Last week, Covered California released the 2019 health plan choices and rates for small businesses and their employees. On average, premiums in 2019 will increase 4.6 percent over 2018, the smallest year-over-year increase since the marketplace’s inception in 2014. Plan offerings for 2019 include two preferred provider organization plans from Blue Shield of California and Health Net; two health maintenance organization plans (Kaiser Permanente and Blue Shield); Chinese Community Health Plan in San Francisco; and Sharp Health Plan in San Diego. Health Net will launch new offerings in the final quarter of 2018.
Currently, more than 47,000 individuals have insurance through Covered California for Small Business. Since last year, membership has grown 33 percent — by approximately 12,000 individuals. As a result of this growth, it is one of the largest small business health options programs in the nation.
CHA has developed a web page to help hospitals and their staff understand California’s health insurance marketplace. Resources include publications and other educational tools for hospitals, such as a summary of Covered California’s 2018 individual health insurance plans, fact sheets on Covered California and Medi-Cal expansion, and enrollment strategies for assisting patients who wish to obtain coverage in the Covered California marketplace. The page also provides links to regulations that govern the state-based exchange, as well as previously recorded CHA webinars that address delivery system reform, assisting individuals in obtaining coverage, employer benefits under the Affordable Care Act and the California Health Benefit Exchange.
Covered California will host a Plan Management and Delivery Systems Reform Advisory Group webinar Sept. 6 from 10 a.m. – noon (PT). The health plan advisory group provides input to the Covered California board and staff on qualified health plan contracting strategies, ongoing benefit design issues and strategies to promote health care value and drive delivery system reform.
The Sept. 6 meeting is scheduled to include discussions about the Covered California Quality Rating System for 2019 open enrollment, plan selection decision support tools and future capabilities, benefit design for the 2020 plan year, a subcommittee update on Assembly Bill 1810 (Chapter 34, Statutes of 2018) affordability reporting requirements and stakeholder survey results, and next steps. For more information, participants can register and find meeting materials in advance of the webinar online. A meeting agenda is attached.
Last week, Covered California released its 2019 rate book, which provides information on plans and rates for the upcoming year. Covered California has tentatively selected 11 health insurance companies that will be available for enrollment starting Oct. 15 for coverage that begins on Jan. 1, 2019. The overall weighted average rate change for existing consumers who renew coverage in the same plan will be 8.7 percent. Net premiums — the amount consumers pay out of pocket, after subsidies — will rise an average of 6 percent. Notably, elimination of the individual mandate penalty has prompted carriers to add between 2.5 and 6 percent to their rates, with an average of 3.5 percent, to account for a potentially less healthy and more costly consumer pool. Without elimination of the penalty, Covered California’s rate change would be closer to 5 percent.
Today, Covered California released information on rates and carrier participation for the 2019 plan year, announcing that the weighted average statewide rate will rise by 8.7 percent, lower than in previous years. The price of coverage will vary by health plan and region, as outlined in Table 2 of the attached press release. Additionally, all 11 health insurance carriers will return in 2019. The vast majority of consumers — 96 percent — will be able to choose from two or more health insurance companies, while 82 percent will be able to choose from three or more. Covered California notes that consumers who shop and switch to the lowest-priced plan in the same metal tier could see an average rate change of negative 0.7 percent.
Although the statewide rate change will be 8.7 percent, Covered California enrollees who receive federal financial assistance to pay their premiums — accounting for 88 percent of Covered California’s enrollment — will pay an average of only 6 percent more next year, because federal premium assistance rises along with rates.
Carriers added between 2.5 and 6 percent to their rates for 2019, for an average of 3.5 percent, in response to concerns that eliminating the individual mandate penalty would lead to a less healthy and costlier consumer risk pool. Covered California estimates the 3.5 percent average increase added to the rates will increase Californians’ spending on their health care coverage by more than $400 million in 2019. Subsidized consumers will be protected from this increase, and because the amount of financial help they receive will also increase, the federal government will pay an estimated $250 million more in higher tax credits. Unsubsidized consumers both on and off the exchange will bear the full brunt of the increase.
California’s individual market risk score is about 20 percent lower than the other states’ average risk score from 2015 through 2017.
Covered California’s risk scores are lower than the national average across every metal tier for each of the three years examined.
California’s off-exchange enrollment remained relatively constant from 2015 to 2017, while the rest of the nation’s off-exchange enrollment decreased substantially during the same period. This enrollment represents consumers who enroll outside of state-based exchanges but generally get the same products at the same prices, but without the benefit of a federal subsidy. Because off-exchange enrollees tend to be healthier than average and do not have the federal tax credit to make coverage more affordable, the stability of this enrollment in California is beneficial.
Last week, Covered California released its proposed fiscal year 2018-19 budget, setting an operating budget of $350.2 million and a capital projects reserve of $10 million, with strong investments in marketing and outreach, as well as funding for a new Consumer Experience Division. The proposed budget also lowers, from 4 percent to 3.75 percent, the assessment fees on health plan premiums that provide the entirety of its funding. According to Covered California, the proposal demonstrates ongoing financial stability and invests in key areas that will maintain a stable market.
