot more to it than just the percentage of income that the IRS says you have to pay for the benchmark plan. It also depends on how your income changes relative to the federal poverty level (FPL, which changes every year), how your health plan’s premium changes, whether you make a change to your coverage during open enrollment, and the fact that you continue to get older each year. Let’s take a look at how it all works:
The ACA has a lot of moving parts. Various aspects of the regulations have to be updated annually, including the affordability rules. Initially, the IRS laid out guidelines detailing the percentage of tax filers’ income that they would be expected to contribute towards their own premiums, assuming their income doesn’t exceed 400 percent of the poverty level. (For premium subsidy purposes, income means an ACA-specific version of modified adjusted gross income, and subsidy eligibility is based on how that income compares with the prior year’s FPL.)
Applicable percentages increased each year from 2015 through 2017
Then in July 2014, the IRS released Revenue Procedure 2014-37, in which they explained the changes to the percentage of income that subsidy recipients would have to pay (known as the applicable percentage) if they selected the second-lowest-cost Silver plan in the exchange in 2015.
A few months later, in November 2014, the IRS published Revenue Procedure 2014-62, which laid out the changes to the applicable percentage for 2016. And in 2016, they published Revenue Procedure 2016-24, which detailed the changes for 2017.
For 2015, 2016, and again for 2017, there was a slight increase in the applicable percentage numbers. Because the applicable percentage climbed each year, there was often an assumption that everyone who gets subsidies was paying more for their health insurance (after subsidies) in each successive year. But that’s not necessarily the case, as we’ll see in a minute.
Applicable percentages decreased for 2018
For 2018, the applicable percentages decreased slightly when compared with 2017, meaning that the percentage of income that people had to pay (after subsidies) for their coverage was slightly lower at all income levels than it was in 2017. (See Revenue Procedure 2017-36 for 2018 numbers.)
This means that before accounting for other factors (including age and income changes), people buying coverage for 2018 had to pay a slightly smaller portion of their income for the second-lowest-cost Silver plan than they paid in 2017.
In 2018, people who were eligible for premium subsidies had to pay between 2.01 percent and 9.56 percent of their income for the benchmark plan in their area. Of course, people don’t have to pick the benchmark plan – they can pick a higher-cost plan and pay more, or they can pick a lower-cost plan and pay less.
Applicable Percentages increased for 2019 to the highest they’ve ever been
For 2019, the applicable percentages went back up again, and were the highest they had ever been. Even though the applicable percentages increased again for 2021, they’re still lower than they were in 2019.
But as described below, people who were subsidy-eligible and whose income hadn’t increased since 2014 were paying less in after-subsidy premiums in 2019 than they were paying in 2014 (assuming they selected the benchmark plan in both years), due to the annual growth in the poverty level since 2014.
The details for 2019’s applicable percentages are in Revenue Procedure 2018-34. For 2019 coverage, people who were eligible for premium subsidies paid between 2.08 percent and 9.86 percent of their income for the second-lowest-cost silver plan, after subsidies.
Applicable percentages decreased again for 2020
For 2020, the applicable percentages decreased again. The details are in Revenue Procedure 2019-29, which was published in July 2019. For 2020 coverage, people who are eligible for premium subsidies paid between 2.06 percent and 9.78 percent of their income, after the subsidy was applied, for the second-lowest-cost silver plan (ie, the benchmark plan).
Applicable percentages increased for 2021
Although they’re still lower than they were in 2019, the applicable percentages are higher in 2021 than they were in 2020. So at each income level, people will pay a slightly larger percentage of their income for the benchmark plan. But again, it’s important to remember that the poverty level also increased (the 2020 poverty level numbers are used for 2021 subsidy eligibility determinations), meaning that you’d have to get a raise in order to remain at the same percentage of the poverty level. If you don’t get a raise, your income as a percentage of the poverty level would be lower, resulting in a smaller amount that you’d have to pay for your health coverage after the subsidy is applied.
The specifics for 2021 are in Revenue Procedure 2020-36. For 2021 coverage, subsidy-eligible enrollees who buy a plan in the exchange have to pay the following percentages of their income, after the subsidy is applied, for the benchmark plan:
Income less than 133% of poverty = 2.07%
At least 133%, but less than 150% = 3.10% to 4.14%
At least 150%, but less than 200% = 4.14% to 6.52%
At least 200%, but less than 250% = 6.52% to 8.33%
At least 250%, but less than 300% = 8.33% to 9.83%
At least 300%, not more than 400% = 9.83%
[And on a related note, employer-sponsored plans are considered affordable in 2021 as long as the employee’s portion of the premium, for employee-only coverage (not including family members) doesn’t exceed 9.83 percent of the employee’s household income. This amount is always the same as the applicable percentage for people at the highest end of the subsidy-eligible income range.]
Making sense of applicable percentages
Those numbers might make your eyes glaze over. But the following examples will show how they actually affect premiums from one year to the next. The first set of examples show how Bob’s premiums changed from 2014 to 2021, if his income increases each year to keep pace with increases in the federal poverty level. Below that, you’ll see what happens if Bob’s income hasn’t increased since 2014. Yes, there’s math involved, but never fear — it’s pretty straightforward.
Example: Bob’s premium changes from 2014 to 2021, if he gets annual raises that keep his income at 200% of the poverty level
Bob’s MAGI (modified adjusted gross income as calculated for the ACA’s premium tax credits) is equal to 200 percent of poverty. In 2014, his applicable percentage was 6.3 percent, for 2018, it was 6.34 percent, for 2019, it’s 6.54 percent, for 2020 it was 6.49 percent, and for 2021, it’s 6.52 percent, assuming that he gets a raise each year so that his MAGI remains at 200 percent of poverty throughout that time frame.
For subsidy purposes, poverty level determinations are based on the year during which open enrollment begins. Since the open enrollment period for 2021 coverage took place in 2020, the government uses 2020 poverty level guidelines for determining subsidy-eligibility for any plans that have 2021 effective dates. (poverty level numbers are published by HHS in January each year, but that’s after open enrollment for that year’s coverage has already ended).
2014: $1,448 in premiums, with an income of $22,980
If Bob was earning 200 percent of poverty level when he got his 2014 plan, his MAGI was $22,980 (based on the 2013 poverty level) and his applicable percentage (the amount he had to pay for the second-lowest-cost silver plan) was 6.3 percent. So he had to pay $1,448 in annual premiums in 2014 ($22,980 x 0.063). His subsidy paid the rest of the premium, assuming he selected the second-lowest-cost silver plan (ie, the benchmark plan).
2018: $1,529 in premiums, with an income of $24,120
But for 2018, if Bob was still earning 200 percent of poverty level, his MAGI had increased to $24,120, since the poverty level has increased. His applicable percentage was 6.34 percent, which equaled $1,529 in annual premiums ($24,120 x 0.0634). That’s about $81 more in annual premiums than he had to pay in 2014. But in order to maintain his percentage of poverty level at 200 percent, he’s earning $1,140 additional dollars per year.
So while his net premium had increased, his income was also increasing (and note that this is comparing his premiums in 2014 with his premiums in 2018; if we just look at 2017 versus 2018, the slight decrease in the applicable percentage for 2018 nearly exactly offsets the increase in the poverty level, making his net premium just about exactly the same in 2018 as it was in 2017).
2019: $1,588 in premiums, with an income of $24,280
For 2019, the applicable percentage increased again, and the poverty level has also increased. (2018 poverty levels were higher than they were for 2017.) If Bob is still earning 200 percent of the poverty level when he signs up for 2019 coverage, it means his income has grown to $24,280. He’ll have to pay 6.54 percent of that for the second-lowest-cost Silver plan, which will come to $1,588 in annual premiums ($24,280 x 0.0654). So Bob is paying $140 more in annual premiums in 2019 than he was paying in 2014 — but his income is $1,300 higher than it was in 2014, since we’re assuming he’s stayed at 200 percent of the poverty level.
2020: $1,621 in premiums, with an income of $24,980
For 2020, the applicable percentage decreased, but the poverty level continued to increase. To keep Bob at 200 percent of the poverty level, his income had to grow to $24,980 for 2020 (based on 2019 poverty level numbers, since that’s what’s used for the 2020 coverage year). He’ll pay 6.49 percent of his income for the benchmark Silver plan, which will amount to $1,621 in annual net premiums. That’s $33 more in annual premiums than he paid in 2018, and $173 more than he paid in 2014. But his income in 2019 is $2,000 higher than it was in 2014.
2021: $1,664 in premiums, with an income of $25,520
For 2021 coverage, both the applicable percentage and the poverty level are higher than they were for 2020 coverage. For Bob’s income to stay at 200 percent of the poverty level, it had to increase to $25,520 in 2021. And he’ll have to pay $1,664 in after-subsidy premiums for the benchmark silver plan, since that’s 6.52 percent of his income. So his net premiums for the benchmark silver plan will amount to $43 more in 2021 (compared with what he had to pay in 2020), but his income has increased by $540.
What if Bob doesn’t get a raise?
But what if he doesn’t get a raise, and his MAGI is still $22,980 in 2021? That means his income will be 180 percent of poverty level, instead of 200 percent, so his applicable percentage will be less than the 6.52 percent that would have applied if his income had grown to keep pace with the increases in the poverty level ($22,980 divided by $12,760 is 1.8; that means Bob’s income is 180 percent of the 2020 federal poverty level, which we use to calculate 2021 subsidy eligibility).
The calculation
To calculate applicable percentages for incomes that are somewhere within each range on the chart, you can use the formula that’s explained in CFR 1.36B-3. (Scroll down to just underneath the applicable percentage chart, and look at example 2.) In the case of Bob, it looks like this:
Part 1
180 – 150 = 30 200 – 150 = 50 30/50 = 0.6
Basically, you look to see what income range you’re in. (Bob is between 150 and 200 percent of poverty range.) Then you just figure out how far along the income range you are. In this case, Bob’s income is 60 percent of the way along the range that goes from 150 to 200 percent of poverty.
Part 2
6.52 – 4.14 = 2.38 2.38 x 0.6 = 1.43
4.14 + 1.43 = 5.57
The second part of the calculation is to look at the applicable percentage range for 2021 coverage that corresponds to Bob’s income range (4.14 to 6.52 percent — meaning that the percentage of income he’ll have to pay for the second-lowest-cost silver plan is somewhere between those two percentages). And then you just figure out what number is 60 percent of the way along that applicable percentage range. In Bob’s case, it’s 5.57 percent.
His applicable percentage for 2021 is 5.57 percent, and his net premium (after his subsidy is applied) is actually lower in 2021 than it was in 2014. It ends up being 5.57 percent of $22,980, which is $1,280 in annual premiums. That’s about $168 less than he had to pay in 2014 for the second-lowest-cost Silver plan.
In 2020, with the same $22,980 income, Bob would have been at 183 percent of the poverty level and his applicable percentage was 5.68 percent. So his net premium for the benchmark silver plan was $1,305 in 2020 — lower than it was in 2014, 2018, and 2019. And as we saw above, it’s even lower in 2021, despite the fact that the applicable percentages increased across all income levels. Despite the increase in the applicable percentage, Bob would still see a decrease in the total dollar amount that he has to pay for the benchmark silver plan in 2021. Because Bob’s income hasn’t kept pace with the poverty level, the amount he has to pay in net premiums is declining over time.
Applicable percentages increased for 2019 and again for 2021, but so did the poverty level – and you have to consider them together
There are a lot of moving parts here. Although the applicable percentages for 2019 were the highest they’ve been since this system was implemented (and increased from 2020 to 2021, albeit not quite to 2019 levels) the poverty level has continued to increase each year. So people whose incomes have not increased in several years could find that they’re paying less in total premiums in 2021 than they were paying a few years earlier.
How the applicable percentage is calculated — it’s changed a bit in recent years
The general idea behind the adjustment to the applicable percentage table is to keep up with changes in premium growth as they relate to changes in income. If health care costs increase faster than income, we all have to pay a larger chunk of our income for health care. But if the economy does well and the ACA’s efforts to curb healthcare spending are successful, it’s also possible for the applicable percentage to decrease — as was the case for 2018 and for 2020.
The formula for the adjustment to applicable percentage is just premium growth since 2013 divided by income growth since 2013. But the methodology for calculating each of those numbers has changed over time.
Premium growth used to be based on average per-enrollee premiums for employer-sponsored plans, in terms of how much those premiums had changed since 2013. But for 2020, HHS finalized a methodology change that incorporates premium changes in the individual market, as well as premium changes for employer-sponsored plans.
This was widely expected to result in an increase in applicable percentages for 2020, but when the numbers were published in July 2019, the applicable percentages for 2020 were lower than they had been for 2019 (without the methodology change, applicable percentages would likely have decreased even more for 2020, as the estimation was that they would be 2.7 percent higher in 2020 with the new calculations that incorporate premium changes in the individual market).
Income growth was based on changes in GDP per capita for plan years 2014 through 2016, but HHS finalized a new formula that has been used to calculate income growth since 2017. The new formula calculates income growth based on per-capita personal income (PI) rather than per-capita GDP. The two methods would likely generate similar numbers, but HHS considers per-capita PI changes to be a more accurate reflection of how per-capita income changes from one year to the next.
The IRS also added a provision that allows for an additional adjustment for years after 2018 to reflect the premium growth rate relative to the growth in the consumer price index [the additional adjustment is described in §36B(b)(3)(A)(ii)(II)]. But the next section in that code [§36B(b)(3)(A)(ii)(III)] says that the additional adjustment is only needed if the total amount the government spent on premium subsidies and cost-sharing reductions in the previous year was more than 0.504 percent of the previous year’s gross domestic product. For 2019, 2020, and again for 2021, the IRS determined that the additional adjustment is not necessary.
Since subsidies are also a function of the poverty level — which generally adjusts upward each year — there’s a built-in factor that essentially ensures that people who are impacted by a higher applicable percentage are also enjoying at least a modest increase in income that outweighs the additional premiums.
Average benchmark premiums dropped in 2019, 2020, and 2021 so subsidies are smaller
Premium subsidy amounts are based on the relationship between an applicant’s income and the federal poverty level, but they’re also highly dependent on the premium that the applicant would have to pay for the benchmark plan. The formula described above is how subsidy amounts are determined in every state (keeping in mind that Alaska and Hawaii have their own poverty level numbers).
But what if you don’t buy the benchmark plan? Many areas have dozens of plans available for sale in the exchange, and only one of them is the benchmark plan (it changes from year to year, but it’s always the second-lowest-cost silver plan). If you buy a plan that’s not the benchmark plan and you’re eligible for a subsidy, you still get the same subsidy amount that you’d have received if you had purchased the benchmark plan, but it’s applied to the price of the plan you select instead.
Nationwide, overall average premiums in the individual market increased slightly in 2019, decreased slightly in 2020, and increased slightly in 2021 (overall, premiums are much more stable than they were in 2017 and 2018, when they grew rapidly in most areas). But average benchmark premiums have decreased in all three years. The decrease in benchmark premiums happened in some areas because an existing insurer lowered their rates, but in other areas it’s because a new insurer joined the market and began offering lower-priced silver plans than the ones that were already available.
Since premium subsidy amounts are based on the cost of the benchmark plan’s premium in each area, it’s not surprising that premium subsidy amounts have been dropping over the last few years. Across all HealthCare.gov enrollees who are receiving premium subsidies, the average subsidy amount was $550/month in 2018, dropped to $539/month in 2019, and dropped again, to about $492/month in 2020.
But as we saw above, the whole point of premium subsidies is to cover the difference between the actual cost of the benchmark plan and the amount the enrollee is expected to pay for that plan based on a specific percentage of their income. So even if the amount the enrollee is expected to pay remains unchanged, the premium subsidy amount will go down if the full-price cost of the benchmark plan goes down. For some enrollees, premiums are higher in 2021, but other enrollees have lower premiums in 2021 — and there are several factors involved in how much the net premium changes.
The best course of action is to actively shop for your coverage each year during open enrollment. Never let your plan automatically renew without checking first to make sure that it’s still the best option. And if you become eligible for a special enrollment period mid-year due to a qualifying event, make sure you actively compare all of the plans available to you before making a decision about whether to keep your existing coverage or make a change.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
https://www.maddoxinsured.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsured.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-01-15 04:20:292021-01-16 14:24:15Does the IRS change how much I’ll have to pay for my health insurance each year?
Q: There are no short-term health plans for sale in my state and I don’t qualify for a special enrollment period for ACA-compliant coverage. Is my only option to go without coverage until next year?
So what are your options if you’re not eligible to enroll in an ACA-compliant plan and short-term plans are not for sale in your area? This is a tough situation. In terms of getting real major medicalhealth insurance, you’ll have to wait until open enrollment to sign up, with coverage effective next January (unless you’re Native American, in which case you can enroll at any time).
Of course, if you or your spouse become newly eligible for an employer-sponsored plan between now and then, you could enroll in that plan as soon as you become eligible. If you become eligible for Medicaid or CHIP, you can enroll anytime, and if you’re gaining eligibility for Medicare, you’ll have a seven-month window during which you can enroll.
Otherwise, your options are very limited but not necessarily nonexistent. Depending on where you live, how healthy you are, and various other factors, you may be able to enroll in some type of limited coverage. It won’t be real health insurance, but it might end up being better than nothing.
Healthcare sharing ministry plans
If your lifestyle is compatible with the requirements for healthcare sharing ministries, this might be an option that will provide at least some level of coverage until you can enroll in a health insurance policy.
However, it’s important to understand that healthcare sharing ministries are not health insurance. The “coverage” they provide isn’t backed by any sort of guarantee, and consumers have fairly limited recourse if they run into problems with the sharing ministry plan.
Although no sharing ministry plan is actually providing real insurance coverage, some sharing ministry plans are less reputable than others and it’s important to do your homework if you’re considering a sharing ministry plan as a last recourse.
Fixed-indemnity plans
Fixed-indemnity plans are exempt from ACA regulations, and they’re often conflated with short-term health plans. But they are a very different type of coverage.
Short-term plans tend to be somewhat similar to the sort of coverage that was available in the individual major medical market prior to 2014 (before the ACA reformed that market and added numerous consumer protections). Fixed-indemnity plans, however, tend to provide much less coverage.
Instead of a deductible, coinsurance, and capped out-of-pocket costs, a fixed-indemnity plan operates from the perspective of limiting how much the insurance company has to pay, rather than limiting how much you have to pay. (To be clear, short-term health plans don’t entirely limit how much you have to pay either, since they have annual and lifetime benefit limits.)
So fixed indemnity plans will have a schedule of benefits that the policy will pay for certain services. For example, they might pay $1,000 for each night you spend in the hospital, and $1,500 for a surgery and $50 for an office visit. The amounts vary from one plan to another, but the point is that the benefit amounts are laid out in the policy itself, regardless of how much the services actually cost.
So if your fixed indemnity plan will pay $1,500 for a night in the hospital and you end up getting a bill for $15,000 after spending one night in the hospital, you’re going to be on the hook for the other $13,500. (Depending on the plan, you may receive fixed reimbursement amounts for other services performed while you were in the hospital.)
A fixed-indemnity plan should not be considered a substitute for health insurance and it’s absolutely not something that you should rely on long-term. But if you find yourself in a position where there is literally nothing else you can buy, it could end up saving you some money if you need medical care, so it’s arguably better than nothing. And there are fixed-indemnity plans for sale in many of the states where there are no short-term plans available.
Direct primary care
Depending on where you live, you may be able to find a primary care doctor who offers services through a direct primary care plan. These plans will help to keep your costs for primary care steady and predictable, but they won’t cover you if you need medical treatment beyond what can be provided in a primary care setting.
So while they are not a substitute for health insurance, you might gain some peace of mind by enrolling in a direct primary care plan while you wait to enroll in a real health insurance policy.
Community health centers
If you have no realistic option for health insurance coverage, you may still be able to access health care, for free or on a sliding scale basis, at a community health center or charitable clinic. Health centers provide primary care, but clinics in some locations can also provide additional services, including dental care, prescription drugs, and mental health care.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
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Q. I’ve seen a lot of differing headlines about health insurance rates for 2021 – some say rates increased, some say they decreased. Can you shed some light on this? Do these rate changes apply to everyone?
Federal poverty level calculator
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A. The vast majority of Americans get their health insurance either from an employer or from the government (Medicare, Medicaid, CHIP, TRICARE, VA, IHS). The rate changes that have been making headlines each fall for the last few years are for the individual market, which only accounts for about 4.2 percent of the population.
Do rate change headlines apply to all types of health insurance coverage?
When you see headlines about health insurance premium increases or decreases, the stories are typically about individual-market – and ACA-compliant – health insurance. The headlines aren’t referring to government coverage, or pre-ACA plans still in force.
More specifically:
If you get your health insurance through your employer or from the government, the subsidies, exchanges, and the individual market health insurance rates that you’re seeing in media reports don’t apply to you. Employer-sponsored insurance rates change annually, and your employer will provide you with information related to your plan options for the coming year, including how your plan, premiums and/or cost-sharing might be changing.
If you have Medicare, Medicaid, or CHIP coverage, you’ll receive information from the government or from your private insurer (if you’re enrolled in a Medicare Advantage, Medigap, Medicare Part D, or a Medicaid/CHIP managed care plan), letting you know how your coverage and/or costs might be changing for the coming year.
If your health insurance plan is grandfathered or grandmothered, you’re in a separate risk pool from the ACA-compliant plans offered by your health insurer, which means your rate increases for 2021 won’t necessarily match the rate increases you might be seeing in media reports about ACA-compliant plans issued by your insurance company. (There’s no requirement that carriers continue to renew grandfathered and grandmothered plans. They can decide to cancel them instead, and replace them with ACA-compliant plans.)
Headlines about rate increases (or decreases)
If you have an individual/family major medical health insurance plan, purchased on-exchange or off-exchange, that became effective January 2014 or later, it’s compliant with the ACA. The annual rate changes for these plans have been making headlines for the last several years, but the actual rate changes that apply to each enrollee’s premiums differ significantly because there are so many factors involved.
Here are some things to keep in mind:
When you see headlines about rate changes, they almost always apply to full-price premiums, before any premium subsidies are applied. But 86 percent of the people who get their coverage via the exchanges are receiving premium subsidies (and the majority of the entire individual market population has coverage via the exchanges). These subsidies make a huge difference in terms of how much people actually pay for their coverage and how much their after-subsidy premiums change from one year to the next.
Average full-price premiums increased significantly in 2017 and 2018. But they increased by less than 3% in 2019, decreased slightly for 2020, and increased slightly for 2021. But that’s doesn’t mean the rate changes were uniformly small: Average rates increased by more than 10 percent in Indiana, and decreased by more than 13 percent in Maine (and again, that’s for people who pay full-price premiums; changes in after-subsidies premiums can be very different).
CMS put out a press release in October 2020, noting that premiums in the exchanges were dropping for the third year in a row, and that benchmark premiums were decreasing by an average of 2 percent for 2021. This was widely reported in the media, but this 2% average rate decrease only applies to the average benchmark plans (second-lowest-cost silver plan) available via HealthCare.gov. That means it doesn’t apply to the vast majority of plans sold on HealthCare.gov, and it doesn’t apply to any of the plans sold in the 15 fully state-run exchanges.
What’s the biggest factor when it comes to premium increases?
The biggest factor is whether or not you get premium subsidies. If you don’t get a subsidy (which is the case for about 14 percent of exchange enrollees nationwide – plus everyone enrolled in off-exchange plans), your rate changes are pretty straightforward and just depend on how much your insurer is changing the premium for your plan next year.
Of course, you also have the option to shop around during open enrollment and select a different plan with a different premium.
But if you do get a subsidy, your rate change depends on multiple factors: How much your plan’s price changes, how much your area’s benchmark plan price changes (keeping in mind that the benchmark plan isn’t necessarily the same plan from one year to the next), as well as things like changes in your income and family size.
Because average benchmark premiums decreased for 2021, average premium subsidies are a little smaller in 2021 than they were in 2020 (and since the average benchmark premiums have decreased three years in a row, average premium subsidies have also decreased three years in a row). But that doesn’t mean your subsidy is smaller, since there’s a lot of variation from one area to another, and because your specific subsidy also depends on your own income, which can change from one year to the next.
And it’s important to keep in mind that although average benchmark premiums (on which subsidy amounts are based) decreased slightly for 2021, average premiums across the whole individual market increased slightly. So it was common for 2021 to see people who get premium subsidies ending up with an small overall average increase in their premiums for 2021 – assuming they weren’t enrolled in the benchmark plan in both years (the subsidies are designed to closely offset rate changes for the benchmark plan) or willing to switch to a lower-cost plan for 2021.
If you’re in an area where the benchmark premium decreased significantly, you may have found that your after-subsidy premium ended up increasing significantly, which can be disconcerting after you’ve seen headlines about rate decreases. This is what happened in some parts of Colorado in 2020, for example. And it can also happen in areas where a new insurer moves into the area and undercuts the previous benchmark plan; there are at least 20 states with new insurers for 2021 and numerous other states where existing insurers expanded their coverage areas.
Can you avoid health premium increases?
No matter what, you need to carefully compare your options when you enroll.
