After large rate cut, Premera pushes open enrollment period
A 45-day open enrollment on the federal health care exchange begins Nov. 1, and despite confusion surrounding the Affordable Care Act, several factors that brought down the cost of health insurance in Alaska for those shopping on the individual market this year promise to strengthen the state’s health care market.
But it’s a short window this time that ends on Dec. 15.
That’s the message of licensed insurance producers such as Joshua Weinstein of Northrim Benefits Group/RISQ. He has helped people enroll on the open market exchange since the ACA launched in 2014.
“We let people know that the political climate in Washington, D.C., has been uncertain since the beginning of the ACA, yet with Republicans in full control, the ACA remains popular to Americans,” Weinstein said. “The ACA isn’t gone. There probably will be changes.”
Alaska’s only company on the insurance exchange is Premera Blue Cross-Blue Shield, which lowered rates by 26 percent going into 2018. Alaska also is in the unique position as the recipient of what’s known as a Section 1332 innovation waiver, referring to that part of the ACA, with a strategy to reduce rates by isolating high-cost conditions away from the more generally healthy individual pool.
Weinstein said 9 out of 10 people qualify for the tax credits that bring down the cost of their health insurance. During registration, consumers are helped selecting plans and find out if they qualify for the tax credits.
People who aren’t offered insurance through their jobs and aren’t covered by a government program have to purchase it through the exchange. Those who don’t are subject to the individual “mandate,” which requires a penalty payment to the IRS if one does not have approved coverage during all or part of the tax year.
President Donald Trump signed an executive order soon after taking office that loosens the IRS enforcement of the mandate.
“The individual mandate is still in the law and still applies. What’s changed is that the IRS has been given discretion through the executive order as to how stringently it enforces the mandate,” said Premera communication manager Melanie Coon. “We encourage people to enroll in 2018 coverage because premiums are lower next year, and people would have to wait until the next open enrollment period if they wait (unless they have a qualifying event).”
Qualifying events include changing jobs, turning 26 (in which case the person can no longer be covered through a parent’s insurance), getting married or having a baby.
Alaska’s reinsurance program, originally state-funded with $55 million for 2017 and now to be about 80 percent covered by the federal government for the next five years, has garnered the spotlight as states consider ways to stabilize their individual markets.
In 2016, the Alaska Legislature created a state-operated fund to cover all health care costs of people in the individual insurance market that had certain, traditionally high-cost diagnoses. By subsidizing the costs of individuals with diseases such as HIV/AIDS, cancer, and multiple sclerosis, among other conditions, the state was able to reduce the increasing cost burden on others in its market risk pool.
“Open enrollment” is the period of time, once a year, to choose or change insurance plan options. Though consumers don’t have options to decide on another insurance provider, there are a range of monthly premium and annual deductible amounts for the upcoming calendar year to be selected.
The push is on in part to bring costs down for the 18,000 people now on the Alaska health insurance exchange. Coons said Premera lost about 5,000 customers over the past year.
“Some of this may have been due to expanded Medicaid coverage,” Coons said.
After Premera raised rates by nearly 40 percent in 2015 and 2016, others in the individual market who don’t qualify for subsidies may have also dropped out because of the high costs that were nearly $1,000 per month for a “silver” plan.
Alaska’s expanded Medicaid coverage grew to include an additional 35,000 people when Gov. Bill Walker used his executive authority to accept federal funds for the program, which at the time was for 100 percent of the cost of the new enrollees.
That means about 184,000 Alaskans are now covered by Medicaid. An estimated 10 percent of the population remains uninsured, according to the Alaska Department of Health and Human Services.
Medicaid expansion opened a new health coverage option for thousands of low-income, childless Alaskans between ages 19 and 64 who earn less than 138 percent of the federal poverty level (or an annual income of about $20,000 for a single adult). At least some of these are people who, Coons believes, may have formerly been covered on the exchange.
It’s estimated that about 55 percent of all people on Medicaid are elderly and people with disabilities. Eligible children are covered by the Children’s Health Insurance Program, or CHIP, in Alaska through the Denali Kid Program.
Mandate or not
Enrolling on the open health care exchange under the ACA is required by a federal mandate. People fell into one of two camps under the mandate: either their employer must offer health insurance to employees and their children up to 26 years old, or the individual must supply coverage.
People or businesses that didn’t follow the rule were penalized when filing their IRS forms, resulting in fees added to the tax bill or loss of exemptions.
What happened to that?
Earlier this year, the IRS quietly altered its rules to allow the submission of 1040s with nothing on line 61. The IRS says it still maintains the option to follow up with those who elect not to indicate their coverage status, although it’s not clear what circumstances might trigger a follow up, according to information provided by the IRS in the Wall Street Journal.
“The change is a direct result of the executive order President Donald Trump issued in January directing the government to provide relief from Obamacare to individuals and insurers, within the boundaries of the law,” the article stated.
The move has already raised questions about its legality, the WSJ article continues. Federal law gives the administration broad authority to provide exemptions from the mandate. But “it does not allow the administration not to enforce the mandate, which it appears they may be doing here,” says Michael Cannon, health policy director at the libertarian Cato Institute. “Unless the Trump administration maintains the mandate is unconstitutional, the Constitution requires them to enforce it.”
The IRS notes that taxpayers are still required to pay the mandate penalty, if applicable.
“Legislative provisions of the ACA law are still in force until changed by the Congress, and taxpayers remain required to follow the law and pay what they may owe,” the agency statement said.
Whether that continues in 2018 or not is a gray area that awaits more clarity. Premera reads the mandate as still in effect, Coons said.
Cuts to advertising
The federal Centers for Medicare and Medicaid Services announced in early September that it is making large cuts in spending on advertising for the 2018 open enrollment period on the ACA’s health insurance exchanges, as well as significant cutbacks in funding for local organizations that help consumers navigate the buying process.
Navigator organizations received $62.5 million from the federal government last year, but will get $36.8 million this year, a 39 percent cut, according to a fact sheet from the Centers for Medicare and Medicaid Services or CMMS.
Overall cuts for the promotional budget to get people to sign up on the exchanges nationwide was cut from $100 million to $10 million, according to the CMMS. That means no advertising on television or radio, according to a bulletin the agency sent out. The campaign will be limited to digital media, email and text messages.
Licensed insurance producers
As Northrim Benefits Group did in the past before being sold by its parent company, RISQ will be offering assistance to people navigating the insurance market exchange starting Nov. 1. Individuals can call for an appointment with Jessica Carlson at 907-263-1401.
Though enrollment won’t open until Nov. 1, consumers can also go to www.Premera.com or to www.HHS.gov to look at plans now. Premera is also fielding calls from customers with questions about signing up.
Another resource is Alaskan Benefit Insurance Consultants at ak-insurance.com.
Naomi Klouda can be reached at [email protected].