Today the New York State of Health Marketplace announced which health insurance carriers will be offering plans on the Marketplace for 2016. This encompasses Qualified Health Plans for both individuals and small businesses, the new Essential Plan, and stand-alone dental plans.
The 200,000 individuals who hold policies with Health Republic will have to go shopping for new plans when Open Enrollment begins on November 1st. The CO-OP is winding down operations and no longer issuing renewals. The good news is that sixteen carriers will offer individual QHPs in 2016, and eight for the Small Business Marketplace (SHOP). The definition of a small business is new for 2016: firms with 100 or fewer full time equivalent employees can use SHOP – up from 50 employees in 2015.
While insurers and consumers alike are new to the Essential Plan, there is a strong show of support with 13 carriers offering plans for 2016. Consumers can use this interactive map to see which plans are offered in their county. Some counties, like the Bronx, have eight plans on offer, while New Yorkers in other counties, like Putnam and Schoharie, will only have one plan option if they qualify for the Essential Plan.
The stand-alone dental market is largely the same as 2015, with 11 carriers offering plans, 3 of which offer plans in every county in the state. The maps for dental, individual, and small business plans are available here.
The majority of non-elderly Americans get their health coverage through employer sponsored plans, but the ways those plans provide financial protection is changing. According to a new survey by the Kaiser Family Foundation, employers are increasingly relying on cost-shifting through high-deductible plans, higher premiums, and plans with larger co-pays. That means workers and their families have more to lose when healthcare costs spike.
Tools such as price transparency calculators and employee wellness programs are growing in popularity as consumers are pushed to treat healthcare purchasing decisions more like other household expenses. It may pay to shop around and avoid unnecessary office visits or procedures, but healthcare costs are not like other household purchases. Price tags don’t always communicate value, and high quality care is not one-size-fits-all. For some consumers paying more to get the care that suits their needs is the only viable option. The rise of narrow networks, which offer few choices of providers and hospitals in an effort to curb costs to insurers, exacerbates the problems these consumers face.
With wages increasing slowly, consumer advocates are on the alert for healthcare costs that prevent workers from seeking necessary, high-quality care. Nobody should forgo a trip to the doctor when they’re ill because they can’t meet their deductible or afford the copay. The American narrative of employer sponsor health insurance only works if employees aren’t impoverished the moment they need services.
The ACA makes insurance more affordable for people through a cost-sharing reduction (CSR) benefit. CSRs are available to consumers with incomes between 138% and 250% of the Federal Poverty Line ($27,311 to $49,475, for a family of three) who purchase Silver level plans. CSRs are sliding scale discounts on cost sharing, including deductibles, co-pays, and co-insurance. New analysis from Washington D.C.-based Avalere Health of nationwide Marketplace enrollment for 2015 shows that only 73% of enrollees eligible for cost-sharing reductions chose Silver level plans. Thus 2.2 million consumers forfeited this benefit.
According to Avalere’s analysis, “consumers may not be aware that CSRs are available and the benefits they offer. ‘Additional consumer education and more sophisticated decision support tools are likely needed to ensure that all patients are accessing the benefits available under the Affordable Care Act,’ said Elizabeth Carpenter, vice president at Avalere. ‘Specifically, consumers need tools that highlight the tradeoff between monthly premiums and out-of-pocket costs and demonstrate the benefits of cost-sharing reductions.’”
In New York, however, 78% of eligible enrollees chose plans that came with CSRs – 5% better than the national average. New York also saw a steep curve between the three CSR tiers: 97% of those eligible for the highest level of CSR subsidy – 94% actuarial value – enrolled in Silver plans; but only 62% of people eligible for the lowest level of CSR subsidy – 73% actuarial value – enrolled in Silver plans (see graph below). This suggests that New York consumers are making strategic enrollment decisions. New York’s 11,000 assistors, who disproportionately serve consumers with lower incomes, are likely a part of our success story.
New York’s data also suggest that consumers eligible for the lowest level CSRs (CSR-III) – with a $1200 deductible – may still face affordability problems. These consumers may be choosing Bronze level plans to save money on premiums, or they may forgo CSRs altogether and “buy up” to Gold level plans.
Come 2016, consumers in the CSR-I and CSR-II bands will qualify for the Essential Plan (EP), which will have very low cost or no cost premiums and minimal cost sharing. This may underscore the affordability issues facing consumers eligible for the CSR-III subsidies, earning between $39,581 and $49,475, for a family of three.
The New York State Department of Financial Services (DFS) released its final decisions on the rate review process (Don’t remember what that is? Check out our blog post about it here). The 17 carriers on the individual insurance exchange were approved for a weighted average premium increase of 7.1%, which is 3.3% lower than requested by the plans. These figures mask considerable variation among plans; Health Republic, Empire HMO, Emblem HIP, and MVP Health Plan were all approved for double digit rate increases, while United and Oxford OHP had their requests cut by 20.4% and 17.6%, respectively. New York’s individual market has more choices than most other states, so it behooves consumers to shop around to get the best deal for themselves and their families in this upcoming open enrollment period, beginning November 1, 2015.
While the New York State Health Plan Association condemned DFS’s approved rates as too low, their customers can’t help but compare their 7.1% increase to the much lower 4% rate increase California allowed for 2016. As HCFANY described in its rate comments, New York’s proposed and now adopted rate increases exceed the national rate of medical cost inflation predicted by independent analyses; considerably exceed growth in wages, according to the most recent Employment Cost Index released by the Bureau of Labor Statistics; and they are significantly higher than the average rate increase of 5.7% approved by DFS last year.
We recognize that some plans had seriously underpriced premiums in the past and are facing financial difficulties. DFS has a challenging balancing act to perform. DFS correctly notes that its rate reductions will still keep premiums 50% lower than they were before the launch of the New York State of Health marketplace. All told, the prior approval process will save New York consumers $430 million in premiums for 2016. Unfortunately, the price hikes will still hurt.