If you’re eligible for a premium subsidy, you need to shop in the exchange in your state. (Use our calculator to get an idea of whether you’re subsidy-eligible – it only takes a minute to find out. And make sure you understand what counts as income under the ACA and how you might be able to adjust yours to make yourself eligible for a subsidy.)
And if you currently have a plan you purchased outside the exchange, be sure to double-check your on-exchange options for next year before deciding whether to renew your off-exchange plan. And keep in mind that as the poverty level numbers increase each year, the limits for subsidy eligibility go up as well. In 2014, a family of four had to have a household income of no more than $94,200 in order to get a subsidy. For 2021, that number is nearly $105,000.
If you have a grandmothered or grandfathered plan and your insurer is letting you renew it, be sure to carefully compare it with the ACA-compliant options that are available to you. Consider the benefits as well as the premiums, and know that you’ll also qualify for a special enrollment period during which you can pick an ACA-compliant plan to replace your existing coverage, instead of renewing it.
So did health insurance premiums increase for 2021?
The answer is … it depends. It depends on where you live, what plan you have, whether you changed plans during open enrollment, and whether you get a premium subsidy. And if you do get a subsidy, there are several variables that go into how much your rates might have changed.
So ignore the headlines. Each year, focus on the plans that are available to you and see how your premium and out-of-pocket costs might change if you select a different plan versus keeping the one you have.
Thanks to the ACA, you have the option to shop from among all of the available plans in your area each year, regardless of whether you have health conditions or not (prior to the ACA, people in most states had limited access to new health plans in the individual market if they had pre-existing conditions).
The initial transition to ACA-compliant plans
The ACA makes health insurance available to anyone who applies (no more underwriting rejections or rate-ups) and subsidizes the cost for people who need it the most.
Some people who don’t get a premium subsidy saw sharp rate increases in 2014, with the transition to a guaranteed-issue market and plans that cover the essential health benefits. But even among people who pay full-price for their coverage, some enrollees may have experienced a rate decrease when they switched to an ACA-compliant plan, even without a subsidy. That could be the case for a variety of populations:
If they already opted for a very comprehensive, low-deductible plan prior to 2014, they may have been able to find coverage in the exchanges that wasn’t significantly more expensive than what they paid prior to 2014.
If they had an underwriting rate-up on their pre-2014 plan, the new plans might have been a less-expensive alternative. Although the standard rates for ACA-compliant plans were higher than the pre-2014 base rates, there’s no additional charge for people with pre-existing conditions. Prior to 2014, that was not the case. People with pre-existing conditions were often charged rates that were at least 25 percent higher than the base rates, and sometimes 100 percent higher.
Older applicants get a better deal than they used to prior to 2014. Rates for older enrollees are limited to three times the rates for young enrollees under the ACA, which is a dramatic shift from the pre-ACA ratios that often ran as high as five to seven times as much for an older applicant.
Who’s paying more? Who’s paying less?
There are some people who are paying quite a bit more for their health insurance now that the ACA has been implemented: primarily enrollees who are younger, healthy, had plans with high out-of-pocket exposure prior to 2014 (potentially higher than the ACA now allows, like a $10,000 individual deductible, for example), and also have incomes high enough to make them ineligible for subsidies.
However, there are plenty of people who are ineligible for subsidies who don’t fall into those other categories. For them, there hasn’t been as much in the way of “rate shock” over the last few years, and they might have ended up with a better deal starting in 2014, even without accounting for subsidies.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
https://www.maddoxinsured.com/wp-content/uploads/2020/12/maddox-insurance.png512512wpmaddoxinshttps://www.maddoxinsured.com/wp-content/uploads/2020/12/maddox-insurance-agency.pngwpmaddoxins2021-01-14 09:12:242021-01-15 14:21:14Did health insurance premiums go up or down for 2021?
The federal health insurance marketplace (HealthCare.gov) opened for business in the fall of 2013, and has provided an affordable health insurance shopping platform for millions of Americans. Admittedly, the federal exchange – along with many of the state-run exchanges – got off to a very rocky start in October 2013. But by December of that year, things were working better, and the exchange has been quite functional ever since.
In 2014, there were 191 health insurers selling policies on the federal exchange in 36 states (including states with partnership exchanges, as well as Idaho and New Mexico, both of which had federally supported state-based marketplaces in 2014). In September 2014, HHS issued a report on carrier participation for 2015, noting that the federally run exchange would have 57 additional insurers in 2015 – a 30 percent increase over the prior year. The number of participating carriers remained very stable in 2016; HHS reported that 238 carriers were offering plans across the states that use Healthcare.gov in 2016.
However, there was a widespread exodus of insurers leaving the exchanges nationwide for 2017 and again for 2018. By 2018, only 132 insurers were offering health plans through HealthCare.gov. But that trend then began to reverse itself, with insurers joining the marketplaces in many states for 2019, 2020, and 2021. As of 2021, there are 181 insurers offering plans through HealthCare.gov, despite the fact that the platform is now being used by only 36 states, after Pennsylvania and New Jersey transitioned to their own enrollment platforms in the fall of 2020.
During the open enrollment period for 2021 coverage — which ended in mid-December 2020 in states that use HealthCare.gov — more than 8.25 million people enrolled in plans through the federally-run exchange. Most of these enrollees receive premium subsidies that make their coverage much more affordable than it would otherwise be.
In addition, millions of people have enrolled in Medicaid through the federally run exchange, including many who are newly eligible due to Medicaid expansion (14 states have opted not to expand Medicaid however, and all of them are states that use the federally run exchange; Oklahoma and Missouri will both expand Medicaid in mid-2021).
Healthcare.gov does the heavy lifting
There are 24 states that have a fully federally run exchange (five of them provide plan oversight for the plans sold through the exchange: Kansas, Montana, Nebraska, Ohio, and South Dakota).
In addition, another six states (Delaware, Illinois, Iowa, Michigan, New Hampshire, and West Virginia) have established partnership exchanges, working together with the federal government to run the exchange. They use HealthCare.gov for enrollment, but the states also take on varying levels of plan management, consumer assistance, and outreach. The partnership states are counted together with the other 24 states, with all 30 states considered to be relying fully on the federally run exchange.
Some of the state-run exchanges also use HealthCare.gov for enrollment. Prior to the 2013 launch of the exchanges, some states wanted to operate their own exchange, but weren’t able to get an enrollment platform up and running in time. Idaho and New Mexico both opted to establish federally-supported state-based exchanges for 2014, meaning that while their exchanges were run by the state, they were using the Healthcare.gov enrollment platform, just like the states that rely fully on the federally run exchange.
Ultimately, Idaho was able to transition to running its own exchange by the time the second open enrollment period began in the fall of 2014. New Mexico opted to continue to use Healthcare.gov as a supported state-based marketplace, but plans to have its own website up and running by the fall of 2021.
As described here, there have been several changes to the approaches that states use in the ensuing years, and additional changes planned for the future. As of 2021, Arkansas, Kentucky, Oregon, New Mexico, Maine, and Virginia have state-run marketplaces but use the HealthCare.gov enrollment platform. Utilizing Healthcare.gov’s economies of scale and technologically smooth enrollment software simply proved to be a better choice than operating their own enrollment platform. But some of them are actively working towards running their own enrollment platforms in order to take advantage of the flexibility and control that provides.
All told – including states with partnership exchanges and federally supported state-based exchanges – Healthcare.gov is used in 36 states as of the 2021 plan year.
A changing carrier landscape
Prior to 2014, many people looking to buy individual health insurance had few options. A 2011 study by the Kaiser Foundation found that the individual insurance market was dominated by a single insurance company in 30 states and the District of Columbia.
The American Medical Association (AMA) also conducted a series of studies analyzing competition among health insurers, and found similar results. A 2012 AMA study determined that in nearly 40 percent of US metropolitan areas, a single insurance company had at least half of the market share. The same study also found that a single carrier had at least 30 percent of the market share in nearly nine out of ten U.S. markets.
Although 2014 ushered in a new era of guaranteed-issue individual health insurance – a dramatic change from the medically underwritten markets that existed in most states prior to 2014 – some states still had relatively few carriers offering coverage, particularly in the exchange.
In 2014, West Virginia and New Hampshire had only one participating exchange carrier, and several other states – Alabama, Wisconsin, North Carolina, Florida, Mississippi, and Arkansas – had only one carrier in at least a portion of the state (all eight of those states either rely fully on the federally run exchange, or have a partnership exchange model). In 2015, West Virginia still had just one carrier, although they gained a second carrier in 2016. New Hampshire now has three exchange carriers (although they had reached a high of five in 2015), and the other six states each gained at least one additional exchange carrier in 2015.
But carrier participation started to decline in 2016, and large swaths of the country had just one insurer offering coverage through the exchange by 2018. UnitedHealthcare, Humana, Aetna, Cigna, and Anthem all scaled back their exchange participation in 2017 or 2018.
Insurers started to join or rejoin the exchanges in 2019. By 2021, every state in the country (including those that use HealthCare.gov and those that run their own exchange platforms) had at least two participating insurers, although there are still some rural areas of some states where only one insurer offers plans in the marketplace (this brief from CMS shows how insurer participation changed in each county for 2021 in the states that use HealthCare.gov).
Long-term success
Healthcare.gov was created to fill a need when more than half the states decided that they didn’t want to run their own exchanges – either because they didn’t think it would be financially or technologically feasible, or because they were simply opposed to the ACA and didn’t want to participate in any activities that helped to implement the law.
But with eight years of enrollment in the books and many hurdles overcome, Healthcare.gov has proved to have staying power, and has also become a feasible solution for states that have run into problems with their own exchanges. In late 2013, the federal exchange’s glitchy website was the butt of many jokes and the cause of many headaches. But it has become an integral part of the individual health insurance market in two-thirds of the states. And while the Trump administration sharply reduced funding for HealthCare.gov’s outreach and enrollment support, the Biden administration could restore that funding.
How the American Rescue Plan Act will boost marketplace premium subsidies
Key takeaways
Edit: The Senate passed H.R.1319 on March 6, and the House passed the bill again on March 10. President Biden signed it into law on March 11. CMS published some initial information for marketplace enrollees on March 12.
Last weekend, the House of Representatives passed the American Rescue Plan Act of 2021 (H.R. 1319), an economic stimulus package designed to provide relief from the impact of COVID-19 on Americans. The bill has the support of the majority of Americans – including those registered as Republicans and Independents.
H.R. 1319 is now under consideration in the Senate, so we don’t yet know exactly what will be included in the final legislation. But the health insurance provisions in the House version of the legislation are unchanged from what the House Ways and Means Committee had initially proposed, and have not been sticking points for the bill thus far.
Several provisions in H.R. 1319 are designed to make health coverage more accessible and affordable. Today we’re taking a look at how the legislation would change the ACA’s premium subsidy structure for 2021 and 2022, and the impact that would have on the premiums that Americans pay for individual and family health coverage.
Help for 12 million marketplace enrollees, plus more who will newly enroll
If you’re among the 12 million people who purchase ACA-compliant coverage in the health insurance marketplaces, your coverage is likely to become more affordable under H.R. 1319.
What’s more, the Congressional Budget Office estimates that an additional 1.7 million people – most of whom are currently uninsured – would enroll in health plans through the marketplaces in 2022 as a result of the enhanced premium subsidies.
No one would pay more than 8.5% of their income for the benchmark plan
Some opponents of the legislation have criticized its premium subsidy enhancements as a handout to wealthy Americans. But that’s only because the legislation is designed to remedy the subsidy cliff – which can result in some households paying as much as half of their annual income for health insurance premiums. It’s a situation that’s obviously neither realistic nor sustainable for policyholders.
The Affordable Care Act (ACA) only provides premium tax credits (aka premium subsidies) if a household’s ACA-specific modified adjusted gross income doesn’t exceed 400 percent of the federal poverty level. For 2021 coverage in the continental U.S., that’s about $51,000 for a single person and $104,800 for a family of four. Depending on where you live, that might be a comfortable income – but not if you have to spend 20, 30, 40 or even 50 percent of that income on health insurance.
H.R. 1319’s adjustment to the premium tax credit guidelines would temporarily – for this year and next year – eliminate the income cap for premium subsidies. That means that – regardless of income – no one would have to pay more than 8.5 percent of their household income for the benchmark plan (the second-lowest-cost Silver plan available in the exchange in a given area).
Under this approach, subsidies would phase out gradually as income increases. Plan buyers would not be eligible for a subsidy if the benchmark plan’s full price wouldn’t be more than 8.5 percent of the household’s income. But in some areas of the country – and particularly for older applicants, who can be charged as much as three times the premiums young adults pay – premium subsidy eligibility could end up extending well above 400 percent of the poverty level.
In addition to addressing the subsidy cliff, H.R. 1319 also enhances premium subsidies for marketplace buyers who are already subsidy-eligible. The subsidies would get larger across the board, making after-subsidy premiums more affordable for most enrollees. At every income level, the legislation would reduce the percentage of income that people are expected to pay for the benchmark plan, which would result in larger subsidies.
Larger subsidies? Here are a few examples.
How much larger? It would depend on location, income, and age. Let’s take a look at some examples.
We’ll consider applicants with various income levels and ages in three locations: Albuquerque, New Mexico – where premiums are among the nation’s lowest; Jackson, Mississippi – where premiums are close to the national average; and Cheyenne, Wyoming – where premiums are among the nation’s highest.
In each location, we’ll see how things would play out for a 25-year-old, a 60-year-old, and a family of four (45-year-old parents, and kids who are 13 and 10), all at varying income levels.
You can see the full comparison in this spreadsheet. (Current premiums were obtained via HealthCare.gov’s browsing tool. Premiums under H.R. 1319 were calculated using the proposed applicable percentage table in Section 9661(a) and the methodology outlined here, which would be unchanged under the new legislation.)
In most cases, you’ll notice that the subsidy amount is larger under H.R. 1319, resulting in a lower benchmark premium and also a lower price for the lowest-cost plan available to that applicant (or more plans available with no premium at all). This is because the new legislation specifically reduces the percentage of income that people have to pay for the benchmark plan. That, in turn, drives up the subsidy amounts that are necessary to reduce the benchmark premium. And since premium subsidies can be applied to any metal-level plan, it also results in a lower cost for the other available plans (or more premium-free plans, depending on the circumstances).
As you consider these numbers, note that if the current subsidy amount is $0, either the benchmark plan is already considered affordable for that person, or their income is over 400 percent of the poverty level and subsidies are simply not available. If the subsidy amount is $0 under the H.R. 1319 scenario, it means that the benchmark plan would not cost more than 8.5 percent of the applicant’s income.
As you can see, the additional subsidies would be widely available, but would be more substantial for people who are currently paying the highest premiums. Under the current rules, it may not be realistic for our Wyoming family to pay more than $30,000 in annual premiums (enrolling in the benchmark plan, with premiums in excess of $2,500 per month). The American Rescue Plan Act would bring their annual premiums for the benchmark plan down to under $10,000, which is much more manageable.
The legislation is not, however, a giveaway to wealthy Americans. If that family earned $500,000, they still wouldn’t get a premium subsidy under H.R. 1319, because even at $2,528/month, the full-price cost of the benchmark plan would only amount to 6 percent of their income. Unlike Medicare and the tax breaks for employer-sponsored health insurance, financial assistance with individual market health insurance would not extend to the wealthiest applicants.
By capping premiums at 8.5 percent of income, H.R. 1319 provides targeted premium assistance only where it’s needed. And by enhancing the existing premium subsidies, the legislation makes it easier for people at all income levels to afford health coverage.
Premium enhancements would be retroactive but also temporary
Assuming these premium subsidy enhancements are approved by the Senate, they’ll be retroactive to the start of 2021. Current enrollees will be able to start claiming any applicable extra subsidy immediately, or they can wait and claim it on their 2021 tax return. The additional premium subsidies would also be available for 2022, but would no longer be available as of 2023 unless additional legislation is enacted to extend them.
And there’s currently a special enrollment period – which continues through May 15 in most states – during which people can sign up for coverage if they haven’t already. In most states, this window can also be used by people who already have coverage and wish to change their plan, so this is definitely a good time to reconsider your health insurance coverage and make sure you’re taking advantage of the benefits that are available to you.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
The post How the American Rescue Plan Act will boost marketplace premium subsidies appeared first on healthinsurance.org.
How the American Rescue Plan Act would boost marketplace premium subsidies
Key takeaways
Last weekend, the House of Representatives passed the American Rescue Plan Act of 2021 (H.R. 1319), an economic stimulus package designed to provide relief from the impact of COVID-19 on Americans. The bill has the support of the majority of Americans – including those registered as Republicans and Independents.
H.R. 1319 is now under consideration in the Senate, so we don’t yet know exactly what will be included in the final legislation. But the health insurance provisions in the House version of the legislation are unchanged from what the House Ways and Means Committee had initially proposed, and have not been sticking points for the bill thus far.
Several provisions in H.R. 1319 are designed to make health coverage more accessible and affordable. Today we’re taking a look at how the legislation would change the ACA’s premium subsidy structure for 2021 and 2022, and the impact that would have on the premiums that Americans pay for individual and family health coverage.
Help for 12 million marketplace enrollees, plus more who will newly enroll
If you’re among the 12 million people who purchase ACA-compliant coverage in the health insurance marketplaces, your coverage is likely to become more affordable under H.R. 1319.
What’s more, the Congressional Budget Office estimates that an additional 1.7 million people – most of whom are currently uninsured – would enroll in health plans through the marketplaces in 2022 as a result of the enhanced premium subsidies.
No one would pay more than 8.5% of their income for the benchmark plan
Some opponents of the legislation have criticized its premium subsidy enhancements as a handout to wealthy Americans. But that’s only because the legislation is designed to remedy the subsidy cliff – which can result in some households paying as much as half of their annual income for health insurance premiums. It’s a situation that’s obviously neither realistic nor sustainable for policyholders.
The Affordable Care Act (ACA) only provides premium tax credits (aka premium subsidies) if a household’s ACA-specific modified adjusted gross income doesn’t exceed 400 percent of the federal poverty level. For 2021 coverage in the continental U.S., that’s about $51,000 for a single person and $104,800 for a family of four. Depending on where you live, that might be a comfortable income – but not if you have to spend 20, 30, 40 or even 50 percent of that income on health insurance.
H.R. 1319’s adjustment to the premium tax credit guidelines would temporarily – for this year and next year – eliminate the income cap for premium subsidies. That means that – regardless of income – no one would have to pay more than 8.5 percent of their household income for the benchmark plan (the second-lowest-cost Silver plan available in the exchange in a given area).
Under this approach, subsidies would phase out gradually as income increases. Plan buyers would not be eligible for a subsidy if the benchmark plan’s full price wouldn’t be more than 8.5 percent of the household’s income. But in some areas of the country – and particularly for older applicants, who can be charged as much as three times the premiums young adults pay – premium subsidy eligibility could end up extending well above 400 percent of the poverty level.
In addition to addressing the subsidy cliff, H.R. 1319 also enhances premium subsidies for marketplace buyers who are already subsidy-eligible. The subsidies would get larger across the board, making after-subsidy premiums more affordable for most enrollees. At every income level, the legislation would reduce the percentage of income that people are expected to pay for the benchmark plan, which would result in larger subsidies.
Larger subsidies? Here are a few examples.
How much larger? It would depend on location, income, and age. Let’s take a look at some examples.
We’ll consider applicants with various income levels and ages in three locations: Albuquerque, New Mexico – where premiums are among the nation’s lowest; Jackson, Mississippi – where premiums are close to the national average; and Cheyenne, Wyoming – where premiums are among the nation’s highest.
In each location, we’ll see how things would play out for a 25-year-old, a 60-year-old, and a family of four (45-year-old parents, and kids who are 13 and 10), all at varying income levels.
You can see the full comparison in this spreadsheet. (Current premiums were obtained via HealthCare.gov’s browsing tool. Premiums under H.R. 1319 were calculated using the proposed applicable percentage table in Section 9661(a) and the methodology outlined here, which would be unchanged under the new legislation.)
In most cases, you’ll notice that the subsidy amount is larger under H.R. 1319, resulting in a lower benchmark premium and also a lower price for the lowest-cost plan available to that applicant (or more plans available with no premium at all). This is because the new legislation specifically reduces the percentage of income that people have to pay for the benchmark plan. That, in turn, drives up the subsidy amounts that are necessary to reduce the benchmark premium. And since premium subsidies can be applied to any metal-level plan, it also results in a lower cost for the other available plans (or more premium-free plans, depending on the circumstances).
As you consider these numbers, note that if the current subsidy amount is $0, either the benchmark plan is already considered affordable for that person, or their income is over 400 percent of the poverty level and subsidies are simply not available. If the subsidy amount is $0 under the H.R. 1319 scenario, it means that the benchmark plan would not cost more than 8.5 percent of the applicant’s income.
As you can see, the additional subsidies would be widely available, but would be more substantial for people who are currently paying the highest premiums. Under the current rules, it may not be realistic for our Wyoming family to pay more than $30,000 in annual premiums (enrolling in the benchmark plan, with premiums in excess of $2,500 per month). The American Rescue Plan Act would bring their annual premiums for the benchmark plan down to under $10,000, which is much more manageable.
The legislation is not, however, a giveaway to wealthy Americans. If that family earned $500,000, they still wouldn’t get a premium subsidy under H.R. 1319, because even at $2,528/month, the full-price cost of the benchmark plan would only amount to 6 percent of their income. Unlike Medicare and the tax breaks for employer-sponsored health insurance, financial assistance with individual market health insurance would not extend to the wealthiest applicants.
By capping premiums at 8.5 percent of income, H.R. 1319 provides targeted premium assistance only where it’s needed. And by enhancing the existing premium subsidies, the legislation makes it easier for people at all income levels to afford health coverage.
Premium enhancements would be retroactive but also temporary
Assuming these premium subsidy enhancements are approved by the Senate, they’ll be retroactive to the start of 2021. Current enrollees will be able to start claiming any applicable extra subsidy immediately, or they can wait and claim it on their 2021 tax return. The additional premium subsidies would also be available for 2022, but would no longer be available as of 2023 unless additional legislation is enacted to extend them.
And there’s currently a special enrollment period – which continues through May 15 in most states – during which people can sign up for coverage if they haven’t already. In most states, this window can also be used by people who already have coverage and wish to change their plan, so this is definitely a good time to reconsider your health insurance coverage and make sure you’re taking advantage of the benefits that are available to you.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
The post How the American Rescue Plan Act would boost marketplace premium subsidies appeared first on healthinsurance.org.
The Scoop: health insurance news – February 24, 2021
In this edition
Idaho is final state to open COVID-related enrollment window
Before we delve into this week’s news, a reminder that enrollment is now open for 2021 individual/family health insurance in every state except Idaho – but Idaho’s enrollment period will start on Monday. Uninsured people have another opportunity to sign up for coverage, and in most states, people who already have coverage can use this window as an opportunity to switch to a different plan if it would better meet their needs.
The Biden administration and the states that run their own exchanges are also pouring a great deal of money into marketing and outreach during this period, in an effort to reach the millions of uninsured Americans who don’t yet know about the coverage and financial assistance available to them via the marketplace or Medicaid. In most states, the enrollment window continues through May 15, but there are several states with different deadlines.
Bills under consideration in Maryland, California would connect unemployment applicants with health coverage
California S.B. 644, introduced last week, would help to connect unemployed California residents with health coverage resources, starting in July 2022. Under the terms of the legislation, the California Employment Development Department (EDD) would provide Covered California (the state-run exchange) with contact information for people who apply for programs administered by the EDD, including unemployment benefits, state disability, paid family leave, etc. Covered California would then reach out to these individuals, determine whether they’re eligible for Medi-Cal or premium subsidies, and help them get enrolled in coverage if they choose to do so.
In Maryland, a similar bill (H.B. 1002) would allow people seeking unemployment benefits to consent to having their contact information and other relevant information shared with Maryland Health Connection (the state-run exchange) and the Maryland Department of Health. These agencies could then determine whether the resident would be eligible for financial assistance with their health insurance, and help them enroll in coverage. Maryland already has an “easy enrollment” program that connects residents with the health insurance exchange via their tax returns; H.B.1002 would expand the outreach to include people dealing with the loss of a job.
DOJ asks Supreme Court to cancel hearing in Medicaid work requirement case
On Monday, the Department of Justice asked the Supreme Court to scrap the oral arguments that are scheduled to be heard next month in a case to determine the legality of Medicaid work requirements. The case focuses on the work requirements in Arkansas and New Hampshire, but it would have ramifications for work requirements that the Trump administration approved in several other states as well.
Work requirements are not currently in effect in any state, and would not be compatible with the current rules that allow states to receive additional COVID-related federal Medicaid funding, on the condition that enrollees’ coverage not be terminated during the pandemic emergency period. But some states, including Arkansas, hope to eventually reimpose a Medicaid work requirement.
The Biden administration notified states earlier this month that the Medicaid work requirements that were approved over the last few years are now being reconsidered. Arkansas, which had the previous administration’s support in the work requirement lawsuit, filed a brief asking the Supreme Court to ignore the Department of Justice’s request and continue with the scheduled oral arguments next month. But Arkansas officials have also said that they will not seek reapproval for the work requirement when the current waiver expires at the end of this year, and are instead considering a work incentive program that would provide private coverage to people who participate in the program, and traditional Medicaid to those who don’t.