Along with the budget proposal, Covered California released a PriceWaterhouseCoopers impact analysis of key market factors, including the elimination of the individual mandate penalty, on coverage nationally and statewide. According to the report, which helped to inform Covered California’s planning, eliminating the individual mandate penalty could result in a 5 to 10 percent rise in premiums and a 7 to 26 percent drop in enrollment nationally. Using that analysis, Covered California projects a 7 to 18 percent decrease in enrollment in California, with the “best estimate” being a 12 percent enrollment reduction. The proposed budget also estimates that premiums will grow by 6 percent in 2019. When combined with projected increases in medical cost trend in 2019 and the moratorium of the health insurance provider fee, Covered California’s budget forecasts as its best estimate an overall premium growth rate of 11 percent.
The budget must be approved by Covered California’s governing board and will be voted on at the next board meeting in June.
A new report from the Kaiser Family Foundation examines financial data from 2017 to determine whether recent premium increases were sufficient to bring insurer performance back to pre-Affordable Care Act (ACA) levels. Several insurers’ exits from exchange markets in 2017 led to concerns about individual insurance market stability, compounded by federal debate over the ACA’s repeal. According to the report, the 2017 data offer further evidence that insurers in the individual market are regaining profitability — even as future expectations are clouded by political and policy uncertainty, repeal of the individual mandate penalty as part of tax reform legislation, and proposed regulations to expand loosely regulated short-term insurance plans.
The report examines average premiums, claims, medical loss ratios, gross margins, and enrollee utilization from 2011-17 in the individual insurance market, including coverage purchased through the ACA’s exchange marketplaces and ACA-compliant plans purchased directly from insurers outside the marketplaces, as well as individual plans originally purchased before the ACA went into effect. Generally, insurers saw better financial results in 2017 than in earlier years of the ACA. Absent any policy changes, it is likely that insurers would generally have required only modest premium increases in 2018 and 2019.
Covered California has released a new analysis of enrollment in the federally facilitated marketplace. According to the report, enrollment in the federal marketplace has dropped 9 percent over the past two years, with a nearly 40 percent drop in new enrollment, while enrollment in state-based marketplaces has generally held steady over the same period. An additional 1.6 million unsubsidized Americans also left the off-exchange market over the past two years. The decrease in enrollment coincides with reductions in funding for marketing and outreach for federal marketplace states, which would likely lead to a less healthy risk pool of consumers and higher premiums.
Health Affairs last week published a Harvard Medical School study measuring the potential impact of the federal government’s elimination of the individual mandate penalty. The Congressional Budget Office and the Joint Committee on Taxation estimated that, within one year, its elimination will leave 4 million fewer individuals insured nationwide. However, proponents of the repeal suggested the methodology used to arrive at that estimate overstates the importance of the mandate for coverage.
In its study, Harvard researchers asked a random sample of adult enrollees in the 2017 California individual insurance market about the extent to which eliminating the mandate penalties might have altered their decision to purchase insurance. Key findings include:
18 percent of the enrollees said they would not have purchased insurance in 2017 if the penalty had not existed, indicating a potential result of 378,000 fewer Californians with coverage in the individual market.
Enrollees with the lowest levels of predictable medical spending (healthier individuals) were more likely to say they would not have purchased insurance in 2017 in the absence of a penalty.
Harvard Medical School estimates that, due to elimination of the individual mandate penalty, premiums could increase by an additional 7 percent in California.
A new issue paper from the California Health Care Foundation shows policy avenues the state could take to expand coverage, including establishing a single-payer system, improving affordability of Covered California plans, expanding Medi-Cal to undocumented adults and creating a public coverage option in Covered California. The paper addresses how these approaches intersect with various federal programs and law, as well as legal issues the state and stakeholders would need to consider under each approach. For each approach, the paper outlines respective policy goals, federal authorities invoked and potential pathways to federal approval.
Covered California today issued the attached news release reflecting data from its fifth open enrollment period. Overall, enrollment increased 3 percent over last year, with 423,484 consumers selecting plans; more than 50,000 consumers selected plans in the final three days of open enrollment. Since its inception in 2014, Covered California has served more than 3.4 million consumers. During the most recent open enrollment, 15 percent of new consumers selected a Gold plan — over three times as many as last year. While Gold plans generally have higher premiums, they were a better value for consumers this year because the premium was lower due to the cost-sharing reduction surcharge added only to Silver plans.
Covered California has released the attached document answering frequently asked questions related to recent federal action eliminating the Affordable Care Act’s individual mandate penalty in 2019. The document answers some of the questions consumers may have and includes a table outlining the timeline for when the individual mandate penalty applies, as well as links to numerous resources to assist consumers.
Consumers will see no change in their Covered California health benefits or financial assistance in 2018.
The individual mandate penalty will remain in place in 2018.
Individuals who do not buy insurance in 2018 because it would be “unaffordable” may still apply for an exemption through www.healthcare.gov/exemptions.