Virginia lawmakers head to conference committee over reinsurance funding
Virginia lawmakers have been working on a bill to create a reinsurance program in the state. But as has been the case in some other states that have considered reinsurance programs, there’s disagreement over how to cover the state’s portion of the funding.
The measure passed by Virginia’s House of Delegates earlier this month called for an assessment on individual/family and large group health plans in the state (but not small-group plans), set at 1% of the prior year’s premium revenue. But the Senate has proposed funding the state’s share of the reinsurance program – estimated at $40 to $60 million – from general fund revenues, without the need for an assessment on health insurers.
The two chambers are taking the measure into a conference committee, and have until March 1 to come to an agreement. Assuming they do reach an agreement, the reinsurance program is slated to take effect in 2023 – but it’s possible that the conference committee could work out an arrangement that allows it to take effect in 2022 instead. (Most other states that have established reinsurance programs have had them up and running by the plan year immediately following the enactment of legislation to start the program.)
Iowa, Kentucky Houses approve bills limiting insulin cost-sharing; other states consider similar bills
Yesterday, Kentucky’s House of Representatives voted unanimously to pass H.B. 95, which would require state-regulated health plans to cap cost-sharing for insulin at $30/month, starting in 2022. The measure now heads to Kentucky’s Senate for further consideration. A similar bill – but with a cost-sharing limit of $100/month – passed in Iowa’s House of Representatives earlier this month.
A bill that would cap insulin cost-sharing at $50/month was introduced in California’s Senate last week. And although Illinois was one of the states that enacted legislation last year to cap insulin cost-sharing at $100/month, a new bill was introduced in the Illinois House last week that would lower that cap to $30/month. West Virginia also enacted a $100/month cap last year, but a new bill was introduced this month in West Virginia’s Senate that would lower the cap to $25/month.
In 2019, Colorado became the first state to enact legislation to limit cost-sharing for insulin. Several other states enacted similar legislation last year, and several more had already begun considering bills to limit cost-sharing for insulin earlier this year.
South Dakota becomes fifth state to allow non-insurance Farm Bureau health plans
South Dakota Gov. Kristi Noem signed a bill last week that will allow the South Dakota Farm Bureau to offer health plans that will not be considered health insurance, and that will be specifically exempt from state and federal insurance laws and regulations. Tennessee, Kansas, Iowa, and Indiana already allow this type of plan to be sold.
South Dakota Farm Bureau noted that its plans to partner with a third-party administrator to offer the new plans. SDFB does intend to cover the Affordable Care Act’s essential health benefits, but it’s expected that that plan will use medical underwriting as a mechanism to keep costs down.
Oscar Health to become publicly traded company, with 31 million shares for sale next week
Oscar Health has filed to become a publicly traded company, with stock sales expected to begin next week. Oscar plans to offer 31 million shares, priced at $32 – $34 per share, potentially raising a billion dollars in the initial public offering. Shares will trade on the NY Stock Exchange under the ticker symbol OSCR.
Oscar offers health plans in 18 states this year. They have more than half a million members, most of whom are enrolled in individual/family plans obtained via the health insurance marketplaces. Although most insurers in the individual market struggled with losses in the early years of ACA implementation, many of them have since become profitable. But Oscar’s losses have continued to mount, despite steady expansion into new states and expansion into the Medicare Advantage market last year.
Senate committee hearings focus on HHS Secretary nominee Xavier Becerra
The Senate Health Committee held a hearing yesterday with California Attorney General Xavier Becerra, President Biden’s nominee to lead the Department of Health and Human Services. Another hearing takes place today, with the Senate Committee on Finance. The committees will then make a recommendation to the rest of the Senate, and the nomination will be sent to the full Senate for debate and a confirmation vote. If Becerra is confirmed, he would be the first Latino Secretary of Health and Human Services.
Becerra was previously in the U.S. House of Representatives from 1993 to 2017. He voted for the Affordable Care Act in 2009/10 and then voted to protect it numerous times over the ensuing years. Becerra became California’s Attorney General in 2017, taking over from Kamala Harris when she was elected to the Senate. He led numerous legal battles against the Trump administration, and some Senate Republicans have expressed opposition to his nomination.
Democrats and the White House have expressed confidence that Becerra will be confirmed. With the 50-50 split in the Senate, Becerra could be confirmed on a party-line vote, with Vice President Kamala Harris casting the tie-breaking vote. But moderate West Virginia Democrat Joe Manchin has indicated that he’s undecided on Becerra’s nomination. There are, however, moderate Republicans who may support Becerra’s confirmation.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
The post The Scoop: health insurance news – February 24, 2021 appeared first on healthinsurance.org.
The Scoop: health insurance news – February 17, 2021
In this edition
COVID-related enrollment window starts in most states
Although open enrollment ended two months ago in most of the country, a new one-time enrollment opportunity is available for 2021 coverage. Uninsured Americans nationwide have access to this enrollment window, and in most states, it can also be used by people who want to pick a different plan or switch from off-exchange to on-exchange coverage.
This enrollment window – a response to the ongoing COVID emergency – is now underway nationwide, with the exception of Idaho, which announced on Monday that a special enrollment period would begin March 1. In almost every state, the enrollment period continues through May 15, although there are seven state-run exchanges that have – for now – different end dates:
If you’re not yet enrolled in health coverage for 2021, or if you’re enrolled in something like a short-term plan, Farm Bureau plan, or health care sharing ministry plan, this enrollment window – which does not require a qualifying event – is an opportunity to secure real health insurance coverage for the rest of the year.
And keep an eye on the COVID relief legislation that Congress is considering. It could end up providing enrollees with much larger and more widely available premium subsidies, making it particularly important that people get enrolled in on-exchange coverage before the end of this enrollment window.
CMS notifies states that Medicaid work requirements are being reconsidered
Last week, the Biden administration began notifying states with approved Medicaid work requirements that CMS is considering withdrawing the approval for these programs. The letters were sent to Arizona, Arkansas, Georgia, Indiana, Nebraska, New Hampshire, Ohio, South Carolina, Utah, and Wisconsin, and clarify that CMS “has preliminarily determined that allowing work and other community engagement requirements to take effect … would not promote the objectives of the Medicaid program.”
There are currently no Medicaid work requirements in effect. Some have been overturned by the courts, some have been postponed voluntarily by the states, and others have been suspended or postponed due to the COVID pandemic and the ban on coverage terminations that states are required to adhere to in order to receive enhanced federal Medicaid funding during the pandemic. The Supreme Court will hear oral arguments next month in Arkansas v. Gresham, to determine whether the Trump administration’s approval of a Medicaid work requirement in Arkansas was lawful.
CMS also sent a letter (see Michigan’s here) last week to states that currently operate 1115 waivers, rescinding a previous letter that former CMS Administrator Seema Verma sent to states in early January. Verma’s letter had stated that if CMS were to terminate or withdraw approval for part or all of a state’s 1115 waiver, there would be a nine-month delay before the changes took effect.
South Dakota legislature passes bill to allow sale of Farm Bureau plans
Last week, we told you about a bill in South Dakota that would allow the state to join Tennessee, Kansas, Iowa, and Indiana in allowing Farm Bureau (or other agricultural organizations domiciled in the state for at least 25 years) to sell medically underwritten health plans that would specifically not be considered health insurance and thus would be exempt from insurance laws and regulations, including state laws as well as the Affordable Care Act’s rules.
The bill had already passed the Senate at that point, and has since passed in the South Dakota House as well. It’s now under consideration by GOP Gov. Kristi Noem, who consistently voted against the Affordable Care Act during her time in Congress.
There are other states where Farm Bureau partners with health insurers to offer ACA-compliant health insurance (Michigan is an example), and the Nebraska Farm Bureau partners with Medica to offer guaranteed-issue short-term health insurance during a limited annual enrollment period. But these approaches are not the same as allowing an agricultural organization to offer products that are specifically not considered health insurance.
Kansas Senate legislation would allow short-term health plans in Kansas to follow federal rules
Kansas is one of the states where the rules for short-term health plans are more restrictive than the current federal rules. But S.B. 199, introduced last week in the Kansas Senate, would change that. Kansas currently limits short-term health plans to a single renewal, which means their total duration cannot exceed 24 months. S.B. 199 would allow short-term health plans in Kansas to have total durations of up to 36 months – in line with current federal rules. The Biden administration may roll back the Trump-era rules for short-term plans, however, which would eventually make more relaxed state rules moot.
Aetna plans to rejoin exchanges for 2022
CVS Health/Aetna plans to offer health coverage in at least some health insurance exchanges during the open enrollment period that starts this November, although the insurer has not yet provided details in terms of where it will participate. Aetna had previously offered coverage in some exchanges, but had exited all of them by the end of 2017, and has not participated since. CVS/Aetna opting back into the exchanges would continue the trend that has been ongoing in 2019, 2020, and 2021, with insurers joining or rejoining the exchanges, after numerous insurers – including Aetna – left the exchanges in 2017 and 2018.
Aetna’s previous exit from the health insurance exchanges happened before the company was acquired by CVS. But the exit was controversial, and linked to the Department of Justice’s decision to block a merger between Humana and Aetna. Here’s what David Anderson wrote about this in 2016, and Charles Gaba has put together a timeline of Aetna’s 2016 decision-making process.
Washington state Senate committee approves legislation to ensure coverage of gender-affirming healthcare
Washington state lawmakers are considering S.B. 5313, which would require state-regulated health plans to provide non-discriminatory coverage for medically necessary gender-affirming care. Insurers would not, for example, be able to deny coverage for services needed by transgender members, such as facial feminization, breast reductions, breast implants, etc. by classifying them as cosmetic procedures.
The bill was overwhelmingly approved last week by the Washington Senate’s Committee on Health and Long Term Care.
Rhode Island legislation would create commission to consider single-payer health program
Legislation was introduced in Rhode Island last week that calls for the creation of a special legislative committee tasked with “a comprehensive study to determine the pros and cons of implementing a single-payer (health coverage) program in Rhode Island.” The legislation notes that an “improved Medicare-for-all type single-payer program” would be in the state’s best interest. There are not currently any states that have single-payer health coverage systems, although there are others that are considering similar studies.
Medicaid buy-in legislation introduced in West Virginia
Legislation has been introduced in several states this year that would create Medicaid buy-in programs. With the introduction of H.B. 2241, West Virginia is the latest state where lawmakers are considering this possibility. The idea is to create a public option program by allowing residents – who would not otherwise be eligible for Medicaid – to purchase Medicaid coverage as an alternative to purchasing private health insurance. There are not yet any states where Medicaid buy-in programs have been enacted; Nevada has come the closest, but the Medicaid buy-in legislation that lawmakers passed in 2017 was vetoed by Nevada’s governor.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
The post The Scoop: health insurance news – February 17, 2021 appeared first on healthinsurance.org.
The Scoop: health insurance news – February 10, 2021
In this edition
COVID-related enrollment window starts Monday in most states
In every state except Connecticut, Idaho, and Vermont, a COVID-related enrollment window will be open by next week. (In a few states, they’re already open.) During these enrollment windows, consumers can sign up for ACA-compliant health coverage without a qualifying event.
In most states, the enrollment window applies to anyone eligible to use the marketplace, including people who are already enrolled and want to make a plan change. But some of the state-run exchanges are limiting eligibility to only people who are currently uninsured, or to people who aren’t already enrolled through the exchange. And some states are extending the COVID-related enrollment window to off-exchange plans as well, although financial assistance is never available outside the exchange.
If you’re uninsured or know someone who is, this is an opportunity to have coverage in place for the rest of 2021, with an effective date as early as March 1. Millions of uninsured Americans are eligible for premium subsidies substantial enough to cover the full cost of at least some plans in the marketplace. And Congress is considering COVID relief measures (described below) that would make coverage even more affordable.
House committees propose health insurance provisions as part of COVID package
The House Ways and Means Committee unveiled a set of nine COVID relief proposals this week. Subtitle G, related to “promoting economic security,” includes several important health insurance provisions:
The House Energy and Commerce Committee also published its proposed COVID relief measures this week, including a provision that would provide additional financial incentives for the states to expand Medicaid eligibility if they haven’t already. There are still a dozen states that haven’t expanded Medicaid.
Under current rules, if and when they expand eligibility, the federal government will cover 90 percent of the cost for the newly eligible population, and will continue to fund the rest of the state’s Medicaid program at the state’s normal matching rate (varies from 50 percent to about 76 percent, depending on the state). But under the committee’s legislative proposal relating to Medicaid, states that newly expand Medicaid would get an additional 5 percent federal funding match for their whole Medicaid program, for the first two years of Medicaid expansion.
The committees will markup these proposals this week, and a floor vote in the House on the final COVID relief legislation is planned for later this month.
Virginia House bill would implement reinsurance program in 2023
Legislation was introduced in Virginia last month to create a reinsurance program in the state. Last week, the Virginia House of Delegates passed the bill by a wide margin, and a Virginia Senate committee unanimously agreed to consider the bill during a special session that starts today.
If it’s passed and signed into law, the legislation calls for the state to submit a 1332 waiver proposal to the federal government by January 2022, and for the reinsurance program to be implemented by January 2023. (This is a fairly long timeline. We’ve seen several states implement reinsurance programs over the last few years, often with the program in place for the plan year immediately following the passage of the legislation that authorized it.)
Montana House passes bill to prohibit abortion coverage for exchange plans
Last week, we told you about a bill in Montana’s House that would prohibit on-exchange health plans in Montana from covering abortion services. On Friday, the bill passed in the House by a wide margin, and mostly along party lines. (Four Democrats voted yes, while one Republican voted no.) It’s now with the Montana Senate’s Judiciary Committee for further review. Montana is currently among the minority of states where abortion coverage can be provided under on-exchange plans and at least some plans do offer this coverage.
South Dakota Senate passes legislation to allow non-insurance Farm Bureau health plans
South Dakota’s Senate passed S.B.87 last week, which would allow a nonprofit agricultural organization, domiciled in the state for at least 25 years, to offer non-insurance health benefits to its members. The legislation, which was proposed by South Dakota Farm Bureau, would specifically exempt such health plans from insurance laws or oversight. Tennessee, Kansas, Iowa, and Indiana already allow Farm Bureau health plans to be sold with similar rules. (The plans are not considered health insurance and are thus not subject to insurance laws or regulations.)
The bill is now with the South Dakota House of Representatives, where the Agriculture and Natural Resources Committee approved it 11-1 this week, sending it to a vote on the House floor. The American Cancer Society has expressed strong opposition to the bill, noting that the proposed non-insurance health plans “have the potential of segmenting the insurance market, driving up premiums and making it harder for South Dakotans who live with serious or chronic disease to find health insurance.”
State lawmakers introduce Medicaid buy-in legislation
The concept of Medicaid buy-in as a way of establishing a public option has been debated for several years. Nevada lawmakers passed a Medicaid buy-in bill in 2017, but it was vetoed by the governor. Similar legislation was considered in New Mexico in 2019, but did not pass. (United States of Care has an extensive list of the actions that various states considered in 2019 related to Medicaid buy-in programs.)
This year, lawmakers in several states have introduced various forms of Medicaid buy-in legislation:
Biden administration puts Trump-era association health plan rule appeal on hold
In 2018, the Trump administration relaxed the rules for association health plans (AHPS), allowing self-insured people to join AHPs, as well as small groups that share only a common geographical location. The rules would also have allowed for the creation of these associations for the sole purpose of offering health insurance, without any other business purpose. These rules were soon challenged in court, and vacated by a judge in 2019. The Trump administration appealed the decision, and oral arguments in the appeal were heard by the D.C. Circuit Court in November 2019.
But a ruling had not yet been handed down by the time the Biden administration took office, and the new administration soon asked the court to stay the appeal. The court granted that request this week, so the appeal is on hold while the new leadership at the Department of Labor reviews the case, with status reports due every two months.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
The post The Scoop: health insurance news – February 10, 2021 appeared first on healthinsurance.org.
The Scoop: health insurance news – February 3, 2021
In this edition
Special enrollment periods underway (or soon to be underway) in most states
An executive order signed by President Biden has authorized a COVID-related special enrollment period on HealthCare.gov. The SEP will run from February 15 to May 15.
Last week, the Biden administration announced a special enrollment period for HealthCare.gov, which will run from February 15 to May 15. This window will allow anyone eligible to use the marketplace to enroll or make a plan change, without needing a qualifying event.
The SEP applies in the 36 states that use HealthCare.gov, but 12 of the other 15 state-run exchanges have also announced similar enrollment windows — some of which are already underway:
These state-run exchanges are taking a mixed approach to this enrollment window, with some allowing anyone to enroll, and others limiting it to only people who are currently uninsured. There are only three other states that run their own exchange platforms but have not yet announced COVID-related special enrollment periods: Connecticut, Idaho, and Vermont.
House, Senate legislation would make ACA premium subsidies more generous
Democrats in Congress have long been considering various proposals to enhance the ACA’s premium subsidies and make more robust coverage more affordable. Last month, Rep. Lauren Underwood (D-Ill.) introduced the Health Care Affordability Act (H.R. 369) and Sen. Mark Warner (D-Va.) introduced the Health Care Improvement Act of 2021. Both bills include the basic health care provisions that President Biden has proposed as part of his American Recovery Plan.
One of the most important aspects of these pieces of legislation is a fundamental change in the formula for calculating premium subsidies. Under these bills, the subsidies would become more generous, allowing more Americans to purchase coverage with minimal or zero premiums, and capping premiums at no more than 8.5 percent of income, regardless of a household’s income. At ACA Signups, Charles Gaba has created graphics that will help you visualize after-subsidy premiums as a percentage of income under the status quo versus H.R. 369, as well as a previous piece of federal legislation and California’s state-based subsidy system.
Maryland legislation would create young-adult subsidy pilot program
A bill (H.B. 780) introduced last week in Maryland calls for the state to create a pilot program that would provide state-funded premium subsidies to young adults with fairly low incomes. The legislation calls for the state to use $10,000,000 per year in 2022 and 2023 to provide additional premium assistance to people between the ages of 18 and 41, with incomes between 133 percent and 140 percent of the poverty level.
The ACA already provides federal premium subsidies for people at this income level, but the subsidies aren’t as strong for young people as they are for older enrollees. The pilot program would be designed to make net premiums more affordable and boost enrollment for this demographic.
Minnesota legislation calls for transition to HealthCare.gov
Minnesota H.F. 536 – introduced on Monday – calls for the state to transition away from MNsure as of 2022 and start utilizing HealthCare.gov instead. The measure is not likely to pass in the Minnesota House, given the Democratic majority in that chamber and the lawmakers’ general support for MNsure.
In 2017, former Gov. Mark Dayton vetoed a bill that would have transitioned the state to HealthCare.gov, and MNsure has continued to be a successful state-run exchange ever since.
Over the first few years the exchanges were in operation, several states shifted from their own enrollment platforms to HealthCare.gov (although Idaho took the opposite approach, switching from HealthCare.gov to their own platform as of the 2015 plan year). But the opposite trend has been ongoing for the last couple of years, with Nevada, Pennsylvania, and New Jersey all switching away from HealthCare.gov and operating their own exchange platforms, and other states planning to follow suit over the next few years. (You can see a full timeline of all the changes here.)
Minnesota bill would require more robust coverage of outpatient mental health treatment
Minnesota H.F. 415 and S.F. 377 – both introduced last week – would require major medical plans regulated by the state of Minnesota (ie, individual and fully-insured group plans, but not self-insured group plans) to cover a member’s first four outpatient mental health visits each year with cost-sharing that doesn’t exceed $25 per visit.
There’s no mention of an exclusion for HSA-qualified high-deductible health plans (HDHP), but that would need to be added to the legislation in order to allow HSA-compliant plans to continue to be available in Minnesota. IRS rules do not allow HDHPs to pay for services like mental health care until the member has met their deductible.
Washington legislation would create state-based premium subsidies
Washington state’s Cascade Care program, including standardized plans and public option plans, is underway this year. But part of the original 2019 Cascade Care legislation called for the state to develop a plan to provide state-based premium subsidies to people earning up to 500 percent of the poverty level.
Legislation to get the ball rolling on that did not advance in last year’s session, but a new bill was introduced last week with a similar intent. S.B. 5377 calls for the state to provide premium subsidies to people with income up to 500 percent of the poverty level (and possibly a cost-sharing assistance program), as long as they’re enrolled in the lowest-cost Bronze, Silver, or Gold standardized plan available in their area. Washington’s exchange conducted a detailed analysis of various approaches to state-based premium subsidy programs last year; their report includes a recommendation that the state-funded premium subsidies be provided as a fixed-dollar amount.
S.B. 5377 also addresses some aspects of the state’s existing public option program, including participation requirements for hospitals and surgical facilities, as well as a reduction in the reimbursement rate for hospitals (currently set at 160 percent of Medicare rates, but it would decline to 135 percent of Medicare rates under S.B. 5377, leading to lower premiums for enrollees).
Mississippi and Kentucky consider extending postpartum Medicaid coverage
Mississippi lawmakers are considering S.B. 2799, which would make a variety of changes to the state’s Medicaid program, including an extension of postpartum Medicaid coverage. Under current rules, a woman in Mississippi who qualifies for Medicaid due to pregnancy is eligible for 60 days of postpartum Medicaid coverage after the baby is born, but S.B. 2799 would extend that to 12 months (during the COVID pandemic, postpartum Medicaid coverage does not terminate after 60 days, due to the current rules that prevent states from terminating Medicaid coverage for any enrollees unless they move out of the state or request a coverage termination). Medicaid covers nearly two-thirds of all births in Mississippi — the highest proportion in the nation.
The Kentucky House Democratic Women’s Caucus has created a plan they’re calling the Kentucky Maternal and Infant Health Project, comprised of 21 proposed bills that would address a wide range of issues. Among them is a measure that would extend postpartum Medicaid coverage from 60 days to 12 months. The proposal also calls for pregnancy to be considered a qualifying event, which is currently only the case in New York, Connecticut, and DC.
Montana legislative committee advances bill to prohibit abortion coverage for on-exchange plans
Last week we told you about legislation in Arizona, Texas, and Virginia that would remove state rules that prohibit abortion coverage on health plans that are sold in the exchange/marketplace in those states. Montana lawmakers are considering the opposite approach, however, with H.B. 229. The bill, which was approved by the House Judiciary Committee last week, would prohibit abortion coverage on plans sold in the Montana exchange. The only exception would be in cases where the mother’s life is in danger.
Montana is currently one of a minority of states where there is no ban on abortion coverage for on-exchange plans, and at least one insurer does offer plans that include abortion coverage.
More states consider bills that would cap out-of-pocket costs for insulin
Last year, several states enacted legislation to cap consumers’ out-of-pocket costs for insulin. Other states are considering similar bills this year, including Montana ($35/month cap), Tennessee ($100/month cap), New Jersey ($50/month cap), and New York ($30/month cap; New York already passed a bill last year that limits out-of-pocket costs for insulin, but the cap is $100. The new legislation would reduce that to $30 instead).
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
The post The Scoop: health insurance news – February 3, 2021 appeared first on healthinsurance.org.
Biden administration announces COVID-related special enrollment period
Today, President Biden signed two highly anticipated executive orders related to healthcare. The first is aimed at strengthening Medicaid and the Affordable Care Act, and directs HHS to consider creating a COVID-related special enrollment period (SEP) on HealthCare.gov. The Biden administration has also committed $50 million to outreach and education, in order to make people aware of the enrollment opportunity and the extensive financial assistance that’s available to help offset the cost of coverage and care.
State officials, insurers, and consumer advocates had repeatedly asked the Trump administration for a COVID-related special enrollment period in 2020, but to no avail. (Almost all of the state-run exchanges did open COVID-related SEPs in 2020.)
When will the HealthCare.gov special enrollment period start?
The special enrollment period runs from February 15 to August 15, giving people six months in which to pick a health plan, even if they don’t otherwise have a qualifying event (edit: this is an extension; the window was initially slated to end May 15, 2021, but was subsequently extended to August 15).
Who can use the COVID special enrollment period on HealthCare.gov?
Anyone who is eligible to use the marketplace can enroll during this special enrollment period. This includes people who are uninsured, under-insured, or already enrolled in a plan through the marketplace and wanting to switch to a different plan.
Previously, it was expected that this new special enrollment window would be aimed at Americans who are uninsured, much like the COVID-related special enrollment periods that had already been announced in the District of Columbia, Maryland, Massachusetts, and New York (the SEP in Massachusetts also applies to people who have COBRA and would prefer to drop it and switch to a plan offered through the marketplace). But when CMS published the details of the SEP, it was clear that they wanted to cast a wide net, making the special enrollment period available for those who are without coverage, but also for current marketplace enrollees.
They’ve clarified that “current enrollees will be able to change to any available plan in their area without restriction to the same level of coverage as their current plan.” They also note that “consumers won’t need to provide any documentation of a qualifying event (e.g., loss of a job or birth of a child), which is typically required for SEP eligibility.”
So regardless of whether you’ve got no coverage at all, are already enrolled in a plan through HealthCare.gov, or have coverage under something like a short-term health plan, Farm Bureau non-insurance plan, fixed indemnity plan, healthcare sharing ministry plan, direct primary care plan, or other similar types of coverage, you’ll be able to use HealthCare.gov to sign up for coverage during this window.
Are state-run marketplaces also offering a special enrollment period for uninsured residents?
HealthCare.gov is used in 36 states, and the COVID SEP applies in all of them. But all of the state-run exchanges have followed suit (in addition to DC, Massachusetts, Maryland, and New York, which had already announced COVID-related special enrollment periods). Here’s a summary of the COVID-related special enrollment periods in states that run their own exchanges (note that this list has been updated over time, as more state-run exchanges announce special enrollment periods):
Some of these enrollment windows apply only to uninsured residents, while others apply to anyone eligible to use the marketplace, including people who already have coverage and want to switch to a new plan.
Last month, insurance commissioners from 11 states sent a letter to President Biden, encouraging him to take various actions to improve access to health coverage and care. Opening a special enrollment period was among their recommendations, along with “restoring outreach funding, restoring flexibility on eligibility rules like failure to reconcile, and immediately revoking public charge rules.”
The insurance commissioners who wrote the letter – some whom represent states that run their own exchanges – further noted that
“many of our states run our own state-based marketplaces and we would like to work with you to ensure that any effort to encourage marketplace enrollment is truly national and therefore inclusive of state-based marketplaces, in addition to HealthCare.gov. We ask you, as soon as possible, to coordinate with state-based marketplaces on the timing of any SEP, the messaging you intend to use, and key strategies you will employ to reach the uninsured so that we can align our plans with yours.”
And the CMS press release notes that the administration “strongly encourages states operating their own Marketplace platforms to make a similar enrollment opportunity available to consumers in their states.” As of early February, only three state-run exchanges had not announced COVID-related special enrollment periods (edit: all three had announced COVID-related enrollment periods by mid-February; there are COVID-related enrollment periods nationwide, although the rules and deadlines vary a bit in some states).
How can I get coverage after the COVID-related enrollment period ends?
If you’re uninsured and don’t enroll during the COVID-related enrollment period in your state, your options for getting coverage for the remainder of 2021 will be limited.
But you likely do still have at least some options, as outlined here. If you’re eligible for Medicaid or CHIP, enrollment continues year-round, with coverage that can take effect immediately or even retroactively. Otherwise, you may have to consider a plan that’s not regulated by the Affordable Care Act, such as a short-term plan or health care sharing ministry, to tide you over until you can enroll in a plan through the marketplace.
What else will the executive orders do?
The special enrollment period for uninsured Americans is generating headlines and will be available in just a couple of weeks. But the executive order is expected to direct federal agencies to consider a variety of other reforms, which could have far more significant impact.
Among the most likely are
The second executive order is aimed at protecting women’s health in America and around the world, including ensuring access to all necessary reproductive health care. It rescinded the global gag rule (Mexico City Policy), which blocked U.S. funding for international non-profits that provide women with abortion counseling or referrals. The rule was first implemented in the 80s and has been rescinded and reinstated several times under different administrations.
The women’s health executive order also directs federal agencies to reconsider the Trump administration rule that eliminated federal funding for Planned Parenthood and other abortion providers.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
The post Biden administration announces COVID-related special enrollment period appeared first on healthinsurance.org.
Biden administration announces three-month special enrollment period
This morning, the White House announced that today, President Biden will sign two highly anticipated executive orders related to healthcare. The first is aimed at strengthening Medicaid and the Affordable Care Act, and will include a provision to create a COVID-related special enrollment period (SEP) on HealthCare.gov, for Americans who don’t currently have health coverage. State officials, insurers, and consumer advocates repeatedly asked the Trump administration for a COVID-related special enrollment period in 2020, but to no avail. (Almost all of the state-run exchanges did open COVID-related SEPs in 2020.)
When will the HealthCare.gov special enrollment period start?
The special enrollment period will run from February 15 to May 15, giving uninsured Americans three months in which to pick a health plan, even if they don’t otherwise have a qualifying event.
Who can use the COVID special enrollment period on HealthCare.gov?
This window is expected to be aimed at Americans who are uninsured, much like the COVID-related special enrollment periods that had already been announced in Maryland, Massachusetts, and New York. But the COVID-related SEP in Massachusetts also applies to people who have COBRA and would prefer to drop it and switch to a plan offered through the marketplace – it’s possible that the SEP on HealthCare.gov could be extended to populations like that as well.
Americans are technically considered uninsured if they have coverage under short-term health plans, Farm Bureau non-insurance plans, fixed indemnity plans, healthcare sharing ministry plans, direct primary care plans, and other similar types of coverage, since none of those are considered minimum essential coverage. So people with these types of coverage will be able to use the COVID special enrollment period on HealthCare.gov. And again, it’s also possible that this window could be extended to other groups as well, including those who have COBRA or state continuation coverage after a recent job loss.
Will state-run marketplaces also offer a special enrollment period for uninsured residents?
HealthCare.gov is used in 36 states, and the COVID SEP will apply in all of them. But it’s also likely that many of the state-run exchanges – in addition to Massachusetts, Maryland, and New York – could follow suit. Colorado’s exchange announced today that they’ll open a special enrollment period for uninsured residents, which will run from February 8 through May 15, and Washington’s exchange announced a special enrollment period, with the same dates that HealthCare.gov will use, for “anyone seeking health insurance coverage.”
Last month, insurance commissioners from 11 states sent a letter to President Biden, encouraging him to take various actions to improve access to health coverage and care. Opening a special enrollment period was among their recommendations, along with “restoring outreach funding, restoring flexibility on eligibility rules like failure to reconcile, and immediately revoking public charge rules.”
The insurance commissioners who wrote the letter – six of whom represent states that run their own exchanges (California, Colorado, Minnesota, Pennsylvania, Rhode Island, and Washington) – further noted that
“many of our states run our own state-based marketplaces and we would like to work with you to ensure that any effort to encourage marketplace enrollment is truly national and therefore inclusive of state-based marketplaces, in addition to HealthCare.gov. We ask you, as soon as possible, to coordinate with state-based marketplaces on the timing of any SEP, the messaging you intend to use, and key strategies you will employ to reach the uninsured so that we can align our plans with yours.”
So it’s quite likely that many of the remaining state-based marketplaces will open COVID-related SEPs this spring, allowing uninsured residents another opportunity to sign up for health coverage.
How can I get coverage between now and February 15?
If you’re uninsured and not in one of the states where open enrollment for 2021 plans is ongoing until the end of January, your options for getting coverage before the new special enrollment period will be limited.
But you likely do still have at least some options, as outlined here. If you’re eligible for Medicaid or CHIP, enrollment continues year-round, with coverage that can take effect immediately or even retroactively. Otherwise, you may have to consider a plan that’s not regulated by the Affordable Care Act, such as a short-term plan or health care sharing ministry, to tide you over until you can enroll in a plan through the marketplace.
What else will the executive orders do?
The special enrollment period for uninsured Americans is generating headlines and will be available in just a couple of weeks. But the executive order is expected to direct federal agencies to consider a variety of other reforms, which could have far more significant impact.
Among the most likely are
The second executive order will be aimed at protecting women’s health in America and around the world, including ensuring access to all necessary reproductive health care. It’s expected to rescind the global gag rule (Mexico City Policy), which blocks U.S. funding for international non-profits that provide women with abortion counseling or referrals. The rule was first implemented in the 80s and has been rescinded and reinstated several times under different administrations.
It’s also expected that the women’s health executive order will direct federal agencies to reconsider the Trump administration rule that eliminated federal funding for Planned Parenthood and other abortion providers.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
The post Biden administration announces three-month special enrollment period appeared first on healthinsurance.org.
The Scoop: health insurance news – January 27, 2021
In this edition
Open enrollment ends Sunday in California, New York, New Jersey, and Washington, DC
Open enrollment for 2021 individual/family health plans ended weeks ago in most of the country, but it’s still ongoing in California, New Jersey, New York, and the District of Columbia. In all four areas, however, open enrollment ends this Sunday, January 31. After that, people in those areas will need a qualifying event in order to enroll, although New York’s COVID-related special enrollment period (details below) will still allow people who don’t have health insurance at all to enroll in coverage for another two months.
Maryland, Massachusetts, New York announce COVID-related SEPs for uninsured residents
Although open enrollment has already ended in Maryland and Massachusetts, and will end in New York on Sunday, all three states have announced COVID-related special enrollment periods for uninsured residents, with the following deadlines:
It’s widely anticipated that the Biden administration will open a COVID-related special enrollment period via HealthCare.gov, with an executive order that’s expected to be signed tomorrow. Other state-run exchanges might then follow suit. In a recent letter to President Biden, several of them indicated they would like to coordinate with the federal government on this so as to create a unified national approach to reaching the remaining uninsured population. As Dave Anderson notes, an enrollment period at this time of the year might be easier for uninsured people to manage than the regular annual open enrollment period in the fall.
Legislation introduced in Arizona and Texas would remove ban on abortion coverage for qualified health plans; similar bill passed in Virginia
State legislators introduced SB1346 in Arizona’s Senate this week, calling for the removal of the state’s existing ban on abortion coverage for qualified health plans. Similar bills were introduced in Texas (SB448 and HB1362), and the Texas bills would also ensure that the state Medicaid program covers abortion services.
Last week, the Virginia Senate passed a similar bill by a vote of 20-17. Its companion bill, HB1896, passed in the House of Delegates this week, and the measure has now been sent to Gov. Ralph Northam for his consideration.
Hawaii does not prohibit qualified health plans from including abortion coverage, but new legislation introduced in Hawaii’s Senate would codify a requirement that individual and group insurers cover a variety of preventive and reproductive health benefits. The list of services that would have to be covered under the legislation includes many that are already required under the ACA (just in case the ACA is overturned by the Supreme Court), but also includes abortion services.
Connecticut lawmakers introduce single-payer bill amid push for public option, reinstatement of health insurance tax
Democratic lawmakers in Connecticut’s House of Representatives have introduced legislation that would create a single-payer health coverage system in the state. It would include coverage for medical and prescription services as well as things like dental, vision, and long-term care, would be funded via taxes as opposed to premiums (plus pass-through funding from a 1332 waiver), and would have no cost-sharing (deductibles, copays, coinsurance).
That bill is a long shot; similar efforts in Vermont and Colorado failed over the last several years. But Connecticut is a state to watch this year in terms of health care reform legislation. Lawmakers have been pushing for a public option and are considering reinstating the health insurance tax that used to be assessed by the federal government, with the proceeds used to make health coverage more affordable. New Jersey used that approach and has used the revenue to create state-funded premium subsidies that are making coverage more affordable as of 2021.
Legislation introduced in Hawaii would continue progress toward single-payer system
More than a decade ago, Hawaii created the Hawaii Health Authority (HHA), tasked with developing a universal health coverage system for everyone on the Hawaiian Islands. But the HHA stalled when the Affordable Care Act came on the scene. With the COVID pandemic highlighting the cracks in the state’s current health coverage system (which is robust but highly linked to employment), advocates began pushing to revitalize the HHA and its mission.
Last week, Hawaii Representative Scott Saiki (D, District 26, and House Speaker) introduced legislation (HB192 and HB164) that would authorize and fund the HHA “to continue planning for the adoption of a universal, publicly-administered, healthcare-for-all insurance model with a single payout agency.”
Virginia lawmakers introduce legislation to create reinsurance program
Legislation was introduced last week in Virginia’s House of Delegates that calls for the state to create a reinsurance program and seek federal pass-through funding via a 1332 waiver. Fourteen states already have reinsurance programs – which tend to have fairly broad bipartisan support – and they are highly effective in terms of bringing down full-price premiums, making it easier for people who don’t get premium tax credits to afford individual health insurance. But lawmakers in some states have pushed back against reinsurance programs over the last few years, due to disagreements over how the state’s portion of the funding should be raised.
Legislation introduced in New York would require marketplace plans to cover acupuncture
Acupuncture is not currently a state-mandated benefit in New York, nor is it covered under the state’s benchmark plan, upon which individual and small group plans must be based (some health plans in New York’s marketplace do voluntarily provide acupuncture benefits). A bill was introduced last week in New York’s Assembly that would require health insurance plans sold in the New York marketplace/exchange to cover acupuncture. If enacted, it would apply to any health plans issued or renewed on or after 90 days from the date of enactment.
New Mexico lawmakers again consider Health Care Affordability Fund
Last year, New Mexico’s House passed legislation that would have created a state fee to replace the federal health insurance tax. The proceeds would have been directed to a new Health Care Affordability Fund, which would have been used to provide additional health insurance subsidies to New Mexico residents. The 2020 legislation did not advance in the Senate, so the measure died in last year’s legislative session.
But Gov. Michelle Lujan Grisham announced earlier this month that the Health Care Affordability Fund would be a legislative priority in 2021, and the legislation to get the ball rolling on this was introduced in New Mexico’s House of Representatives last week.
Florida, Mississippi, South Dakota voters may see Medicaid expansion ballot initiatives in 2022
Over the last few years, voters in six states have approved Medicaid expansion ballot measures. As a result, Medicaid expansion has already taken effect in Maine, Idaho, Utah, and Nebraska, and will take effect this summer in Missouri and Oklahoma.
Of the dozen states that have still refused to expand Medicaid, only Florida, Mississippi, and South Dakota have constitutions that will allow Medicaid expansion via a ballot initiative. And advocates in all three states are working to get Medicaid expansion measures on the 2022 ballots.
Signatures were previously gathered for a ballot measure in Florida, but that effort was derailed in 2019. Advocates are hoping to revive the same ballot measure and continue collecting signatures this year. South Dakota’s ballot initiative and constitutional amendment were approved for circulation last fall, and signatures must be turned in by early November 2021. Advocates in Mississippi do not yet have their ballot initiative language finalized, but are hoping to begin gathering signatures this spring. Two bills have also been introduced in Mississippi to expand Medicaid legislatively, but they’re a long shot given the general opposition in the GOP-led legislature.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
The post The Scoop: health insurance news – January 27, 2021 appeared first on healthinsurance.org.
The Scoop: health insurance news – January 20, 2021
In this edition
President Biden’s American Recovery Plan calls for additional premium subsidies and COBRA subsidies
Newly inaugurated President Joe Biden outlined his American Recovery Plan last week, and it includes some important provisions aimed at improving access to health coverage. The wide-ranging $1.9 trillion proposal, which would have to be approved by Congress, calls for premium tax credits to be increased “to lower or eliminate health insurance premiums” and to cap any enrollee’s after-subsidy premium at no more than 8.5 percent of their income. This second provision would primarily help people with income near or a little above 400 percent of the poverty level, and could make a substantial difference in the affordability of coverage for some households that currently have to pay full-price for their coverage — sometimes amounting to well over a quarter of their income.
The plan also calls for government subsidies of COBRA premiums through the end of September 2021. In 2009, the American Recovery and Reinvestment Act provided COBRA subsidies, which could serve as a model for how a new round of COBRA subsidies might work.
Biden’s American Recovery Plan encompasses far more than just health coverage. But if you’re curious about how health care reform might proceed under the new administration and the new Congress, check out this two-part series from Andrew Sprung, this piece from Charles Gaba, and this piece from Katie Keith.
Open enrollment ends Saturday in Massachusetts and Rhode Island
Open enrollment for 2021 health coverage is still ongoing in five states and Washington, DC (plus a COVID-related special enrollment period for uninsured residents in Maryland). But the enrollment window ends this Saturday, January 23, in Massachusetts and Rhode Island. After Saturday, residents in those states will need a qualifying event in order to enroll or make changes to their 2021 coverage.
As of this week, confirmed marketplace enrollment totals for 2021 coverage have surpassed 11.6 million nationwide.
Partial 2022 health insurance rules finalized by outgoing Trump administration
Last fall, the Trump administration published the proposed Notice of Benefit and Payment Parameters for 2022. This annual rulemaking document is wide-ranging and typically addresses a variety of issues related to the health insurance exchanges, special enrollment periods, risk adjustment, etc. At the time, we summarized several of the proposed rule changes that were most likely to directly affect people with individual market health plans.
Last week, the Trump administration announced that it was finalizing some aspects of the proposal — including the most controversial ones — but that the rest of the proposed rule changes would be finalized in an additional rule that will be issued “at a later date.” That will be under the Biden administration, which is also likely to delay the rule the Trump administration finalized last week (currently slated to take effect March 15) and reissue a new proposed rule, with a new comment period.
A total of 542 comments were submitted to CMS regarding the proposed rule changes for 2022. The comments that pertain to the rule changes that CMS finalized last week are summarized in the final rule, along with the responses from CMS. Notably:
Many of the proposed rule changes are still under consideration and were not finalized last week, including the premium adjustment percentage (which would affect maximum out-of-pocket amounts and the affordability threshold for catastrophic plan eligibility), special enrollment periods when employer COBRA subsidies cease or a person loses eligibility for premium subsidies, and a rule change that would permanently allow insurers to issue MLR rebates earlier in the year.
At Health Affairs, Katie Keith has an excellent in-depth analysis of the partial final rule.
Lawsuit filed to block Georgia’s plan to eliminate its health insurance exchange
Last fall, the Trump administration approved Georgia’s 1332 waiver proposal to transition away from HealthCare.gov and instead utilize a system that relies on brokers, agents, and insurers to get people enrolled, without a centralized exchange (the finalized rule change that allows a similar approach nationwide is very reminiscent of Georgia’s 1332 waiver).
Last week, Planned Parenthood Southeast and Feminist Women’s Health Center filed a lawsuit against HHS, CMS, the Department of the Treasury, and their respective leaders, alleging that the waiver was unlawfully approved and should be vacated. Democracy Forward, which is representing the plaintiffs in the case, explained that Georgia’s 1332 waiver “will do immense damage to Georgia’s health insurance market, force Georgians to shop for insurance through private brokers and insurance companies, lead more residents to enroll in junk plans, and increase premiums.”
Bills introduced in Virginia to eliminate state ban on abortion coverage under marketplace plans; study impact of mandating coverage for infertility
Virginia is one of 26 states where health insurance plans sold in the marketplace/exchange are not allowed to provide coverage for abortions. (Virginia’s ban includes exceptions for abortion coverage in cases of rape, incest, or the mother’s life being in danger.) Legislation was introduced last week in Virginia’s Senate that would eliminate this ban, allowing insurers to offer abortion coverage if they choose to do so.
Legislation has also been introduced in Virginia that would direct the Virginia Health Insurance Reform Commission to conduct a study on the impacts of requiring health insurance plans in the state to cover infertility treatment. There are currently 19 states that mandate at least some coverage for infertility treatment.
Legislation introduced in Maryland and Rhode Island to create universal healthcare commissions
Legislation was introduced in Maryland last week that calls for the state to create a Commission on Universal Health Care. The Commission would be tasked with developing a plan for the state to establish a single-payer universal coverage system by 2024.
Legislation was also introduced in Rhode Island last week that calls for the creation of a special legislative commission that would study how the state might go about implementing a single-payer Medicare-for-All type of health coverage program in Rhode Island.
Legislation introduced in Missouri to create a Medicaid work requirement
Missouri has not yet expanded Medicaid eligibility under the ACA, but that will change this summer, thanks to a ballot initiative that voters in the state passed last year. Legislation was introduced this month in Missouri’s Senate that calls for a Medicaid work requirement in the state, effective as of January 2022. Under the terms of the bill, non-exempt Medicaid enrollees would have to work (or participate in various other community engagement activities, including volunteering, school, job training, etc.) at least 80 hours per week in order to maintain eligibility for Medicaid.
The Trump administration approved numerous work requirement waivers over the last few years, but due to lawsuits and the COVID pandemic, none are currently in effect. And the Biden administration is very unlikely to approve any additional waivers, meaning that Missouri’s legislation is likely a non-starter for the time being, even if it’s enacted.
Uncompensated care funding in Florida and Texas extended through 2030
Last Friday, the Trump administration renewed 1115 waivers in Texas and Florida, both of which are now valid through mid-2030. These waivers are for Medicaid managed care, and also provide federal funding for uncompensated care – which is more of a problem in states like Texas and Florida, due to their failure to expand Medicaid and the resulting coverage gap for low-income residents.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
The post The Scoop: health insurance news – January 20, 2021 appeared first on healthinsurance.org.
Colorado health insurance
Colorado health insurance
This page is dedicated to helping consumers quickly find health insurance resources in the state of Colorado. Here, you’ll find information about the various types of health insurance coverage available in the state. You can find the basics of the Colorado health insurance marketplace/exchange (Connect for Health Colorado) and how open enrollment and special enrollment periods work for plans sold in the exchange; a brief overview of Medicaid expansion in Colorado; an explanation for why short-term health insurance is not available in the state; details about state-specific Medicare rules; as well as a collection of Colorado health insurance resources for residents.
Colorado has long been a leader in health reform
Colorado has long been a leader in terms of healthcare reform. Before the ACA implemented reform on a federal level, Colorado had already made maternity coverage mandatory in the individual market, and had banned gender-based premiums.
Colorado became the second state in the nation to actively pursue single-payer healthcare, with Amendment 69 appearing on the 2016 ballot. However, voters rejected the push for single-payer by a wide margin (Vermont was the first state to implement a plan to achieve single-payer, but they abandoned that path in December 2014).
Colorado implemented a reinsurance program as of 2020, joining a growing number of states that are using 1332 waivers to obtain federal pass-through funding for reinsurance to reduce unsubsidized health insurance premiums and stabilize the state individual market. Individual health insurance premiums in Colorado dropped by an average of 20 percent in 2020, thanks to the reinsurance program (although after-subsidy premiums increased for many people who receive premium subsidies). And overall average rates decreased again in 2021, by 1.4 percent.
Colorado regulators and lawmakers were working on a public option program that the state hoped to debut in the fall of 2021, for coverage effective in 2022, but the legislation to create it was abandoned amid the COVID-19 pandemic. Lawmakers plan to introduce a different version of it during the 2021 session.
Colorado’s uninsured rate dropped by nearly half from 14.1 percent in 2013, to 7.5 percent in 2018, although it grew to 8 percent in 2019. The Colorado Health Access Survey found an even lower uninsured rate — just 6.5 percent — which has stayed steady from 2017 through 2019.
Colorado’s health insurance marketplace
Colorado utilizes a state-run health insurance exchange — Connect for Health Colorado — which is one of just three exchanges in the nation with a permanently extended open enrollment period (November 1 to January 15).
The marketplace is used by individuals and families who need to purchase their own health coverage, as well as people who are eligible for income-based Medicaid or CHIP. People buy their own health insurance in a variety of situations, including being an early retiree, being self-employed, or being employed by a small business that doesn’t offer health benefits.
Colorado’s marketplace no longer offers small business health plans, but Kaiser still has exchange-certified small business plans for sale, which employers can purchase directly from Kaiser or with the help of a broker or agent.
Eight insurers participate in the Colorado health insurance marketplace as of 2021, and for 2021, three of the state’s insurance companies (Oscar, Cigna, and Rocky Mountain Health Plans) expanded their coverage areas. Insurer participation in Colorado is relatively robust compared with much of the country, but coverage tends to be localized and plan availability is concentrated in urban areas. In 10 of the state’s 64 counties, those who shop the state’s exchange have a single carrier option (Anthem Blue Cross/Blue Shield) in 2021 (but that’s down from 22 counties in 2020).
Average premiums in Colorado’s individual market dropped by 20 percent for 2020, but that was before any subsidies were applied. After subsidies, many enrollees saw higher monthly premium costs in 2020, due to lower benchmark plan premiums and the resulting decrease in premium subsidy amounts. For 2021, the eight insurers initially proposed an overall average rate increase of just over 2 percent, but once regulators finalized the rates, the changes for 2021 amounted to an average rate decrease of 1.4 percent.
Read our overview of the Colorado health insurance marketplace – including news updates and exchange history.
Colorado open enrollment period and dates
Colorado implemented rules to permanently extend its annual open enrollment period to 2.5 months (November 1 to January 15).
Open enrollment for 2021 medical insurance in Colorado ran from November 1, 2020 through January 15, 2020. This window was an opportunity for new enrollees to select coverage in the individual market (on-exchange or outside the exchange), and for existing enrollees to compare the available options for 2021 and renew or change their existing coverage. Enrollees should also provide updated financial information to the exchange during open enrollment, in order to have financial assistance eligibility based on accurate information for the coming year.
When there were still nine days remaining in open enrollment for 2021 coverage, Connect for Health Colorado announced that more than 172,000 people had enrolled in coverage. This was already a record high, and sign-ups continued to increase over the remaining days of the enrollment window. Enrollment the year before, for 2020 coverage, had reached nearly 167,000 people, although that was down from just over 170,000 enrollees in 2019.
To address the COVID-19 crisis, Colorado opened an emergency special enrollment period for uninsured residents. It ran through April 30, 2020, and 14,263 residents enrolled in coverage during that window.
Read more about the Colorado health insurance marketplace.
Learn more about how open enrollment works for individual market health insurance plans, both on-exchange and outside the exchange.
Grandmothered health insurance plans terminated
Colorado required all grandmothered (transitional) health insurance plans to terminate by the end of 2015. There are still grandfathered health insurance plans in Colorado, but all other individual and small-group plans are now ACA-compliant.