The individual mandate penalty will no longer be assessed beginning in January 2019.
Financial assistance will remain in place in 2019.
Open enrollment for Covered California runs through Jan. 31, 2018.
This week, Covered California shared its latest open enrollment data, showing that more than 220,000 new consumers signed up for coverage through Dec. 15 — about 10 percent more than last year. In addition, approximately 1.2 million existing Covered California consumers have had their coverage renewed for 2018. While the open enrollment period has ended in most states, uninsured consumers in California have until midnight tonight to sign up for coverage beginning on Jan. 1.
With the continued health care policy debate at the federal level, Covered California also noted that the individual market faces significant uncertainty in 2019. According to Covered California, the three main causes of this uncertainty are repeal of the individual mandate penalty, lack of federal marketing and the president’s recent executive order allowing the sale of “association health plans” or “short-term plans.”
CHA has launched a weekly series of strategies to help hospitals enroll patients in coverage through the Covered California marketplace and the Medi-Cal program. This week’s two-part installment concludes the series by addressing partnerships with key stakeholders and service vendors.
Strategy 6 emphasizes community partnerships hospitals should build for enrollment outreach, including those with health care organizations, physicians and other providers, state and county agencies, and community sites such as schools and places of worship. The strategy also shares information on developing a partnership with Covered California, including a toolkit of ready-to-use information that can be shared with patients and local communities.
Yesterday, Covered California announced that it has extended the deadline to enroll for health coverage that will begin Jan. 1. The new deadline is midnight on Dec. 22.
As of Dec. 13, more than 182,000 consumers have signed up for coverage since the start of open enrollment; 38,000 signed up in the past three days alone. Compared to last year’s enrollment, this represents an increase of 17 percent, or 26,000 people. Consumers will be able to enroll in coverage until Jan. 31, but anyone who enrolls after the Dec. 22 deadline will not have coverage until Feb. 1 at the earliest, or March 1 at the latest. Enrollment resources are available on CHA’s dedicated web page.
CHA has launched a weekly series of strategies to help hospitals enroll patients in coverage through the Covered California marketplace and the Medi-Cal program. This week, the strategy focuses on helping vulnerable populations – including individuals who are homeless, have a mental illness or substance use disorder, or are undocumented – enroll in health coverage. Without such coverage, these hard-to-reach populations may use hospital emergency rooms as their primary care site or forgo treatment altogether.
Hospitals are encouraged to develop innovative strategies to reach these individuals. Ideas include using eligibility and enrollment services vendors to visit shelters and other places where homeless individuals gather, or giving individuals who are homeless taxi vouchers and bus tokens to get to public places where they can obtain the information required for an application.
CHA has launched a weekly series of strategies to help hospitals enroll patients in coverage through the Covered California marketplace and the Medi-Cal program. This week, the strategy helps hospitals position trained staff at critical access points, which typically include inpatient admitting areas, emergency departments, obstetrics departments, pharmacies, laboratories, urgent care facilities, women’s clinics, ambulatory surgical facilities and other outpatient sites. Positioning enrollment staff in these access points is an effective way for hospitals to build strong relationships with patients. Staff responsibilities and training vary by hospital and access points within the facility; training designed for specific roles and needs is essential to effective enrollment functions.
Covered California announced today that more than 102,000 new consumers have signed up for coverage between Nov. 1 and Nov. 30, representing a 28 percent increase in enrollment over the same time period in 2016, when approximately 80,000 consumers signed up for coverage.
According to a new survey from the Centers for Disease Control and Prevention, California’s uninsurance rate has dropped to 6.8 percent. Prior to the Affordable Care Act, California’s uninsured rate for all ages was higher than the national average: 17 percent compared to 14.4 percent. Since that time, California’s uninsured rate has dropped by more than 10 percentage points, while the national average has dropped by 5.4 percentage points.
The CDC survey shows wide variation across the nation in the extent to which states have lowered their rates of the uninsured, with particularly striking differences between states that manage their own marketplaces and expanded Medicaid, and those that did not.
CHA has launched a weekly series of strategies to help hospitals enroll patients in coverage through the Covered California marketplace and the Medi-Cal program. This week’s strategy is intended to help hospitals determine how to approach and communicate with patients to best educate them about the eligibility and enrollment process. The strategy explains that developing a partnership-like relationship with patients creates trust and engages them in a conversation about their health coverage options.
For the current open enrollment period, Covered California is undertaking an extensive marketing, education and outreach campaign to inform patients about their coverage options and has budgeted $111 million for the upcoming 2018 coverage year. In addition, shopping and enrolling in coverage are easier than ever this year due to upgrades to the online experience:
For the first time, Covered California’s website is mobile friendly, enabling consumers to shop, find local help, enroll and manage their account on a cell phone or tablet.
A new provider directory allows consumers to see which doctors and hospitals are available in which plans.
The application for health coverage has been simplified for easier navigation.
Upgrades to the website make it easier for consumers to find resources and in-language phone support in 12 languages on the home page and under a new “Contact Us” page.