Medicaid expansion in Colorado
Colorado is among the 36 states and the District of Columbia that have expanded Medicaid eligibility under the Affordable Care Act. The ACA Medicaid expansion extends eligibility to most non-elderly adults at or below 138 percent of the federal poverty level.
As of mid-2020, total enrollment in Medicaid plans and CHIP plans in Colorado stood at nearly 1.4 million people, which was 77 percent higher than it had been in 2013.
Learn about Colorado’s Medicaid and Child Health Plan Plus (CHP+) programs at the Colorado Department of Health Care Policy & Financing website, and learn about Colorado’s Medicaid expansion in our overview.
Short-term health insurance in Colorado
As a result of strong new state regulations that took effect in 2019, there is no longer any short-term health insurance coverage available in Colorado. The state created a special enrollment period for people who had short-term health insurance in Colorado but who lost their coverage because their plan terminated and they were unable to purchase another short-term plan (because insurers no longer offer short-term coverage in Colorado).
Colorado legislators’ positions on the Affordable Care Act
In 2009, Colorado Sens. Mark Udall and Michael Bennet – both Democrats – voted yes on the Affordable Care Act. Colorado’s five Democratic House members also voted yes, while the other two representatives, both Republicans, voted no.
The current Colorado congressional delegation includes two Democratic Senators: Michael Bennett and John Hickenlooper, both of whom support the ACA. As of 2021, Colorado has seven representatives in the U.S. House: four Democrats, and three Republicans. Support for the ACA is split along party lines in the state’s House delegation.
At the state level, Colorado was one of the only states that moved in a bipartisan manner to establish a state-run health insurance marketplace. When John Hickenlooper was governor, he signed legislation authorizing the marketplace in 2011. The state marketplace is called Connect for Health Colorado. The state also adopted Medicaid expansion under the Affordable Care Act.
Colorado’s high-risk insurance pool
Before the ACA reformed the individual health insurance market, coverage was underwritten in nearly every state, including Colorado. People with pre-existing conditions were often unable to purchase coverage in the private market, or were only eligible for policies that excluded their pre-existing conditions or charged them premiums that were significantly higher than the base rate.
CoverColorado was created in 1991 to provide an alternative for people who were not able to get comprehensive coverage in the private market because of their medical history.
One of the primary reforms ushered in by the ACA was guaranteed issue coverage in the individual market. An applicant’s medical history is no longer a factor in eligibility, which means that high-risk pools are no longer necessary the way they once were. CoverColorado stopped enrolling new applicants at the end of 2013, and the program ceased altogether in March 2014.
Medicare coverage and enrollment in Colorado
By November 2020, there were 946,170 enrollees in Medicare in Colorado. About 56 percent of them were enrolled in Original Medicare, with the other 44 percent enrolled in Medicare Advantage plans instead.
Read more about Medicare in Colorado.
Read more about Medicare’s annual open enrollment period, which Medicare beneficiaries can use to compare available Part D and Medicare Advantage plans and renew or make a change to their coverage.
Colorado health insurance resources
Colorado health reform at the state level
Colorado enacted legislation in 2019 to create a reinsurance program, and to get the ball rolling on a public option in the state, as described above. The Colorado Health Institute has an excellent overview of some of the key pieces of legislation the state passed in 2019.
Legislation that would have created the public option was abandoned in 2020, however, as a result of the coronavirus pandemic.
See the bottom of this page for a summary of other recent state-level health reform legislation.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
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Short-term health insurance in Massachusetts
Short-term health plans in Massachusetts
Can consumers buy short-term health plans in Massachusetts?
Due to the fact that health plans in Massachusetts must follow the state’s rules, including “guaranteed-issue and rating restrictions,” short-term health insurance in Massachusetts is non-existent. As a result, there are no short-term health plans available for purchase in the state.
State regulators in Massachusetts, along with a coalition of Massachusetts health plans, urged the Trump Administration to retain states’ rights to regulate short-term plans even after the federal rules were relaxed. The Trump Administration’s rules for short-term plans, which took effect in 2018, are clear in noting that states may continue to impose tighter regulations than the new federal rules, and Massachusetts regulators made it clear that they intende to do so, noting that
Massachusetts’s short-term health insurance regulations
Since 1996, Massachusetts has required all health plans marketed to individuals to be sold on a guaranteed-issue basis (ie, applications cannot be rejected based on medical history) “according to clearly defined rating rules.”
Massachusetts has had its own state-based individual health insurance mandate since 2006, and traditional short-term health insurance would not count as having coverage for the purpose of fulfilling the mandate. Although there is no longer a penalty from the federal government for not having minimum essential coverage, the individual mandate penalty in Massachusetts is still in force, and is collected on state tax returns.
How can I get affordable health insurance in Massachusetts?
The Massachusetts health insurance marketplace is available to residents in need of health insurance coverage, and offers a large variety of coverage options with premium subsidies and cost-sharing subsidies available based on household income (these subsidies help to offset monthly premium costs as well as out-of-pocket costs, with eligibility based on household income).
The health insurance plans sold in the marketplace are designed for people who are self-employed, employed by a small business that doesn’t offer health coverage benefits, or early retirees who aren’t yet eligible for Medicare.
Healthcare plans in the Massachusetts marketplace are available to anyone during the annual open enrollment period (which tends to be extended into January in Massachusetts, offering one of the longest enrollment periods in the United States). If it’s outside of the annual open enrollment period, you may qualify for a special enrollment period if you’ve experienced a qualifying event, such as losing healthcare coverage through an employer, moving to a new area, or getting married.
Based on your income you may also qualify for health insurance in Massachusetts under expanded Medicaid coverage. When the Affordable Care Act was enacted in 2010, Medicaid expansion was a cornerstone of lawmakers’ efforts to expand realistic access to health coverage and healthcare to as many people as possible. If you have a household income up to 133 percent of poverty (138 percent with the 5 percent income disregard), you will likely be able to enroll in Medicaid (MassHealth), and enrollment is available year-round.
Medicaid eligibility is also calculated on a monthly basis, so even if you earned more than 138 percent of the poverty level earlier in the year, or expect to do so later in the year, MassHealth can serve as temporary coverage during a time when your income is low. Once your income picks back up, you and your dependents will be eligible for a special enrollment period (triggered by loss of eligibility for Medicaid) during which you can change to private coverage offered via the Massachusetts marketplace.
And Massachusetts also has ConnectorCare plans, which are available to people with household income up to 300 percent of the poverty level. For people who are newly eligible or who have not applied for ConnectorCare coverage in the past, enrollment is available at any time.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
The post Short-term health insurance in Massachusetts appeared first on healthinsurance.org.
Colorado health insurance marketplace: history and news of the state’s exchange
Key takeaways
What type of health insurance exchange does Colorado have?
Colorado has a state-run exchange, Connect for Health Colorado. The state passed legislation in 2011 to create the exchange, and is among just 15 states (including DC) that are running their own exchanges and enrollment platforms for 2021 coverage.
Although some carriers exited the Colorado exchange at the end of 2016 — as was the case in most states — Connect for Health Colorado is still among the most robust exchanges in the country, with eight carriers offering plans for 2021. In the individual/family market there are 159 on-exchange plans available in Colorado in 2021, up from 130 in 2020.
Colorado implemented new regulations for short-term health plans in 2019, effectively eliminating them in the state. As of April 2019, there were no longer any short-term plans for sale in Colorado. But Colorado is among the states with the highest enrollment in health care sharing ministry plans, and had around 10 percent of the nation’s direct primary care clinics as of 2018. Sharing ministry plans and direct primary care plans are both sometimes seen as another alternative to ACA-compliant health plans.
When is open enrollment for 2021 health insurance in Colorado?
Colorado has permanently extended open enrollment, so it runs from November 1 to January 15 every year. Open enrollment for 2021 health plans started November 1, 2020 and continued until January 15, 2021. As of January 6, enrollments had reached 172,000 — surpassing the 2020 total (which had been under 167,000) with more than a week remaining in the open enrollment period.
As a result of the coronavirus pandemic, nearly all of the state-run exchanges opened special enrollment periods to allow uninsured residents to sign up for health coverage (HealthCare.gov, which is the exchange platform that’s used in 36 states as of 2021, did not offer a COVID-specific special enrollment period). Colorado’s exchange opened a COVID-19 special enrollment period that ended April 30, 2020; more than 14,000 people enrolled in plans through the exchange during that window. That special enrollment period was for anyone who didn’t have minimum essential coverage — so it was not an opportunity for people to change their existing coverage, but it was an opportunity for people with plans that aren’t considered minimum essential coverage (such as health care sharing ministry plans) to switch to a real insurance policy.
Now that the open enrollment period for 2021 coverage has ended, normal special enrollment period rules apply in Colorado’s exchange. So people with qualifying events continue to have an opportunity to sign up for coverage. Loss of other coverage is always the most commonly-used qualifying event, and that’s especially true in light of the widespread job losses triggered by the pandemic.
How much does individual health insurance cost in Colorado?
In 2020, the average full-price (pre-subsidy) premium for plans purchased through Connect for Health Colorado was about $482/month — significantly lower than the national average of $576/month. But about three-quarters of Colorado’s exchange enrollees received premium subsidies that averaged about $374/month in 2020.
2020 was the first year that average premiums for ACA-compliant health plans decreased in Colorado, with an average rate decrease of more than 20 percent for 2020 individual market plans. But as described below, that applied to people who pay full price for their coverage. Many people who get premium subsidies saw increases in their after-subsidy premiums.
And for 2021, average premiums decreased again in Colorado’s individual market. Although the state’s insurers proposed an overall average rate increase of 2.2 percent for 2021, the Colorado Division of Insurance approved an overall average rate decrease of 1.4 percent. But that’s just an average; the actual rate changes that people experienced vary considerably depending on where they live, which insurer they use, and — if they receive a premium subsidy — how much the benchmark premium in their area changes.
Bucking the national trend, bronze plans became the most popular option in Colorado as of 2016, with 45 percent of enrollees picking bronze during open enrollment. Nationally, silver plans are twice as popular as bronze plans across all of the state-run exchanges, and more than three times as popular as bronze plans in states that use Healthcare.gov. Bronze plans were also more popular in Colorado than in other states in 2014 and 2015, but 2016 was the first year that bronze plan selections outnumbered silver in Colorado. That continued to be the case in 2017, 2018, 2019, and 2020.
Colorado has a lower-than-average percentage of enrollees who qualify for premium subsidies (although the number of people who qualify for subsidies increased when premiums grew sharply in 2017 and 2018), so there are a significant number of enrollees who pay full-price for their coverage. Bronze plans are the lowest-cost option, so they tend to appeal to people who have to pay full price. In 2020, two-thirds of unsubsidized buyers in Colorado selected bronze plans.
2021 rates and plans: Average rate decrease of 1.4%, plus coverage area expansions for some insurers
Colorado’s individual market insurers initially proposed an overall average rate increase of 2.2 percent for 2021, with some insurers proposing increases and others proposing decreases. But after some filings were revised and the rate review process was complete, the Colorado Division of Insurance announced that overall average rates would decrease by 1.4 percent for 2021, with average premiums declining for every insurer except Cigna and Anthem (and the approved increases for those two insurers are much less significant than the insurers had initially proposed).
In the small group market, insurers proposed an overall average rate increase of 5.7 percent, and the Division of Insurance approved an overall average increase of 3.8 percent.
For the eight individual market insurers, all of which sell plans through Connect for Health Colorado, the following average rate changes were approved for 2021 (listed in order of carrier market share, from largest to smallest):
Colorado’s reinsurance program, which took effect in 2020, is credited with keeping proposed premiums for 2021 an average of nearly 21 percent lower than they would otherwise have been.
Colorado “easy enrollment” program will debut in early 2022
In June 2020, Colorado lawmakers approved HB1236, which calls for the creation of an Affordable Health Care Coverage Easy Enrollment Program in the state, starting in 2022 (based on 2021 tax returns). The legislation, which was signed into law by Governor Polis in early July, is supported by the state-run exchange, Connect for Health Colorado, and is very similar to a program that Maryland implemented in 2020.
HB1236 will let Colorado residents indicate on their state tax returns that they would like Connect for Health Colorado to determine, based on the information on their tax return, whether they might be eligible for free or subsidized health coverage. If so, the exchange would be able to reach out to the person to help them enroll in coverage — Medicaid, CHP+, or a subsidized private plan in the individual market.
The legislation will create a special enrollment period for people identified by the program as eligible for free or subsidized coverage, so that they would have a chance to enroll in coverage early in the year (soon after filing their tax return) instead of having to wait for the open enrollment period in the fall. Amendments made by the Senate in June clarify that the person would have to be represented on a Colorado tax return filed by the April 15 deadline, and that the insurer will not have to further verify that the person is eligible for a special enrollment period.
A recent Colorado Health Access survey found that people with income between 139 and 400 percent of the poverty level (ie, people who are eligible for premium subsidies in the exchange) are more likely to be uninsured than people with lower or higher income. The easy enrollment program would help to identify these individuals and allow the exchange to provide them with targeted enrollment assistance outside of the normal open enrollment window.
Colorado’s new Health Insurance Affordability Enterprise law
Colorado Senate Bill 215 was signed into law on June 30, 2020. The law, which is known as the Health Insurance Affordability Enterprise, will fund the state’s existing reinsurance program for five more years (it was previously only funded through 2021), and will fund state-based subsidies to make coverage more affordable, as well as outreach and enrollment activities.
The law calls for the state to start collecting a new fee assessed on health insurance premiums for health plans subject to regulation by the Colorado Division of Insurance (ie, individual plans and fully-insured group plans, but not self-insured group plans). The fee will replace the federal Health Insurance Tax, which is being eliminated after the end of 2020. The bill will also impose a new assessment on Colorado hospitals, replacing (at a lower amount) the existing fee that funds Colorado’s reinsurance program.
The funding to make coverage more affordable will be allocated to two separate programs. The first, which will become available as of 2022, will send money directly to health insurance companies so that they can reduce premiums for people who receive premium subsidies under the ACA. This is designed to address the fact that people who get ACA premium subsidies are generally getting smaller subsidies now that the reinsurance program is in effect (details below), making their net premiums higher than they were prior to 2020.
The second program will be state-based premium subsidies, available starting in 2023, for people with income up to 300 percent of the poverty level who don’t get ACA premium subsidies (including undocumented immigrants and people caught by the family glitch).
New Mexico lawmakers tried to implement a similar bill earlier this year; it passed in the New Mexico House, but died immediately in the Senate. New Jersey lawmakers are working on similar legislation in 2020; if approved, it would start to provide state-funded premium subsidies as soon as 2021.
How did the reinsurance program affect 2020 health insurance premiums in Colorado?
Colorado enacted HB1168 in 2019, paving the way for the state to create a reinsurance program for plan years 2020 and 2021 (SB215, described above, will provide an additional five years of state funding for the reinsurance program). The state’s reinsurance waiver proposal was submitted to CMS in May 2019, and received federal approval in July.
Colorado’s reinsurance program took effect in 2020, and resulted in overall average premiums (before subsidies are applied) decreasing by 20 percent. The reinsurance program is designed to reimburse insurers an average of 60 percent of the cost of claims that are between $30,000 and $400,000, although the actual reimbursement percentage varies by location. The program is structured to incentivize insurers to offer plans in areas of the state where few insurers previously offered plans, and to offset a larger portion of claims in high-cost areas of the state — ie, the mountains and rural areas — as opposed to the heavily populated I-25 corridor where health care costs are lower.
To that end, Colorado’s reinsurance proposal is innovative: It pays a larger percentage of claims in high-cost areas, with specifics that can vary from one year to the next. The goal of the program was to reduce premiums by 15-20 percent in the parts of the state where premiums were already lower, by 20-25 percent in areas where premiums were middle-of-the-road, and by 30-35 percent in areas where premiums were the highest.
For 2021, the reinsurance program will pay 40 percent of eligible claims in rating areas 1, 2, and 3 (Boulder, Colorado Springs, and Denver), It will pay 45 percent of eligible claims in rating areas 4, 6, 7, and 8 (Fort Collins, Greeley, Pueblo, and the eastern plains/south-central Colorado). And in the mountains and western part of the state, including Grand Junction, the reinsurance program will pay 80 percent of eligible claims (note that all of these percentages are a little lower than they were for 2020).
Overall, the state’s waiver proposal projected that reinsurance would result in a 16 percent average decrease in average premiums for 2020. And in July 2019, the Colorado Division of Insurance announced that insurers in the state’s individual market had proposed an average rate decrease of 18.2 percent for 2020, based on the assumption that the reinsurance proposal would be approved (the proposed average rate change would have been a 0.5 percent increase if the reinsurance program had not been approved). Once rates were finalized, the average rate decrease was even bigger, at 20.2 percent. For 2021, the Division of Insurance noted that the reinsurance program is still keeping premiums an average of 17 percent lower than they would otherwise have been.
When 1332 waivers are used to implement reinsurance, the general idea is that the reinsurance program results in lower premiums, which in turn, results in smaller premium subsidies being paid by the federal government. By using a 1332 waiver, the state gets to keep those savings (referred to as pass-through funding) instead of the federal government keeping the money that they save on premium subsidies. The state then utilizes that money, along with state funding as necessary, to cover the cost of the reinsurance program. Colorado’s waiver proposal projected that federal pass-through funding will be $170 million in 2020 (this projection was spot-on; the actual amount was $169.5 million) and $183 million in 2021.
Colorado’s individual market insurers — all of which offer plans in the exchange — implemented the following average rate decreases for 2020:
The final premiums for Cigna, Friday Health, and Kaiser were all a little lower (ie, a more significant rate decrease) than the insurers initially proposed.
Colorado insurers began adding the cost of CSR to silver plans rates as of 2019 (a change from 2018, when they spread the cost across the premiums for all plans), and continue to use that approach in 2020.
Why did premiums increase in 2020 for many Colorado exchange enrollees who get premium subsidies?
It’s noteworthy that although overall average premiums are dropping by 20 percent in Colorado in 2020 — the largest percentage decrease in the country — that rate decrease really only applied to people who don’t get premium subsidies (that’s about 20 percent of on-exchange enrollees, plus everyone who has ACA-compliant coverage outside the exchange, where subsidies aren’t available).
For people who do get subsidies, the subsidies decreased in line with reductions in the benchmark premium in each area. And some plans (including the benchmarks in some areas) had sharper premium decreases than others. As an example, consider a family of four (parents in their early 40s and two young children) living in Denver and earning $95,000 a year. We’ll keep them the same age in 2019 and 2020 and keep their income unchanged in order to compare apples to apples.
In 2019, they qualified for a premium subsidy of $747/month. And after that subsidy was applied, the least-expensive plan they could get was $355/month (a $6,000 deductible plan from Bright Health). If they wanted an HDHP in order to be able to contribute to an HSA, their least expensive option was $445/month after their subsidy. In total, there were 45 plans from which this family could choose.
For 2020, however, there are 58 plans, and unsubsidized premiums have dropped across the board — all of which is good news for people who don’t get premium subsidies. But this family’s subsidy shrank significantly, to only $379/month in 2020. That’s because the full-cost price of the benchmark plan is a lot lower: $1,159/month in 2020, versus $1,527/month in 2019 (those are two different plans; the benchmark in that area was offered by Kaiser in 2019, and by Cigna in 2020).
Because the benchmark plan is so much cheaper, premium subsidies for everyone in the area are smaller in 2020. For this family, the lowest-cost option for 2020, after their subsidy is applied, is $523/month. The same Bright Health plan that had a net premium of $355/month in 2019 is $529/month in 2020 — despite the fact that its full-price premium (ie, without any subsidies) dropped from $1,102/month to $909/month. If this family wants an HDHP in 2020, the cheapest one is $569/month.
So if we assume this family enrolled in the $355/month plan in 2019 and they wanted to keep it for 2020, their net premiums increased by 49 percent (from $355/month to $529/month). And shopping around wouldn’t have done them much good, because the cheapest option for 2020 (a similar plan from Bright Health) would have still resulted in a 47 percent increase in their net premium.
This is not a new phenomenon — it’s happened in other areas in previous years and it will continue to happen in various areas as insurer participation, plan options, and premiums fluctuate from one year to the next. But it’s important for enrollees to understand, especially given that Colorado garnered so many headlines about decreasing premiums for 2020.
It can be shocking to get a renewal notice indicating a substantial after-subsidy rate increase after seeing news reports about widespread rate decreases, but hopefully this summary helps to illustrate how rate changes for people who get subsidies don’t necessarily mirror rate changes for people who don’t get subsidies. If our Denver family had an income of $110,000 (and was thus not eligible for subsidies), they would see a reduction in their premiums from 2019 to 2020: If they had enrolled in the cheapest plan in 2019 it would have cost them $1,102/month, and it would have dropped to $909/month in 2020.
Why did Colorado lawmakers abandon public option legislation in 2020?
After many months of work by regulators and lawmakers, the 2020 legislation that would have created the “Colorado Option” plan was abandoned by lawmakers in May 2020, due to the COVID-19 crisis. If the bill had been successful, the Colorado Option plan would have been available to state residents during the open enrollment period in late 2021, with coverage effective in January 2022. But lawmakers felt that crucial stakeholders — including hospitals and medical staff — could not be expected to participate in the legislative process when their focus needed to be on the COVID-19 pandemic instead. And the budget shortfalls caused by the pandemic would also likely have made passage of the bill nearly impossible in 2020.
Lawmakers noted that they planned to try again in 2021, hopefully amid better circumstances. In January 2021, the bill’s sponsored confirmed that they were working to draft new legislation for consideration in the 2021 session, although they noted that it “will look different than last year’s bill.”
Here’s a backstory on Colorado’s public option:
H.B.1004, signed into law in May 2019, directed the Division of Insurance (DOI) and the Department of Health Care Policy and Financing (HCPF, which oversees Colorado Medicaid) to come up with recommendations for a public option health plan that would compete with private insurers in the state.
H.B.1004 included some basic parameters and guidance, but largely avoided the specifics of how the public option would operate. There were a variety of stakeholder meetings in 2019, aimed at gathering public input on how a public option in Colorado should be crafted. HCPF and DOI presented their draft proposal in October 2019, and their final proposal, with modifications based on public comments and stakeholder feedback, was unveiled in mid-November. Regulators hoped to have the program — referred to as the Colorado Health Insurance Option or simply the Colorado Option plan — up and running by the fall of 2021 so that residents could have coverage in effect as of 2022.
The proposal called for the Colorado Health Insurance Option to be available statewide, offered by the state’s existing health insurers. The individual market state option plans would have to spend at least 85 percent of premiums on medical costs, as opposed to the ACA’s 80 percent requirement (a Wakely actuarial analysis notes that this requirement would apply to the issuer as a whole, rather than just the Colorado Health Insurance Option plans offered by each issuer).
The proposal that the state unveiled in late 2019 stopped short of recommending exactly how much hospitals would be reimbursed under the state option plan, although the earlier draft proposal had recommended 175-225 percent of Medicare rates. In February 2020, the state published an overview of how hospital reimbursements would work under the new program. Hospitals would be paid a base rate of 155 percent of Medicare rates plus additional reimbursement for hospitals that fall into various categories (including critical access hospitals, independent hospitals, management of the underlying cost of care, or a high percentage of Medicare or Medicaid patients).
An actuarial analysis of the hospital reimbursement rate proposal notes that hospitals would end up being paid 155 to 218 percent of Medicare rates, with a statewide average of 168 percent (versus the current 280 percent that they’re currently paid). The analysis estimates that the average hospital can break even at 143 percent of Medicare payment rates, although there is considerable variation depending on location, patient demographics, and other factors. The program will not affect reimbursement rates for doctors and pharmaceuticals; it only sets reimbursement rates for hospitals/facilities.
The analysis also detailed how the state planned to create state-funded premium subsidies and cost-sharing subsidies that would be added on top of the ACA’s premium subsidies and cost-sharing subsidies. Colorado regulators have worked to try to ensure that people who receive premium subsidies will be adequately protected by the new program. They recognize that when average full-price premiums decrease (as they did with Colorado’s reinsurance program, and as they would under the Colorado Health Insurance Option) it directly benefits people who don’t get financial assistance under the ACA (ie, mostly people with income above 400 percent of the poverty level) but can result in people who do get financial assistance actually being worse off, as explained above.
So the plan was to use a 1332 waiver in order to recapture the estimated $43 million reduction in annual premium subsidies flowing into Colorado, and use those funds to provide:
The actuarial analysis projected that enrollment would increase by 18,100 people, all of whom are currently uninsured (or covered by plans like health care sharing ministries, which do not provide minimum essential coverage). Some would be eligible for subsidies, including the new state-funded subsidies, while others would be paying full price but would be able to take advantage of the lower premiums available through the Colorado Health Insurance Option, as premiums are projected to be an average of 12 percent lower than average premiums for other ACA-compliant plans.
[Note that the earlier version of the proposal projected an $89 million reduction in federal premium subsidies, which could be recaptured via a 1332 waiver. But the enhanced state-funded premium subsidies and cost-sharing subsidies are expected to result in more people enrolling in subsidized coverage, so the reduction in federal spending on premium subsidies isn’t going to be as substantial as initially estimated.]
Legislation to create the Colorado Option was introduced in March 2020, sponsored by Rep. Dylan Roberts (D, District 26), Rep. Chris Kennedy (D, District 23), and Rep. Kerry Donovan (D, District 5). But the COVID-19 pandemic began gripping the state, and the rest of the nation, later that month. And by early May, Colorado’s Democratic caucus had abandoned the legislation — although they’ve vowed to try again in 2021, noting that the pandemic highlights the need for a robust public health option in Colorado.
How many people are enrolled through Colorado’s health insurance exchange?
On January 6, 2021, Connect for Health Colorado announced that 172,000 people had already enrolled in coverage for 2021. There was still more than a week remaining in open enrollment at that point, and the enrollment tally had already surpassed the prior year’s enrollment, (when nearly 167,000 people had enrolled in medical plans for 2020) and reached a new record high for Colorado.
2020 was the first time Colorado’s exchange enrollment had dropped, after climbing each year from 2014 through 2019. And the 2021 enrollment total will certainly be a new record high, as it had reached that mark more than a week before open enrollment ended.
Here’s a look at Connect for Health Colorado enrollment over the years (note that the enrollment reports published by Connect for Health Colorado typically differ from the numbers published by CMS, generally due to small differences in the reporting periods):
How have premiums changed in Colorado’s exchange in previous years?
Here’s a look at how average rates have changed in Colorado’s marketplace over the years:
2015: Average increase of only 0.71 percent in the ACA-compliant individual market.
2016: Average increase of 9.84 percent, although it was 12.14 percent if we only count plans sold in the exchange. Average rate changes by carriers and rate sheets for each region of the state are available on the Division of Insurance website (click on “more” under the “approved plans for 2016” section). The Division of Insurance also created an at-a-glance map of the state that shows average rate increases by area, for both the individual and small group markets.
Three carriers that offered coverage in 2015 pulled out of the market in 2016: Colorado HealthOP, New Health Ventures (Access Health Colorado), and Time Insurance Company (Time only sold off-exchange plans in 2015, and exited the market nationwide at the end of the year). Golden Rule began offering individual market health plans in 2016, but only outside the exchange.
In the Denver area, benchmark premiums increased by an average of 32.2 percent for 2016. The benchmark plan is the second-lowest-cost Silver plan, and it’s not the same plan from one year to another. The increase in Denver (and across much of Colorado) was due to the fact that Colorado HealthOP had the lowest rates in most parts of the state in 2015, and their plans weren’t available in 2016. When compared with the average benchmark prices in other areas across the country, Denver’s rates were still very much in line with the national average.
2017: Average increase of 20.4 percent for individual market plans (on-exchange, the average was 20.9 percent, while off-exchange, it was 19.9 percent). In the small group market, the average increase was just 2.1 percent.
2018: Average rate increase of 34.3 percent for individual market plans. Insurers had initially proposed an average rate increase of 26.96 percent, although that included two filings for plans that would only be available off-exchange (Freedom Life, at 27 percent, and Anthem’s catastrophic PPO, at 33.5 percent).
Despite a robust review, regulators were only able to make a slight reduction in the proposed overall average rate increase, getting the average down to 26.7 percent from 26.96 percent. Most of the approved rates were very similar to what insurers had proposed, although the DOI made some significant changes to the rates that were filed by Bright Health and Cigna.
But those rate filings were based on the assumption that funding for cost-sharing reductions (CSR) would continue in 2018. The Division of Insurance noted in September that they had backup rates that would be used if CSR funding were to be eliminated. On October 12, the Trump Administration announced that CSR funding would end immediately. As a result, the backup rates were implemented in Colorado.
The Division of Insurance noted that the overall average rates would increase by 6 percentage points over the already-approved rates. Ultimately, the average rate increase in Colorado was 34.3 percent for 2018. Colorado was one of only five states where the cost of CSR was added to plans at all metal levels in 2018, rather than being concentrated only on plans at the silver metal level.
The Colorado Division of Insurance clarified that their decision to have insurers spread the cost of CSR across all metal plan premiums (as opposed to just silver plan premiums) was made because the state wasn’t sure that the federal government would accept a silver load strategy. Insurers filed the backup rates in the early summer of 2017, and it wasn’t entirely clear what other states were going to do at that point. Although almost all states ultimately ended up having insurers add the cost of CSR only to silver plan premiums — and the federal government didn’t push back against that strategy — Colorado regulators were afraid that they would end up in a situation where they needed to deploy their backup rates, only to find out that the federal government wouldn’t allow those rates, leaving them with no fallback plan. Hence, the backup plan included adding the cost of CSR to premiums for 2018 plans at all metal levels.
The rate filings are available in SERFF and the SERFF filing numbers are on the Colorado Division of Insurance statement about the approved rates. Some of the filings clearly indicated that a factor in the overall increase was the expected lack of enforcement of the individual mandate (or at least a perception that it wouldn’t be enforced) which insurers expected would lead to fewer people enrolling, and a less healthy risk pool than there would be if the individual mandate were being strongly enforced.
2019: Average increase of 5.6 percent. But because Colorado began allowing insurers to add the cost of CSR to silver plan rates for 2019 (as opposed to spreading the cost across premiums for all plans, the way they did in 2018), premium subsidies grew substantially in 2019. The state noted that while there was an overall average increase of 5.6 percent for unsubsidized premiums, people with premium subsidies who kept the same plan from 2018 to 2019 saw an average decrease of 24 percent in their after-subsidy premiums.
Under Colorado’s new approach to handling the cost of CSR, if the exact same silver plans are also sold off-exchange, they have to include the cost of CSR in their premiums. But as long as the on- and off-exchange silver plans have a difference in benefits, the cost of CSR can be added only to the on-exchange silver plans.
To accomplish this, the Colorado Division of Insurance suggested the insurers could slightly adjust (by $5) the off-exchange ambulance/emergency transportation benefit in order to have a slight difference between the on- and off-exchange plans. The two plans would then have different identification numbers in the Health Insurance Oversight System (HIOS) and could then have differing premiums, with the cost of CSR added to the on-exchange version and not to the off-exchange version. Insurers have the option of using a different approach to creating a slight benefit difference between on- and off-exchange silver plans, but had to discuss the proposal with the Division of Insurance before proceeding.
Connect for Health Colorado projected that two-thirds of subsidy-eligible enrollees would be able to select bronze plans that would be free after 2019 premium subsidies are applied. Although this happened in many other states (here’s an example, from Wyoming) in 2018, it didn’t happen in Colorado in 2018 because the cost of CSR was added to all plan premiums, and not just silver plan premiums. But when Colorado began silver loading the cost of CSR as of 2019, zero-premium bronze plans became available to many enrollees, due to the much larger premium subsidies and the relatively smaller bronze plan prices.
2020: Average premiums decreased by 20 percent, thanks to the state’s new reinsurance program (described above).
2021: Average premiums decreased by 1.4 percent.
What health insurance companies offer coverage in Colorado’s exchange?
Eight insurers offer coverage in Colorado’s exchange in 2021: Anthem (HMO Colorado), Bright, Cigna, Denver Health, Friday Health Plan, Kaiser Permanente, Oscar, and Rocky Mountain Health Plan. Two insurers expanded their coverage areas for 2021. So while there were 22 counties in Colorado (out of 64) where Anthem BCBS was the only insurer offering plans in the exchange in 2020, that dropped to just ten counties in 2021.
Colorado has always had a robust exchange, although most of the insurer participation is concentrated along the I-25 corridor (Colorado Springs, Denver, Fort Collins, etc.). In the mountains and eastern plains, insurer participation has been much more limited. In the first few years of exchange operation, there was some upheaval in terms of insurer participation, but it had leveled out at seven insurers. Oscar Health joined the Colorado exchange in the Denver metro area in 2020, bringing the total number of insurers to eight.
Here’s a look at how carrier participation in Colorado’s exchange has changed over time:
2014: Ten insurers offered individual market plans in Colorado’s exchange in 2014: All Savers, Cigna, Colorado Choice, Colorado Health OP (an ACA-created CO-OP), Denver Health, HMO Colorado (Anthem), Humana, Kaiser, New Health Ventures (Health Access Colorado), and Rocky Mountain Health Plans.
2015: The same ten insurers continued to offer individual market plans in the exchange in 2015.
2016: There were several changes for 2016. New Health Ventures (Health Access Colorado), which had 450 members, dropped out of the market at the end of 2015 after suffering “heavy financial losses.” But most significantly, there were also 82,000 people with CO-OP (Colorado HealthOP) plans who had to pick new plans for 2016, as the CO-OP shut down at the end of 2015.
Colorado HealthOP had by far the lowest premiums in most areas of Colorado in 2015, and particularly for enrollees who don’t receive premium subsidies, the switch to a different carrier meant a sharp increase in premiums for 2016 (in hindsight, the low premiums and generous benefits that the CO-OP offered were clearly unsustainable).
Amid the carrier exits, there was one entrant: UnitedHealthcare of Colorado began offering individual market plans in the state, both on- and off-exchange. Their participation was short-lived, however, as they left the market at the end of 2016.
There were still 75,000 people with grandmothered plans in the individual market in Colorado in 2015, and all of them had to select new coverage for 2016, as grandmothered plans terminated at the end of 2015 in Colorado.
2017: Humana and UnitedHealthcare exited the individual health insurance market in Colorado, both on and off-exchange, at the end of 2016. According to the Colorado Division of Insurance, the carriers’ decisions to leave the individual market impacted about 20,000 people.
Rocky Mountain Health Plans (RMHP, otherwise known as Rocky Mountain HMO) and Anthem BCBS continued to offer plans in the individual market — including in the exchange — in 2017, but their offerings were reduced.
RMHP began offering individual market plans only in Mesa County as of 2017. This is the Grand Junction area, and it’s where RMHP is based. Roughly 10,000 people in other areas of Colorado needed to enroll in new coverage for 2017, as their RMHP coverage ended at the end of 2016. RMHP’s exit from the individual market in the mountains and western slope left many areas in that region with Anthem BCBS as their only on-exchange option starting in 2017.
Anthem continued to offer HMO plans throughout Colorado in 2017 (and continues to do so as of 2019), but they discontinued their PPOs at the end of 2016. There were 62,310 people with Anthem PPOs in the individual market in Colorado in 2016. All of them had to select a new plan for 2017. They still had access to Anthem plans, albeit HMOs.
All together, including Humana, United, RHMP, and Anthem enrollees, more than 92,000 people had to switch plans at the end of 2016.
But Bright Health Insurance was approved by the Colorado Department of Insurance to start offering individual plans on and off the exchange in 2017. Bright was the first new carrier to enter the exchange in Colorado since the exchange opened for business in the fall of 2013. They began offering plans in eight of Colorado’s 64 counties in 2017: Arapahoe, Boulder, Broomfield, Denver, Douglas, El Paso, Jefferson, and Summit counties (there are 16 zip codes in Boulder County, but Bright Health Insurance was only available in four of them. The other seven counties appeared to have coverage county-wide though).
2018: Colorado Choice, a Colorado non-profit that’s offered coverage for more than four decades, was purchased by Melody Health at the beginning of June 2017 (Melody had planned to offer coverage in Wyoming and Nevada for 2017, but did not get the necessary regulatory approval in time to sell 2017 plans). With the acquisition, Colorado Choice plans began to be marketed as Friday Health Plans for 2018, and are for-profit rather than non-profit. Colorado Choice plans were available in five of Colorado’s nine rating areas in 2017, and that grew to six rating areas for 2018. However, Colorado Choice/Friday Health offered fewer plans in each area in 2018.
Although 14 of Colorado’s 64 counties had just one participating insurer in 2018, almost 95 percent of Connect for Health Colorado’s enrollees lived in areas where there were at least two insurers offering plans, and more than 83 percent of enrollees had three or more insurers from which to choose.
2019: Friday Health expanded into the three remaining rating areas, and joined Anthem in offering coverage in all nine of Colorado’s rating areas (Anthem offers plans in every county, whereas Friday only had partial coverage in three of the nine rating areas; their coverage in the West rating area in 2019 was limited to just two of the 21 counties). Friday’s rate filing indicated that they expected their membership to grow to 10,000 people as a result of their coverage area expansion (by the time they filed their 2020 rate proposal, enrollment stood at 7,293). Pueblo went from having two insurers in the exchange to three, Boulder went from having four to five, and Grand Junction from two to three. Grand Junction is unique in that it’s the only rating area where Rocky Mountain Health Plans offers individual market coverage, and the only rating area where Kaiser did not offer coverage in 2019.
The Division of Insurance published a chart showing the projected change in average after-subsidy premiums (for enrollees who receive premium subsidies) from 2018 to 2019, in each of the state’s nine rating areas, for enrollees who keep the same plan in 2019 than they had in 2018. Overall, there was an average decrease of 24 percent. But in Grand Junction, subsidized enrollees who kept the same plan from 2018 to 2019 ended up with an average premium increase of 38 percent. However, if they were willing to switch to the lowest-cost plan at the same metal level, they saw an average after-subsidy premium decrease of 56 percent.
This is a perfect illustration of how a new insurer entrant can disrupt a market, and how the effect can be both good or bad, depending on your perspective. Friday Health took over the benchmark plan spot in Grand Junction in 2019, with rates that were lower than the benchmark would otherwise have been. That means everyone in that area who received premium subsidies was getting smaller subsidies in 2019 than they would otherwise have received. If they opted to keep the same plan they had in 2018, they may have seen significant average net premium increases, due to the smaller premium subsidies. If they opted to switch to a lower-cost plan in the same metal level (offered by Friday Health), they saw a sharp reduction in their premiums for 2019. But for people with pre-existing conditions, provider networks and drug formularies play a role in determining the feasibility of switching to a new plan.
2020: Oscar Health joined the exchange in the Denver area. All of the other insurers continued to offer plans — although there were some shifts in their coverage areas — so a total of eight insurers are offering plans in Colorado’s exchange in 2020. There are 22 counties in Colorado where Anthem is the only insurer offering plans in the exchange, up from 14 counties in prior years.
Friday Health Plans exited several counties in the eastern part of the state at the end of 2019, although they had no enrollees in any of those six counties. And Kaiser exited the western/mountain area of the state (Kaiser had no enrollees in three of the counties where they exited; curiously, Kaiser’s plans did not appear on the exchange’s plan comparison tool in counties like Routt, even in 2019 when they supposedly offered on-exchange plans in that area). But Bright Health entered Summit County as part of the Peak Health Alliance, preventing that county from dropping to a single insurer.
2021: Rocky Mountain Health Plans and Bright Health expanded their coverage areas for 2021. RMHP expanded into 12 additional counties: Archuletta, Dolores, Garfield, Gunnison, Hinsdale, La Plata, Montezuma, Montrose, Ouray, Pitkin, San Juan, and San Miguel. Bright Health expanded into Dolores, Grand, Lake, La Plata, Montezuma, and San Juan counties. There are only ten counties in Colorado with just a single insurer (Anthem) offering coverage in 2021: Eagle, Jackson, Logan, Moffat, Phillips, Rio Blanco, Routt, Sedgwick, Washington, and Yuma counties.
State is seeking CMS input on whether federal permission could be granted to allow anyone to buy a catastrophic plan
S.B.132 was signed into law in 2018, and directed the state to conduct an actuarial study on the impact of allowing people over the age of 30 who don’t have hardship exemptions to purchase catastrophic plans. The bill was amended in February 2018 to ensure that the catastrophic plans would only be available through the exchange. The provision requiring that the state conduct an actuarial study and only submit the 1332 waiver if the proposal would not reduce total premium subsidies or increase average premiums was also an amendment (the initial bill would have just directed the state to seek federal approval to expand access to catastrophic plans).
The ACA’s premium subsidies cannot be used for catastrophic plans, so the expansion of catastrophic plans would likely only appeal to healthy people who aren’t eligible for subsidies and are currently paying full price for the cheapest bronze plans they can get (catastrophic plans are generally less expensive than bronze plans because they’re in a separate risk adjustment pool). The legislation stated that if the study found that doing so would not reduce the total amount of premium subsidies provided to Colorado residents, and would not result in higher average individual market premiums, the state would then submit a 1332 waiver to the federal government, seeking permission to allow anyone in Colorado to purchase a catastrophic plan (the ACA limits the sale of these plans to people under age 30, and people who have a hardship exemption from the ACA’s individual mandate).
The state contracted with Wakely for the actuarial analysis, and the results were published in November 2018. Wakely concluded that total premium subsidies would likely increase (by no more than 6.6 percent) during the first year of universally available catastrophic plans. This is because healthier people would be expected to migrate to lower-cost catastrophic plans, leaving a less healthy population in the metal-level plans. That would lead to higher premiums for the metal-level plans, and since premium subsidies are based on the cost of the benchmark silver plan, subsidy amounts are expected to be higher. And since the people switching to catastrophic plans are expected to be those who aren’t eligible for subsidies anyway, they wouldn’t be giving up subsidies (and thus saving the federal government money) with their switch to catastrophic coverage.
The ACA only allows 1332 waivers to be approved if doing so would not increase federal deficits. Since premium subsidies are funded by the federal government, Wakely’s analysis notes that “allowing greater enrollment in Catastrophic plans would not meet the Federal deficit requirement as part of a 1332 waiver.” But in October 2018, CMS issued new guidance for 1332 waivers, noting that although waivers still cannot be approved if they would increase the federal deficit in the long run, it’s now possible for a waiver to be approved if it would result in increased federal spending in a given year, but not overall. In light of this and the result of Colorado’s actuarial study, Colorado Insurance Commissioner Mike Conway sent a letter to CMS in November 2018, asking whether a 1332 waiver to expand access to catastrophic plans would be likely to be gain approval. The state is still awaiting a reply as of 2020.
Information about S.B.132, the actuarial study, and correspondence with CMS can be found here.
Allowing brokers to charge fees
S.B.136 was signed into law in 2018. It allows insurance brokers to charge clients a fee if the insurer doesn’t pay a commission. Brokers were not previously allowed to charge any sort of fee, and have historically only been compensated via commissions from insurance carriers (with enrollees paying the same price for their coverage, regardless of whether they use a broker or not).
But some insurers have eliminated broker commissions, resulting in fewer brokers who are willing to work with individual market clients (in the group market, insurers still pay commissions). S.B.136 was designed to ensure that there will continue to be brokers available to serve people who buy coverage in the individual market, although the consumers may have to pay for that assistance themselves.
The Colorado Division of Insurance proposed regulations for broker fees (here and here), which became effective August 8, 2018.
DOI banned differing commission structures for brokers
In late 2015, many of the nation’s health insurance carriers began reducing or eliminating broker commissions, mostly for plans sold outside of open enrollment (during special enrollment periods triggered by qualifying events) or for benefit-rich plans at the gold and/or platinum level.
The general consensus was that the commission cuts were an effort by health insurance carriers to limit sales in general, or to limit sales of benefit-rich plans, which tend to be more popular among enrollees who have health conditions, and are more expensive to insure. In 2014 and 2015, eligibility for special enrollment periods was very loosely enforced by Healthcare.gov and some of the state-run exchanges, and carriers noted that healthcare utilization tended to be higher for people who enrolled outside of open enrollment.
In December 2015, Colorado’s Department of Insurance issued a regulatory bulletin (B-4.87) stating that carriers cannot offer “differing commission structures,” which they defined as different commission levels for different metal levels, different commission structures for plans sold during open enrollment versus outside of open enrollment, or “not paying commissions on certain plans offered in the State of Colorado.” The Department of Insurance warned carriers that none of those actions are allowed, and that carriers that utilize differing commission structures would risk “enforcement actions to remedy those violations.”
The purpose of the state’s regulatory bulletin was to protect consumers’ access to the full range of plans available, regardless of whether the consumer is enrolling during open enrollment or as a result of a qualifying event, and regardless of what metal level plan the consumer needs.
Bulletin B-4.87 is still in effect, but some insurers in Colorado have simply switched to a model under which they pay no commissions at all for new enrollments. There’s no “differing commission structure” so the lack of commissions doesn’t run afoul of the regulation. But it does result in fewer brokers being willing to assist people with individual market coverage (commissions are still paid by all insurers for group health insurance plans). After declining in 2017 and 2018, broker commissions have increased again for 2019, as insurers have started to once again be profitable in the individiual market
Regulators considered, but rejected, a switch to a single rating area
Colorado has significant disparity in terms of healthcare costs — and thus health insurance premiums — from one area of the state to another. Rates in the mountain areas of the state are far higher than rates along the I-25 corridor, and although subsidies make coverage affordable for people who are eligible, there’s no assistance for someone earning more than 400 percent of the poverty level.
As an example, a 59-year old in Pagosa Springs who earns $50,000/year would have had to pay $1,063/month (25 percent of her income) for the least expensive bronze plan available in the exchange in 2019, and is ineligible for any premium subsidies to make the coverage more affordable (note that if she earned $48,000, she would be eligible for $1,006/month in premium subsidies and could get the least expensive plan for just $56/month; the subsidy cliff is most significant for older applicants in areas where health insurance is expensive).
In an effort to address the disparity, then-Governor Hickenlooper signed HB 1336 into law in May 2016. The bill directed the Colorado Department of Insurance to study the impact of making Colorado one unified rating area, meaning that premiums would rise in the areas where they’re currently lower, and would fall in the mountain areas of the state where they’re currently higher.
The DOI’s report on the impact and viability of a single rating area was presented to the legislative committees in August 2016. The DOI did not recommend that the state become a single rating area, but recommended instead that the state work to find ways to lower the underlying cost of health care, since that’s what drives health insurance premiums. Insurance Commissioner Marguerite Salazar noted that a single rating area strategy could backfire, leading carriers to adjust their plan offerings or even leave the state altogether.
As of 2020, Colorado has nine rating areas (there were 11 prior to 2015, but some areas were combined as of 2015). The District of Columbia uses a single rating area, as do six states: Hawaii, Delaware, New Hampshire, New Jersey, Rhode Island, and Vermont.
Increased legislative oversight
In March 2016, Governor Hickenlooper signed HB1148 into law. HB1148 gives the legislative oversight committee increased authority to monitor and oversee various aspects of Connect for Health Colorado’s rule-making processes.
The law gives the legislative committee “oversight over rules and policies proposed by the health benefit exchange that affect bidding and awarding contracts, carrier and regulating carrier participation, regulating broker participation and compensation, interacting with other state agencies, managing and compensating the assistance network, or the handling of any type of appeal.”
Colorado CO-OP shut down by regulators
On October 9, 2015, Colorado HealthOP — the state’s ACA-created CO-OP — joined six other CO-OPs that had already failed (and by the end of 2015, 12 of the original 23 CO-OPs had shut down; as of 2020, there were only four CO-OPs still in operation around the country). The Department of Insurance announced that they had made the difficult decision to decertify Colorado Health OP from the state-run exchange, effectively shutting down the CO-OP.
Although Colorado HealthOP was the seventh CO-OP to fail, they were the first one to publicly disagree with regulators over the shut-down. In their message to members, the CO-OP called the Colorado Division of Insurance’s decision “both irresponsible and premature” and noted that they were “astonished and disappointed by the DOI’s decision”. The CO-OP had said just the day before that they had three viable solutions for funding, and they noted that they had presented them to the DOI earlier in the week.
Colorado Health OP had said that they were on track to pay back their federal start-up loans in full and ahead of schedule, but that was derailed by the announcement on October 1 that risk corridor payments would be just 12.6 percent of the amount owed to each carrier. The Colorado Division of Insurance explained that although the CO-OP had been under DOI supervision for most of 2015, the carrier had been meeting their reserve requirements until October. But the risk corridor shortfall meant that “the Colorado HealthOP’s rainy day fund will be completely wiped out, and is in fact expected to be in the negative by $34 million by the end of the year [2015].” Because of this, the DOI felt they had no option other than to decertify Colorado Health OP from the exchange.
In a last-ditch effort to be allowed to participate in the 2016 open enrollment, Colorado HealthOP filed a lawsuit in Denver District Court on October 19, requesting an injunction and temporary restraining order against then-Insurance Commissioner Marguerite Salazar. But by the end of the day, following a closed-door court hearing, the case had been withdrawn (and suppressed by the court) and the CO-OP had agreed to begin the process of winding down their operations by the end of the year.
Colorado HealthOP had about 80,000 people enrolled in individual plans in 2015. All of those members had to sign up for new coverage for 2016. There were also almost 3,000 members enrolled in small group plans, and initially, the plan was that they would have to switch to new plans as of their next renewal date. But on November 17, Colorado Insurance Commissioner Marguerite Salazar announced that Colorado HealthOP’s small business plans would also terminate as of December 31, and small businesses with Colorado HealthOP plans had to secure coverage with a different carrier for 2016.
Universal healthcare defeated in Colorado in 2016 election
Supporters of universal healthcare in Colorado worked for months to gather signatures in support of ColoradoCare, a universal coverage system that would have gone into effect in 2019 if voters had approved it in the 2016 election. But voters resoundingly rejected the measure, with just 21 percent in favor, and 79 percent opposed.
ColoradoCare would have been enacted using a 1332 waiver under the ACA, which allows states to chart their own course for healthcare reform, as long as they do so in a way that covers at least as many people as the ACA would have, keeps coverage affordable and at least as comprehensive as it would be under the ACA, and doesn’t increase the federal deficit.
If those general guidelines are satisfied, the state can receive funding from the federal government equal to what would have been provided to the state’s residents in premium tax credits, cost-sharing subsidies, and small business tax credits. In Colorado, those funds, together with Medicaid waiver funds, were projected to total $11.6 billion in 2019. Total costs to run a zero-deductible, universal coverage program in Colorado were estimated at $35.6 billion for 2019. The $25 billion difference would have been generated through a 10% income tax. Employees would have paid only a third of the total tax, with their employers kicking in the remaining two-thirds (ie, employees would have paid 3.33 percent of their gross pay).
Grandmothered plans discontinued at the end of 2015
The Colorado Division of Insurance announced that transitional or “grandmothered” health plans had to be discontinued at the end of 2015. As of 2016, all individual and small-group plans in the state were either fully ACA-compliant, or grandfathered (effective dates prior to March 23, 2010).
Despite the fact that many other states are still allowing grandmothered plans to remain in force, there was controversy in Colorado over the fact that grandmothered plans were allowed to renew at all after January 1, 2014. Lawmakers in Colorado passed a bill in 2013 (House Bill 13-1266) that aligned Colorado healthcare law with the ACA. It required Colorado plans to be compliant with the ACA as of their issue or renewal date starting on January 1, 2014. Ultimately, the Division of Insurance used their regulatory power (also provided for in HB 1266) to allow the renewal of grandmothered plans in 2014, but there were questions as to whether or not they overstepped their bounds in doing so.
Background on Colorado’s exchange
Then-Governor John Hickenlooper informed the federal government in October 2012 that Colorado intended to run its own health insurance marketplace, and the state received federal approval of its plan in December 2012.
Unlike politicians in most other states, Colorado legislators voted on a bipartisan basis to move ahead with a state-run exchange. Legislation to establish the state marketplace passed in May 2011 and was signed by Hickenlooper in June 2011. In early 2013, the marketplace was given the brand name “Connect for Health Colorado.”
Colorado’s marketplace is governed by a 12-member board (nine voting and three ex-officio) and led by CEO Kevin Patterson.
Colorado health insurance exchange links
Connect for Health Colorado
855-PLANS-4-YOU (855-752-6749)
State Exchange Profile: Colorado
The Henry J. Kaiser Family Foundation overview of Colorado’s progress toward creating a state health insurance exchange.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
The post Colorado health insurance marketplace: history and news of the state’s exchange appeared first on healthinsurance.org.
Will my health insurance cover the costs of coronavirus testing, vaccines, and treatment?
Key takeaways
Q: Will my health insurance cover the costs of coronavirus testing and treatment?
A: The COVID-19 pandemic has drastically impacted the world over the last year. A common question that people have is “How will my health insurance cover the coronavirus?”
Uninsured in a pandemic? Here are your options.
The short answer? It depends. With the exception of Original Medicare, health insurance differs greatly in the U.S., depending on where you live and how you obtain your coverage. Including the District of Columbia, there are 51 different sets of state insurance rules, separate rules that apply to self-insured group plans (which are not regulated by the states), and 51 different Medicaid/CHIP programs.
Nearly half of all Americans – including a large majority of non-elderly Americans – get their health coverage from an employer. Those plans are regulated by a combination of state and federal rules, depending on the size of the group and whether it’s self-insured or fully-insured.
And about 6 percent of Americans buy their own health insurance in the individual market, where both state and federal rules apply.
Is testing for COVID-19 covered by health plans?
Under the terms of the Families First Coronavirus Response Act (H.R.6201), Medicare, Medicaid, and private health insurance plans – including grandfathered plans – are required to fully cover the cost of COVID-19 testing, without any cost-sharing or prior-authorization requirements, for the duration of the emergency period (which has most recently been extended through mid-April 2021). That includes the cost of the lab services as well as the provider fee at a doctor’s office, urgent care clinic, or emergency room where the test is administered.
Since it’s a federal law, the requirements apply to both self-insured and fully-insured health plans, whereas the testing coverage requirements that numerous states have imposed (see examples here and here) are only applicable to fully insured plans.
What kinds of health plans might not cover testing?
Health plans that aren’t considered minimum essential coverage are not required to cover COVID-19 testing under the federal rules. This includes short-term health plans, fixed indemnity plans, and healthcare sharing ministry plans. It also includes the Farm Bureau plans in Tennessee, Iowa, Indiana, and Kansas – which are not considered health insurance and are specifically exempt from insurance regulations. But some of these plans are voluntarily covering COVID-19 testing and telehealth, so the specifics depend on the plan.
States have the power to regulate short-term health plans, and Washington, for example, extended its testing coverage requirements to include short-term health plans. (Washington already has very strict rules for short-term health plans). But in most states, most plans that aren’t minimum essential coverage are not required to cover COVID-19 testing.
How will my health plan cover a COVID-19 vaccine?
The CARES Act (H.R.748, enacted in March 2020) requires all non-grandfathered health plans, including private insurance, Medicare, and Medicaid, to cover COVID-19 vaccines without any cost-sharing for the member (the same caveats described above apply, however, as plans that aren’t regulated by the ACA are not included in the vaccine coverage requirement unless a state steps up and imposes its own requirement).
The full coverage of COVID-19 vaccines includes both the vaccine itself and any charges from the provider or facility for the administration of the vaccine. The COVID-19 vaccine has been added to the list of recommended vaccines, and the CARES Act required private health plans to begin fully covering it within 15 business days — much faster than the normal timeframe (which can be nearly two years, depending on the circumstances) between when a preventive care recommendation is made and when insurers have to cover it with no cost-sharing.
How can the uninsured get COVID-19 testing and vaccines?
H.R.6201 allows states to use their Medicaid programs to cover COVID-19 testing for uninsured residents, and provides federal funding to reimburse providers for COVID-19 testing for uninsured patients. The CARES Act also provides funding to reimburse providers for the cost of administering COVID-19 vaccines to uninsured individuals.
It’s worth noting that people who don’t have minimum essential coverage are considered uninsured, so depending on availability, they would be eligible for covered testing and vaccines under these programs. In the weeks since the first COVID-19 vaccines were granted emergency use authorizations by the FDA, numerous state insurance departments have issued statements clarifying that residents will not have to pay for the vaccine, regardless of their insurance status.
How much of COVID-19 treatment costs will health plans cover?
Although the federal and state governments have stepped in decisively to ensure that most people won’t incur out-of-pocket costs for COVID-19 testing and vaccines, the cost of treatment is a different matter altogether.
Although the majority of patients are able to recover without hospitalization, Harvard’s Global Health Institute estimates that about 20 percent of COVID-19 patients need to be hospitalized, and about 20 percent of hospitalized patients will need intensive care, including ventilators.
Inpatient care, including intensive care, is an essential health benefit for all ACA-compliant individual and small group health plans (but states define exactly what’s covered for each essential health benefit, so the specifics do vary from one state to another). And although large group plans are not required to cover essential health benefits, they are required to provide “substantial” coverage for inpatient care. If they don’t, the employer can be subject to a penalty under the ACA’s employer mandate, but about 5 percent of large employers still opt to offer scanty plans that don’t comply with this regulation and would offer little in the way of coverage for COVID-19 treatment.
But even when it’s covered by insurance, inpatient care is expensive. And so is outpatient care, depending on the scope of the care that’s needed. This is where patients’ cost-sharing comes into play. Under the ACA, all non-grandfathered, non-grandmothered health plans must have in-network out-of-pocket maximums that don’t exceed $8,550 for a single individual in 2021 (this limit doesn’t apply to plans that aren’t regulated by the ACA, such as short-term health plans).
So for most patients who need COVID treatment in 2021, out-of-pocket costs won’t exceed $8,550. But that’s still a huge amount of money, and most people don’t have it sitting around. The majority of health plans have out-of-pocket limits well below that amount, but most people are still going to be on the hook for a four-figure bill if they end up needing to be hospitalized for COVID-19. Although employer-sponsored plans tend to be more generous than the plans people buy in the individual market, the average employer-sponsored plan still had an out-of-pocket maximum of $4,039 for a single employee in 2020.
With that said, however, many insurers around the country have opted to waive, at least temporarily, members’ out-of-pocket costs related to COVID-19 treatment. It’s important to understand, however, that if an insurer is acting as an administrator for a self-insured employer-sponsored plan, the employer would have to agree to waive the cost-sharing, as it’s the employer’s money (as opposed to the insurance company’s money) that pays the claims.
Some states work to ensure COVID-19 treatment is affordable
Some states (New Mexico and Massachusetts are examples) stepped up early in the pandemic and issued guidance requiring state-regulated insurers to cover treatment (as well as testing) with no cost-sharing, and others (Minnesota is an example) have strongly encouraged insurers to do so (note that the regulation in Massachusetts only applies to doctor’s offices, urgent care centers, and emergency rooms, but not to inpatient care). In addition, several states are requiring telehealth treatment with no cost-sharing. But for the most part, people who need extensive treatment for COVID-19 are going to have to meet their health plan’s deductible and likely the out-of-pocket maximum, unless the insurer has agreed to waive these costs.
Many states are encouraging or requiring state-regulated insurers to treat COVID-19 testing and treatment as in-network, regardless of whether the medical providers are in the plan’s network. And federal rules require this for the vaccine as well, with the cost fully covered regardless of whether the member gets the vaccine from an in-network or out-of-network provider. For vaccine administration, providers are generally not allowed to seek any payment from the patient, including via balance billing. But for COVID-19 testing and treatment provided by out-of-network medical providers, patients could still be subject to balance billing in some circumstances as the out-of-network provider doesn’t have to accept the insurance company’s payment as payment-in-full if it’s less than the billed amount.
And although H.R.6201 prohibits insurance plans from requiring prior authorization for testing, insurers are still allowed to impose their normal prior authorization rules for other services, including COVID-19 treatment, unless a state otherwise prohibits it on state-regulated plans.
How do I make sure I have coverage to protect myself from COVID-19?
So what can you do to protect yourself as much as possible in terms of your health insurance coverage during this pandemic? Here are a few pointers:
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
The post Will my health insurance cover the costs of coronavirus testing, vaccines, and treatment? appeared first on healthinsurance.org.
My wife and I each make about $40,000 a year. If we file our taxes separately, can we each qualify for an exchange subsidy?
Q. My wife and I each make about $40,000/year. If we file our taxes separately, can we each qualify for an exchange subsidy?
Use our calculator to estimate how much you could save on your ACA-compliant health insurance premiums.
A. No. The guidelines for eligibility are determined by total household income and the number of people in the household. For a single individual purchasing coverage with a 2021 effective date, the 400 percent mark is $51,040 in annual income (this is based on 2020 poverty level numbers, as the prior year’s numbers are always used). For two people, it’s $68,960. This makes sense, as it’s less expensive for two people to maintain one household than to maintain two separate households. Taxpayers whose filing status is married filing separately are explicitly ineligible to receive subsidies in the exchange, regardless of their income. (See this IRS publication for more details).
Premium subsidies have to be reconciled on your tax return, using Form 8962. If you receive a premium subsidy during the year and then end up using the married filing separately status, the full amount of the subsidy that was paid on your behalf would have to be repaid to the IRS with your tax return.
In March 2014, the IRS issued a special rule with regards to married people who are unable to file a joint return because of domestic abuse. If a taxpayer files as married filing separately, premium tax credits are still available as long as (1.) the spouses are not living together, (2.) the taxpayer is unable to file a joint return because of domestic violence, and (3.) the taxpayer indicates this information on his or her tax return.
For everyone else, the rules are clear that married couples must file a joint tax return in order to qualify for subsidies in the exchanges.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
The post My wife and I each make about $40,000 a year. If we file our taxes separately, can we each qualify for an exchange subsidy? appeared first on healthinsurance.org.
What happens if my income changes and my premium subsidy is too big? Will I have to repay it?
Q: What happens if my income changes and my premium subsidy is too big? Will I have to repay it?
Use our calculator to estimate how much you could save on your ACA-compliant health insurance premiums.
A: Monthly premium subsidy amounts (ie, the advance premium tax credit – APTC – that’s paid to your insurer each month to offset the cost of your premium) are estimated based on prior-year income and projections for the year ahead, but the actual premium tax credit amount to which you’re entitled depends on your actual income in the year that you’re getting subsidized health insurance coverage.
If recipients end up earning more than anticipated, they could have to pay back some of the subsidy. This can catch people off guard, especially since the tax credits are paid directly to the insurance carriers each month, but if overpaid, they must be returned by the insureds themselves.
The issue of reconciling APTCs was explained in a 2013 IRS publication (see the final column on page 30383, continued on page 30384) which clearly explains that they do expect people to pay back subsidies that are in excess of the actual amount for which the household qualifies.
But the portion of an excess subsidy that must be repaid is capped for families with incomes up to 400 percent of federal poverty level (FPL). Details regarding the maximum amount that must be repaid, depending on income, are in the instructions for Form 8962, on Table 5 (Repayment Limitation). These amounts are adjusted annually, but for the 2020 tax year, the repayment caps range from $325 to $2,700, depending on your income and your tax filing status (single filer versus any other filing status). GOP lawmakers considered various proposals in 2017 that would have eliminated the repayment limitations, essentially requiring anyone who received excess APTC to pay back the full amount, regardless of income. But those proposals were not enacted.
There are some scenarios in which repayment caps do not apply:
Is there any help for me if I have to repay premium subsidies?
The IRS noted that they would “consider possible avenues of administrative relief” for tax filers who are struggling to pay back excess APTC, including such options as payment plans and the waiver of interest and penalties for people who must return subsidy over-payments. If you find yourself in a situation where you must pay back a significant amount of the premium subsidies you received during the prior year, contact the IRS to see if you can work out a favorable payment plan/interest arrangement.
It’s also worth noting that contributions to a pre-tax retirement account and/or a health savings account will reduce your ACA-specific modified adjusted gross income, which is what the IRS uses to determine your premium tax credit eligibility. If you had HSA-qualified health coverage during the year, you can make HSA contributions up until the tax filing deadline the following spring. And IRA contributions can also be made up until the tax filing deadline. You’ll want to talk with your tax advisor to see what makes the most sense given your specific circumstances, but you may find that some pre-tax savings end up making you eligible for a premium subsidy afterall, or reduce the amount that you’d otherwise have to repay.
The COVID pandemic caused widespread financial uncertainty and employment upheavals throughout much of 2020. Additional federal unemployment benefits were provided to millions of people, but there are concerns that the premium tax credit reconciliation could be particularly challenging during the 2021 tax filing season, with many people having to repay subsidies that were paid on their behalf during a time they were unemployed in 2020.
In December 2020, insurance commissioners from 11 states sent a letter to President-elect Biden, recommending various immediate and long-term actions designed to improve access to health coverage and care. One of the short-term recommendations is to provide relief from subsidy claw-backs for the 2020 tax year. Even in the best of times, it can be challenging to accurately project your income for the coming year, but the uncertainty caused by the COVID pandemic made this much more challenging than usual. So it’s possible that the Biden administration and/or Congress might be able to take action to provide some relief in this area, for at least the 2020 tax year.
What if you get employer-sponsored health insurance mid-year?
Most non-elderly Americans get their health coverage from an employer. Individual health insurance is great for filling in the gaps between jobs, but what happens if you start off the year without access to an affordable employer-sponsored health insurance plan, and then get a job mid-year that provides health coverage?
If a premium subsidy was paid on your behalf during the months you had individual market coverage, you may end up having to repay some or all of the subsidy when you file your tax return. It all depends on your total income for the year, including income from your new job. If your total income still ends up being in line with the estimate you provided when you applied for your subsidy, you won’t have to pay that money back. But if your actual income for the year ends up being substantially higher than you initially projected, you may end up having to repay some or all of that subsidy when you file your taxes.
It doesn’t matter that your income was lower when you were covered under the individual market plan. In the eyes of the IRS, annual income is annual income — it can be evenly distributed throughout the year, or come in the form of a windfall on December 31. (As noted above, insurance commissioners have urged the Biden administration to consider ways of providing relief on this issue for the 2020 tax year, given that it was even more challenging than normal to accurately project an annual income during the COVID panemic).
Once you become eligible for an affordable health insurance plan through your employer that provides minimum value, you’re no longer eligible for premium subsidies as of the month you become eligible for the employer’s plan. But premium tax credit reconciliation is done on a month-by-month basis, so as long as your total income for the year is still in the subsidy-eligible range, you’ll almost certainly still be eligible for at least some amount of subsidy for the months when you had a plan that you purchased through the exchange.
Finally, if you’re offered health insurance through an employer that you feel is too expensive based on the share you have to pay, you can’t just opt out, buy your own health plan, and attempt to snag a subsidy. The fact that an affordable plan (by IRS definitions) is available to you renders you ineligible for money toward your premiums. Unfortunately, the cost of obtaining family coverage is not taken into consideration when determining whether an employer-sponsored plan is affordable, which leaves some families stuck without a viable coverage option.
How many people have to repay premium subsidies?
For 2015 coverage, subsidies were reconciled when taxes were filed in early 2016. The IRS reported in early 2017 that about 3.3 million tax filers who received APTC in 2015 had to repay a portion of the subsidy when they filed their 2015 taxes; the average amount that had to be repaid was about $870, and 60 percent of people who had to pay back excess APTC still received a refund once the excess APTC was subtracted from their initial refund. [IRS data for premium tax credit reporting is available here; as of 2019, data had only been reported for the 2014 and 2015 tax years.]
But on the opposite end of the spectrum, about 2.4 million tax filers who were eligible for a premium tax credit ended up receiving all or some of it when they filed their return. These are people who either paid full price for their exchange plan in 2015 but ended up qualifying for a subsidy based on their 2015 income, or people who got an APTC that was less than the amount for which they ultimately qualified. The average amount of additional premium tax credit paid out on tax returns for 2015 was $670.
[The IRS noted that it was very uncommon for people to pay full price for their coverage and wait to claim their full refund on their return: 98 percent of the people who claimed a premium tax credit on their return had received at least some APTC during the year.]
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
The post What happens if my income changes and my premium subsidy is too big? Will I have to repay it? appeared first on healthinsurance.org.
Does the IRS change how much I’ll have to pay for my health insurance each year?
Q. I’ve seen that the percentage of income I have to pay for my health insurance seems to change each year, based on IRS guidance. Does this change the actual amount that I pay for my coverage each year?
A. Maybe. But there’s a lot more to it than just the percentage of income that the IRS says you have to pay for the benchmark plan. It also depends on how your income changes relative to the federal poverty level (FPL, which changes every year), how your health plan’s premium changes, whether you make a change to your coverage during open enrollment, and the fact that you continue to get older each year. Let’s take a look at how it all works:
The ACA has a lot of moving parts. Various aspects of the regulations have to be updated annually, including the affordability rules. Initially, the IRS laid out guidelines detailing the percentage of tax filers’ income that they would be expected to contribute towards their own premiums, assuming their income doesn’t exceed 400 percent of the poverty level. (For premium subsidy purposes, income means an ACA-specific version of modified adjusted gross income, and subsidy eligibility is based on how that income compares with the prior year’s FPL.)
Applicable percentages increased each year from 2015 through 2017
Then in July 2014, the IRS released Revenue Procedure 2014-37, in which they explained the changes to the percentage of income that subsidy recipients would have to pay (known as the applicable percentage) if they selected the second-lowest-cost Silver plan in the exchange in 2015.
A few months later, in November 2014, the IRS published Revenue Procedure 2014-62, which laid out the changes to the applicable percentage for 2016. And in 2016, they published Revenue Procedure 2016-24, which detailed the changes for 2017.
For 2015, 2016, and again for 2017, there was a slight increase in the applicable percentage numbers. Because the applicable percentage climbed each year, there was often an assumption that everyone who gets subsidies was paying more for their health insurance (after subsidies) in each successive year. But that’s not necessarily the case, as we’ll see in a minute.
Applicable percentages decreased for 2018
For 2018, the applicable percentages decreased slightly when compared with 2017, meaning that the percentage of income that people had to pay (after subsidies) for their coverage was slightly lower at all income levels than it was in 2017. (See Revenue Procedure 2017-36 for 2018 numbers.)
This means that before accounting for other factors (including age and income changes), people buying coverage for 2018 had to pay a slightly smaller portion of their income for the second-lowest-cost Silver plan than they paid in 2017.
In 2018, people who were eligible for premium subsidies had to pay between 2.01 percent and 9.56 percent of their income for the benchmark plan in their area. Of course, people don’t have to pick the benchmark plan – they can pick a higher-cost plan and pay more, or they can pick a lower-cost plan and pay less.
Applicable Percentages increased for 2019 to the highest they’ve ever been
For 2019, the applicable percentages went back up again, and were the highest they had ever been. Even though the applicable percentages increased again for 2021, they’re still lower than they were in 2019.
But as described below, people who were subsidy-eligible and whose income hadn’t increased since 2014 were paying less in after-subsidy premiums in 2019 than they were paying in 2014 (assuming they selected the benchmark plan in both years), due to the annual growth in the poverty level since 2014.
The details for 2019’s applicable percentages are in Revenue Procedure 2018-34. For 2019 coverage, people who were eligible for premium subsidies paid between 2.08 percent and 9.86 percent of their income for the second-lowest-cost silver plan, after subsidies.
Applicable percentages decreased again for 2020
For 2020, the applicable percentages decreased again. The details are in Revenue Procedure 2019-29, which was published in July 2019. For 2020 coverage, people who are eligible for premium subsidies paid between 2.06 percent and 9.78 percent of their income, after the subsidy was applied, for the second-lowest-cost silver plan (ie, the benchmark plan).
Applicable percentages increased for 2021
Although they’re still lower than they were in 2019, the applicable percentages are higher in 2021 than they were in 2020. So at each income level, people will pay a slightly larger percentage of their income for the benchmark plan. But again, it’s important to remember that the poverty level also increased (the 2020 poverty level numbers are used for 2021 subsidy eligibility determinations), meaning that you’d have to get a raise in order to remain at the same percentage of the poverty level. If you don’t get a raise, your income as a percentage of the poverty level would be lower, resulting in a smaller amount that you’d have to pay for your health coverage after the subsidy is applied.
The specifics for 2021 are in Revenue Procedure 2020-36. For 2021 coverage, subsidy-eligible enrollees who buy a plan in the exchange have to pay the following percentages of their income, after the subsidy is applied, for the benchmark plan:
[And on a related note, employer-sponsored plans are considered affordable in 2021 as long as the employee’s portion of the premium, for employee-only coverage (not including family members) doesn’t exceed 9.83 percent of the employee’s household income. This amount is always the same as the applicable percentage for people at the highest end of the subsidy-eligible income range.]
Making sense of applicable percentages
Those numbers might make your eyes glaze over. But the following examples will show how they actually affect premiums from one year to the next. The first set of examples show how Bob’s premiums changed from 2014 to 2021, if his income increases each year to keep pace with increases in the federal poverty level. Below that, you’ll see what happens if Bob’s income hasn’t increased since 2014. Yes, there’s math involved, but never fear — it’s pretty straightforward.
Example: Bob’s premium changes from 2014 to 2021, if he gets annual raises that keep his income at 200% of the poverty level
Bob’s MAGI (modified adjusted gross income as calculated for the ACA’s premium tax credits) is equal to 200 percent of poverty. In 2014, his applicable percentage was 6.3 percent, for 2018, it was 6.34 percent, for 2019, it’s 6.54 percent, for 2020 it was 6.49 percent, and for 2021, it’s 6.52 percent, assuming that he gets a raise each year so that his MAGI remains at 200 percent of poverty throughout that time frame.
For subsidy purposes, poverty level determinations are based on the year during which open enrollment begins. Since the open enrollment period for 2021 coverage took place in 2020, the government uses 2020 poverty level guidelines for determining subsidy-eligibility for any plans that have 2021 effective dates. (poverty level numbers are published by HHS in January each year, but that’s after open enrollment for that year’s coverage has already ended).
2014: $1,448 in premiums, with an income of $22,980
If Bob was earning 200 percent of poverty level when he got his 2014 plan, his MAGI was $22,980 (based on the 2013 poverty level) and his applicable percentage (the amount he had to pay for the second-lowest-cost silver plan) was 6.3 percent. So he had to pay $1,448 in annual premiums in 2014 ($22,980 x 0.063). His subsidy paid the rest of the premium, assuming he selected the second-lowest-cost silver plan (ie, the benchmark plan).
2018: $1,529 in premiums, with an income of $24,120
But for 2018, if Bob was still earning 200 percent of poverty level, his MAGI had increased to $24,120, since the poverty level has increased. His applicable percentage was 6.34 percent, which equaled $1,529 in annual premiums ($24,120 x 0.0634). That’s about $81 more in annual premiums than he had to pay in 2014. But in order to maintain his percentage of poverty level at 200 percent, he’s earning $1,140 additional dollars per year.
So while his net premium had increased, his income was also increasing (and note that this is comparing his premiums in 2014 with his premiums in 2018; if we just look at 2017 versus 2018, the slight decrease in the applicable percentage for 2018 nearly exactly offsets the increase in the poverty level, making his net premium just about exactly the same in 2018 as it was in 2017).
2019: $1,588 in premiums, with an income of $24,280
For 2019, the applicable percentage increased again, and the poverty level has also increased. (2018 poverty levels were higher than they were for 2017.) If Bob is still earning 200 percent of the poverty level when he signs up for 2019 coverage, it means his income has grown to $24,280. He’ll have to pay 6.54 percent of that for the second-lowest-cost Silver plan, which will come to $1,588 in annual premiums ($24,280 x 0.0654). So Bob is paying $140 more in annual premiums in 2019 than he was paying in 2014 — but his income is $1,300 higher than it was in 2014, since we’re assuming he’s stayed at 200 percent of the poverty level.
2020: $1,621 in premiums, with an income of $24,980
For 2020, the applicable percentage decreased, but the poverty level continued to increase. To keep Bob at 200 percent of the poverty level, his income had to grow to $24,980 for 2020 (based on 2019 poverty level numbers, since that’s what’s used for the 2020 coverage year). He’ll pay 6.49 percent of his income for the benchmark Silver plan, which will amount to $1,621 in annual net premiums. That’s $33 more in annual premiums than he paid in 2018, and $173 more than he paid in 2014. But his income in 2019 is $2,000 higher than it was in 2014.
2021: $1,664 in premiums, with an income of $25,520
For 2021 coverage, both the applicable percentage and the poverty level are higher than they were for 2020 coverage. For Bob’s income to stay at 200 percent of the poverty level, it had to increase to $25,520 in 2021. And he’ll have to pay $1,664 in after-subsidy premiums for the benchmark silver plan, since that’s 6.52 percent of his income. So his net premiums for the benchmark silver plan will amount to $43 more in 2021 (compared with what he had to pay in 2020), but his income has increased by $540.
What if Bob doesn’t get a raise?
But what if he doesn’t get a raise, and his MAGI is still $22,980 in 2021? That means his income will be 180 percent of poverty level, instead of 200 percent, so his applicable percentage will be less than the 6.52 percent that would have applied if his income had grown to keep pace with the increases in the poverty level ($22,980 divided by $12,760 is 1.8; that means Bob’s income is 180 percent of the 2020 federal poverty level, which we use to calculate 2021 subsidy eligibility).
The calculation
To calculate applicable percentages for incomes that are somewhere within each range on the chart, you can use the formula that’s explained in CFR 1.36B-3. (Scroll down to just underneath the applicable percentage chart, and look at example 2.) In the case of Bob, it looks like this:
Part 1
180 – 150 = 30
200 – 150 = 50
30/50 = 0.6
Basically, you look to see what income range you’re in. (Bob is between 150 and 200 percent of poverty range.) Then you just figure out how far along the income range you are. In this case, Bob’s income is 60 percent of the way along the range that goes from 150 to 200 percent of poverty.
Part 2
6.52 – 4.14 = 2.38
2.38 x 0.6 = 1.43
4.14 + 1.43 = 5.57
The second part of the calculation is to look at the applicable percentage range for 2021 coverage that corresponds to Bob’s income range (4.14 to 6.52 percent — meaning that the percentage of income he’ll have to pay for the second-lowest-cost silver plan is somewhere between those two percentages). And then you just figure out what number is 60 percent of the way along that applicable percentage range. In Bob’s case, it’s 5.57 percent.
His applicable percentage for 2021 is 5.57 percent, and his net premium (after his subsidy is applied) is actually lower in 2021 than it was in 2014. It ends up being 5.57 percent of $22,980, which is $1,280 in annual premiums. That’s about $168 less than he had to pay in 2014 for the second-lowest-cost Silver plan.
In 2020, with the same $22,980 income, Bob would have been at 183 percent of the poverty level and his applicable percentage was 5.68 percent. So his net premium for the benchmark silver plan was $1,305 in 2020 — lower than it was in 2014, 2018, and 2019. And as we saw above, it’s even lower in 2021, despite the fact that the applicable percentages increased across all income levels. Despite the increase in the applicable percentage, Bob would still see a decrease in the total dollar amount that he has to pay for the benchmark silver plan in 2021. Because Bob’s income hasn’t kept pace with the poverty level, the amount he has to pay in net premiums is declining over time.
Applicable percentages increased for 2019 and again for 2021, but so did the poverty level – and you have to consider them together
There are a lot of moving parts here. Although the applicable percentages for 2019 were the highest they’ve been since this system was implemented (and increased from 2020 to 2021, albeit not quite to 2019 levels) the poverty level has continued to increase each year. So people whose incomes have not increased in several years could find that they’re paying less in total premiums in 2021 than they were paying a few years earlier.
How the applicable percentage is calculated — it’s changed a bit in recent years
The general idea behind the adjustment to the applicable percentage table is to keep up with changes in premium growth as they relate to changes in income. If health care costs increase faster than income, we all have to pay a larger chunk of our income for health care. But if the economy does well and the ACA’s efforts to curb healthcare spending are successful, it’s also possible for the applicable percentage to decrease — as was the case for 2018 and for 2020.
The formula for the adjustment to applicable percentage is just premium growth since 2013 divided by income growth since 2013. But the methodology for calculating each of those numbers has changed over time.
Premium growth used to be based on average per-enrollee premiums for employer-sponsored plans, in terms of how much those premiums had changed since 2013. But for 2020, HHS finalized a methodology change that incorporates premium changes in the individual market, as well as premium changes for employer-sponsored plans.
This was widely expected to result in an increase in applicable percentages for 2020, but when the numbers were published in July 2019, the applicable percentages for 2020 were lower than they had been for 2019 (without the methodology change, applicable percentages would likely have decreased even more for 2020, as the estimation was that they would be 2.7 percent higher in 2020 with the new calculations that incorporate premium changes in the individual market).
Income growth was based on changes in GDP per capita for plan years 2014 through 2016, but HHS finalized a new formula that has been used to calculate income growth since 2017. The new formula calculates income growth based on per-capita personal income (PI) rather than per-capita GDP. The two methods would likely generate similar numbers, but HHS considers per-capita PI changes to be a more accurate reflection of how per-capita income changes from one year to the next.
The IRS also added a provision that allows for an additional adjustment for years after 2018 to reflect the premium growth rate relative to the growth in the consumer price index [the additional adjustment is described in §36B(b)(3)(A)(ii)(II)]. But the next section in that code [§36B(b)(3)(A)(ii)(III)] says that the additional adjustment is only needed if the total amount the government spent on premium subsidies and cost-sharing reductions in the previous year was more than 0.504 percent of the previous year’s gross domestic product. For 2019, 2020, and again for 2021, the IRS determined that the additional adjustment is not necessary.
Since subsidies are also a function of the poverty level — which generally adjusts upward each year — there’s a built-in factor that essentially ensures that people who are impacted by a higher applicable percentage are also enjoying at least a modest increase in income that outweighs the additional premiums.
Average benchmark premiums dropped in 2019, 2020, and 2021 so subsidies are smaller
Premium subsidy amounts are based on the relationship between an applicant’s income and the federal poverty level, but they’re also highly dependent on the premium that the applicant would have to pay for the benchmark plan. The formula described above is how subsidy amounts are determined in every state (keeping in mind that Alaska and Hawaii have their own poverty level numbers).
But what if you don’t buy the benchmark plan? Many areas have dozens of plans available for sale in the exchange, and only one of them is the benchmark plan (it changes from year to year, but it’s always the second-lowest-cost silver plan). If you buy a plan that’s not the benchmark plan and you’re eligible for a subsidy, you still get the same subsidy amount that you’d have received if you had purchased the benchmark plan, but it’s applied to the price of the plan you select instead.
Nationwide, overall average premiums in the individual market increased slightly in 2019, decreased slightly in 2020, and increased slightly in 2021 (overall, premiums are much more stable than they were in 2017 and 2018, when they grew rapidly in most areas). But average benchmark premiums have decreased in all three years. The decrease in benchmark premiums happened in some areas because an existing insurer lowered their rates, but in other areas it’s because a new insurer joined the market and began offering lower-priced silver plans than the ones that were already available.
Since premium subsidy amounts are based on the cost of the benchmark plan’s premium in each area, it’s not surprising that premium subsidy amounts have been dropping over the last few years. Across all HealthCare.gov enrollees who are receiving premium subsidies, the average subsidy amount was $550/month in 2018, dropped to $539/month in 2019, and dropped again, to about $492/month in 2020.
But as we saw above, the whole point of premium subsidies is to cover the difference between the actual cost of the benchmark plan and the amount the enrollee is expected to pay for that plan based on a specific percentage of their income. So even if the amount the enrollee is expected to pay remains unchanged, the premium subsidy amount will go down if the full-price cost of the benchmark plan goes down. For some enrollees, premiums are higher in 2021, but other enrollees have lower premiums in 2021 — and there are several factors involved in how much the net premium changes.
The best course of action is to actively shop for your coverage each year during open enrollment. Never let your plan automatically renew without checking first to make sure that it’s still the best option. And if you become eligible for a special enrollment period mid-year due to a qualifying event, make sure you actively compare all of the plans available to you before making a decision about whether to keep your existing coverage or make a change.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
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If I can’t buy a short-term plan and I don’t have a qualifying event, what are my coverage options?
Q: There are no short-term health plans for sale in my state and I don’t qualify for a special enrollment period for ACA-compliant coverage. Is my only option to go without coverage until next year?
A: Although the Trump administration relaxed the rules for short-term plans in 2018, states can continue to impose their own rules for short-term plans, and the majority of the states have done so.
As of early 2021, there are no short-term plans available for purchase in California, Colorado, Connecticut, Hawaii, Maine, Massachusetts, New Jersey, New Mexico, New York, Rhode Island, and Vermont. In each case, it’s because state laws either prohibit this type of coverage altogether, or because the state’s laws are strict enough that short-term insurers have chosen not to offer coverage.
No short-term plans for sale?
So what are your options if you’re not eligible to enroll in an ACA-compliant plan and short-term plans are not for sale in your area? This is a tough situation. In terms of getting real major medical health insurance, you’ll have to wait until open enrollment to sign up, with coverage effective next January (unless you’re Native American, in which case you can enroll at any time).
Of course, if you or your spouse become newly eligible for an employer-sponsored plan between now and then, you could enroll in that plan as soon as you become eligible. If you become eligible for Medicaid or CHIP, you can enroll anytime, and if you’re gaining eligibility for Medicare, you’ll have a seven-month window during which you can enroll.
Otherwise, your options are very limited but not necessarily nonexistent. Depending on where you live, how healthy you are, and various other factors, you may be able to enroll in some type of limited coverage. It won’t be real health insurance, but it might end up being better than nothing.
Healthcare sharing ministry plans
If your lifestyle is compatible with the requirements for healthcare sharing ministries, this might be an option that will provide at least some level of coverage until you can enroll in a health insurance policy.
However, it’s important to understand that healthcare sharing ministries are not health insurance. The “coverage” they provide isn’t backed by any sort of guarantee, and consumers have fairly limited recourse if they run into problems with the sharing ministry plan.
Although no sharing ministry plan is actually providing real insurance coverage, some sharing ministry plans are less reputable than others and it’s important to do your homework if you’re considering a sharing ministry plan as a last recourse.
Fixed-indemnity plans
Fixed-indemnity plans are exempt from ACA regulations, and they’re often conflated with short-term health plans. But they are a very different type of coverage.
Short-term plans tend to be somewhat similar to the sort of coverage that was available in the individual major medical market prior to 2014 (before the ACA reformed that market and added numerous consumer protections). Fixed-indemnity plans, however, tend to provide much less coverage.
Instead of a deductible, coinsurance, and capped out-of-pocket costs, a fixed-indemnity plan operates from the perspective of limiting how much the insurance company has to pay, rather than limiting how much you have to pay. (To be clear, short-term health plans don’t entirely limit how much you have to pay either, since they have annual and lifetime benefit limits.)
So fixed indemnity plans will have a schedule of benefits that the policy will pay for certain services. For example, they might pay $1,000 for each night you spend in the hospital, and $1,500 for a surgery and $50 for an office visit. The amounts vary from one plan to another, but the point is that the benefit amounts are laid out in the policy itself, regardless of how much the services actually cost.
So if your fixed indemnity plan will pay $1,500 for a night in the hospital and you end up getting a bill for $15,000 after spending one night in the hospital, you’re going to be on the hook for the other $13,500. (Depending on the plan, you may receive fixed reimbursement amounts for other services performed while you were in the hospital.)
A fixed-indemnity plan should not be considered a substitute for health insurance and it’s absolutely not something that you should rely on long-term. But if you find yourself in a position where there is literally nothing else you can buy, it could end up saving you some money if you need medical care, so it’s arguably better than nothing. And there are fixed-indemnity plans for sale in many of the states where there are no short-term plans available.
Direct primary care
Depending on where you live, you may be able to find a primary care doctor who offers services through a direct primary care plan. These plans will help to keep your costs for primary care steady and predictable, but they won’t cover you if you need medical treatment beyond what can be provided in a primary care setting.
So while they are not a substitute for health insurance, you might gain some peace of mind by enrolling in a direct primary care plan while you wait to enroll in a real health insurance policy.
Community health centers
If you have no realistic option for health insurance coverage, you may still be able to access health care, for free or on a sliding scale basis, at a community health center or charitable clinic. Health centers provide primary care, but clinics in some locations can also provide additional services, including dental care, prescription drugs, and mental health care.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
The post If I can’t buy a short-term plan and I don’t have a qualifying event, what are my coverage options? appeared first on healthinsurance.org.
Did health insurance premiums go up or down for 2021?
Q. I’ve seen a lot of differing headlines about health insurance rates for 2021 – some say rates increased, some say they decreased. Can you shed some light on this? Do these rate changes apply to everyone?
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A. The vast majority of Americans get their health insurance either from an employer or from the government (Medicare, Medicaid, CHIP, TRICARE, VA, IHS). The rate changes that have been making headlines each fall for the last few years are for the individual market, which only accounts for about 4.2 percent of the population.
Do rate change headlines apply to all types of health insurance coverage?
When you see headlines about health insurance premium increases or decreases, the stories are typically about individual-market – and ACA-compliant – health insurance. The headlines aren’t referring to government coverage, or pre-ACA plans still in force.
More specifically:
Headlines about rate increases (or decreases)
If you have an individual/family major medical health insurance plan, purchased on-exchange or off-exchange, that became effective January 2014 or later, it’s compliant with the ACA. The annual rate changes for these plans have been making headlines for the last several years, but the actual rate changes that apply to each enrollee’s premiums differ significantly because there are so many factors involved.
Here are some things to keep in mind:
What’s the biggest factor when it comes to premium increases?
The biggest factor is whether or not you get premium subsidies. If you don’t get a subsidy (which is the case for about 14 percent of exchange enrollees nationwide – plus everyone enrolled in off-exchange plans), your rate changes are pretty straightforward and just depend on how much your insurer is changing the premium for your plan next year.
Of course, you also have the option to shop around during open enrollment and select a different plan with a different premium.
But if you do get a subsidy, your rate change depends on multiple factors: How much your plan’s price changes, how much your area’s benchmark plan price changes (keeping in mind that the benchmark plan isn’t necessarily the same plan from one year to the next), as well as things like changes in your income and family size.
Because average benchmark premiums decreased for 2021, average premium subsidies are a little smaller in 2021 than they were in 2020 (and since the average benchmark premiums have decreased three years in a row, average premium subsidies have also decreased three years in a row). But that doesn’t mean your subsidy is smaller, since there’s a lot of variation from one area to another, and because your specific subsidy also depends on your own income, which can change from one year to the next.
And it’s important to keep in mind that although average benchmark premiums (on which subsidy amounts are based) decreased slightly for 2021, average premiums across the whole individual market increased slightly. So it was common for 2021 to see people who get premium subsidies ending up with an small overall average increase in their premiums for 2021 – assuming they weren’t enrolled in the benchmark plan in both years (the subsidies are designed to closely offset rate changes for the benchmark plan) or willing to switch to a lower-cost plan for 2021.
If you’re in an area where the benchmark premium decreased significantly, you may have found that your after-subsidy premium ended up increasing significantly, which can be disconcerting after you’ve seen headlines about rate decreases. This is what happened in some parts of Colorado in 2020, for example. And it can also happen in areas where a new insurer moves into the area and undercuts the previous benchmark plan; there are at least 20 states with new insurers for 2021 and numerous other states where existing insurers expanded their coverage areas.
Can you avoid health premium increases?
No matter what, you need to carefully compare your options when you enroll.
If you’re eligible for a premium subsidy, you need to shop in the exchange in your state. (Use our calculator to get an idea of whether you’re subsidy-eligible – it only takes a minute to find out. And make sure you understand what counts as income under the ACA and how you might be able to adjust yours to make yourself eligible for a subsidy.)
And if you currently have a plan you purchased outside the exchange, be sure to double-check your on-exchange options for next year before deciding whether to renew your off-exchange plan. And keep in mind that as the poverty level numbers increase each year, the limits for subsidy eligibility go up as well. In 2014, a family of four had to have a household income of no more than $94,200 in order to get a subsidy. For 2021, that number is nearly $105,000.
If you have a grandmothered or grandfathered plan and your insurer is letting you renew it, be sure to carefully compare it with the ACA-compliant options that are available to you. Consider the benefits as well as the premiums, and know that you’ll also qualify for a special enrollment period during which you can pick an ACA-compliant plan to replace your existing coverage, instead of renewing it.
So did health insurance premiums increase for 2021?
The answer is … it depends. It depends on where you live, what plan you have, whether you changed plans during open enrollment, and whether you get a premium subsidy. And if you do get a subsidy, there are several variables that go into how much your rates might have changed.
So ignore the headlines. Each year, focus on the plans that are available to you and see how your premium and out-of-pocket costs might change if you select a different plan versus keeping the one you have.
Thanks to the ACA, you have the option to shop from among all of the available plans in your area each year, regardless of whether you have health conditions or not (prior to the ACA, people in most states had limited access to new health plans in the individual market if they had pre-existing conditions).
The initial transition to ACA-compliant plans
The ACA makes health insurance available to anyone who applies (no more underwriting rejections or rate-ups) and subsidizes the cost for people who need it the most.
Some people who don’t get a premium subsidy saw sharp rate increases in 2014, with the transition to a guaranteed-issue market and plans that cover the essential health benefits. But even among people who pay full-price for their coverage, some enrollees may have experienced a rate decrease when they switched to an ACA-compliant plan, even without a subsidy. That could be the case for a variety of populations:
Who’s paying more? Who’s paying less?
There are some people who are paying quite a bit more for their health insurance now that the ACA has been implemented: primarily enrollees who are younger, healthy, had plans with high out-of-pocket exposure prior to 2014 (potentially higher than the ACA now allows, like a $10,000 individual deductible, for example), and also have incomes high enough to make them ineligible for subsidies.
However, there are plenty of people who are ineligible for subsidies who don’t fall into those other categories. For them, there hasn’t been as much in the way of “rate shock” over the last few years, and they might have ended up with a better deal starting in 2014, even without accounting for subsidies.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
The post Did health insurance premiums go up or down for 2021? appeared first on healthinsurance.org.
The federal exchange option
The federal health insurance marketplace (HealthCare.gov) opened for business in the fall of 2013, and has provided an affordable health insurance shopping platform for millions of Americans. Admittedly, the federal exchange – along with many of the state-run exchanges – got off to a very rocky start in October 2013. But by December of that year, things were working better, and the exchange has been quite functional ever since.
In 2014, there were 191 health insurers selling policies on the federal exchange in 36 states (including states with partnership exchanges, as well as Idaho and New Mexico, both of which had federally supported state-based marketplaces in 2014). In September 2014, HHS issued a report on carrier participation for 2015, noting that the federally run exchange would have 57 additional insurers in 2015 – a 30 percent increase over the prior year. The number of participating carriers remained very stable in 2016; HHS reported that 238 carriers were offering plans across the states that use Healthcare.gov in 2016.
However, there was a widespread exodus of insurers leaving the exchanges nationwide for 2017 and again for 2018. By 2018, only 132 insurers were offering health plans through HealthCare.gov. But that trend then began to reverse itself, with insurers joining the marketplaces in many states for 2019, 2020, and 2021. As of 2021, there are 181 insurers offering plans through HealthCare.gov, despite the fact that the platform is now being used by only 36 states, after Pennsylvania and New Jersey transitioned to their own enrollment platforms in the fall of 2020.
During the open enrollment period for 2021 coverage — which ended in mid-December 2020 in states that use HealthCare.gov — more than 8.25 million people enrolled in plans through the federally-run exchange. Most of these enrollees receive premium subsidies that make their coverage much more affordable than it would otherwise be.
In addition, millions of people have enrolled in Medicaid through the federally run exchange, including many who are newly eligible due to Medicaid expansion (14 states have opted not to expand Medicaid however, and all of them are states that use the federally run exchange; Oklahoma and Missouri will both expand Medicaid in mid-2021).
Healthcare.gov does the heavy lifting
There are 24 states that have a fully federally run exchange (five of them provide plan oversight for the plans sold through the exchange: Kansas, Montana, Nebraska, Ohio, and South Dakota).
In addition, another six states (Delaware, Illinois, Iowa, Michigan, New Hampshire, and West Virginia) have established partnership exchanges, working together with the federal government to run the exchange. They use HealthCare.gov for enrollment, but the states also take on varying levels of plan management, consumer assistance, and outreach. The partnership states are counted together with the other 24 states, with all 30 states considered to be relying fully on the federally run exchange.
Some of the state-run exchanges also use HealthCare.gov for enrollment. Prior to the 2013 launch of the exchanges, some states wanted to operate their own exchange, but weren’t able to get an enrollment platform up and running in time. Idaho and New Mexico both opted to establish federally-supported state-based exchanges for 2014, meaning that while their exchanges were run by the state, they were using the Healthcare.gov enrollment platform, just like the states that rely fully on the federally run exchange.
Ultimately, Idaho was able to transition to running its own exchange by the time the second open enrollment period began in the fall of 2014. New Mexico opted to continue to use Healthcare.gov as a supported state-based marketplace, but plans to have its own website up and running by the fall of 2021.
As described here, there have been several changes to the approaches that states use in the ensuing years, and additional changes planned for the future. As of 2021, Arkansas, Kentucky, Oregon, New Mexico, Maine, and Virginia have state-run marketplaces but use the HealthCare.gov enrollment platform. Utilizing Healthcare.gov’s economies of scale and technologically smooth enrollment software simply proved to be a better choice than operating their own enrollment platform. But some of them are actively working towards running their own enrollment platforms in order to take advantage of the flexibility and control that provides.
All told – including states with partnership exchanges and federally supported state-based exchanges – Healthcare.gov is used in 36 states as of the 2021 plan year.
A changing carrier landscape
Prior to 2014, many people looking to buy individual health insurance had few options. A 2011 study by the Kaiser Foundation found that the individual insurance market was dominated by a single insurance company in 30 states and the District of Columbia.
The American Medical Association (AMA) also conducted a series of studies analyzing competition among health insurers, and found similar results. A 2012 AMA study determined that in nearly 40 percent of US metropolitan areas, a single insurance company had at least half of the market share. The same study also found that a single carrier had at least 30 percent of the market share in nearly nine out of ten U.S. markets.
Although 2014 ushered in a new era of guaranteed-issue individual health insurance – a dramatic change from the medically underwritten markets that existed in most states prior to 2014 – some states still had relatively few carriers offering coverage, particularly in the exchange.
In 2014, West Virginia and New Hampshire had only one participating exchange carrier, and several other states – Alabama, Wisconsin, North Carolina, Florida, Mississippi, and Arkansas – had only one carrier in at least a portion of the state (all eight of those states either rely fully on the federally run exchange, or have a partnership exchange model). In 2015, West Virginia still had just one carrier, although they gained a second carrier in 2016. New Hampshire now has three exchange carriers (although they had reached a high of five in 2015), and the other six states each gained at least one additional exchange carrier in 2015.
But carrier participation started to decline in 2016, and large swaths of the country had just one insurer offering coverage through the exchange by 2018. UnitedHealthcare, Humana, Aetna, Cigna, and Anthem all scaled back their exchange participation in 2017 or 2018.
Insurers started to join or rejoin the exchanges in 2019. By 2021, every state in the country (including those that use HealthCare.gov and those that run their own exchange platforms) had at least two participating insurers, although there are still some rural areas of some states where only one insurer offers plans in the marketplace (this brief from CMS shows how insurer participation changed in each county for 2021 in the states that use HealthCare.gov).
Long-term success
Healthcare.gov was created to fill a need when more than half the states decided that they didn’t want to run their own exchanges – either because they didn’t think it would be financially or technologically feasible, or because they were simply opposed to the ACA and didn’t want to participate in any activities that helped to implement the law.
But with eight years of enrollment in the books and many hurdles overcome, Healthcare.gov has proved to have staying power, and has also become a feasible solution for states that have run into problems with their own exchanges. In late 2013, the federal exchange’s glitchy website was the butt of many jokes and the cause of many headaches. But it has become an integral part of the individual health insurance market in two-thirds of the states. And while the Trump administration sharply reduced funding for HealthCare.gov’s outreach and enrollment support, the Biden administration could restore that funding.
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