Nevadans who purchase insurance on the health exchange and don’t qualify for subsidies from the federal government saw hefty increases in their premiums last year, and those rates are likely to increase again this year unless Congress takes action in the next few weeks.
A deal to stabilize the Affordable Care Act seemed possible as Congress headed toward passing an omnibus spending bill last week, but ultimately fell apart over a debate about abortion restrictions. Now, it seems unlikely that lawmakers in Washington will take up a measure that would provide some assurances as insurance companies prepare to submit their rates to the state in May, and lawmakers here in Nevada aren’t scheduled to meet again until February, ruling out a possible state-level fix, said Heather Korbulic, executive director of the Silver State Health Insurance Exchange.
“I’m hopeful that we could get something passed in the next four weeks, but I don’t anticipate that’s going to happen,” Korbulic said.
Those who purchased insurance on the exchange last year and qualify for federal subsidies — meaning they make up to 400 percent of the federal poverty level, or $98,400 for a family of four — were largely shielded from the increases in insurance premiums that went into effect largely as a result of the Trump Administration’s decision to stop funding so-called cost-sharing reduction subsidies. Because of the way states were able to reshuffle their money, low-income individuals actually ended up with lower premiums that they would have otherwise had, while those who were unsubsidized bore the full brunt of the price increases.
Korbulic said that those same individuals who saw a “disproportionate impact” on their rate increases last year will bear the burden of any price increases again this year.
But Congress seems unlikely to act on any stabilization measure in the next few weeks, and the state can’t take action to mitigate any price increases either without legislative action and the next legislative session a little less than a year away. Lawmakers in Oregon, Minnesota and Alaska, for instance, passed reinsurance programs — which spread the risk of high-cost patients so all insurance companies take an equal share of the risk — to stabilize its individual market, reduce rates and encourage insurance companies to operate more widely across the state.
“There really isn't anything in the state’s control,” Korbulic said.
So, Korbulic said the exchange is left to do what it has been doing for the last year: Remind people that subsidies still exist and that there are affordable options available on the exchange if they qualify for them. But there’s not much to be done for people who don’t qualify for subsidies, and Korbulic said she worries that — especially with the individual mandate going away in 2019 — people will turn to other insurance plans that don’t offer as many benefits as those on the exchange.
In the coming weeks, the Labor Department is expected to release a final rule to expand the use of so-called association health plans, which allow small employer groups to band together to offer health insurance to their employees. A second rule would extend the length of time short-term health plans can be used to 364 days.
Korbulic said it’s not yet clear what kind of impact association health plans will have on the marketplace, but those who face steep prices on the individual market could turn to short-term health plans. Though the short-term plans would still be limited to 185 days in Nevada by state law and people aren’t allowed to purchase back-to-back plans from the same insurance company, there’s nothing stopping people from hopping from insurance company to insurance company on multiple short-term plans, which offer scant benefits compared to qualified health plans on the exchange, she said.
“What concerns me is that people who are not receiving subsidies may be driven into these plans, and these plans are not minimum essential coverage,” Korbulic said. “I’m concerned that people who aren’t being subsidized are going to be getting the plans that aren’t as rich in benefits.”
In the meantime, insurance companies will be preparing their rates to submit to the state in May, at which point the health insurance exchange will have an idea of which companies plan to continue offering plans on the individual market.
Last year, Anthem and Prominence announced that they wouldn’t offer plans on the exchange for 2018, and Aetna rescinded its plans to come to Nevada this year as well. Fourteen rural and frontier counties briefly faced the threat of having no on-exchange insurance options at all, until Centene subsidiary SilverSummit stepped in.
“I definitely lose sleep and worry about continued participation,” Korbulic said. “Our goal is always to improve and increase competition. That will drive down the costs.”
In the meantime, the exchange is moving ahead with a plan to transition the state’s exchange from the federal healthcare.gov platform to an entirely state-run system that officials say will save the state money and allow it to better target outreach to consumers. The exchange anticipates that it will spend $12 million on fees to use the federal platform in 2020, compared to only about $6 million with a state-run platform.
Lawmakers approved $1 million for the project in January, a figure projected based on a non-itemized quote from a vendor, according to a memo Korbulic sent to the Legislative Counsel Bureau in February. The itemized costs that the vendor ultimately chosen to carry out the project would be required to absorb as part of that $1 million includes customizing existing code for the Nevada exchange, configuring servers, monthly hosting costs and testing, among other things.
“We’ve been explicit about what our budget is and clear about what we want, something that’s proven and demonstrated,” Korbulic said. “We’re not interested in building new things.”
The goal is to get a company that has already developed an exchange platform for other states’ marketplaces to reconfigure the technology for Nevada. Korbulic said she’s been pitching it as an ”exchange in a box,” and sees it as a model for other states concerned about the high costs of healthcare.gov — whether they’re operating under a hybrid model like Nevada with a state-based marketplace utilizing the federal platform or fully federally run — to transition to a fully state-based platform, too.
“In having conversations with other states that operate in this hybrid model and states that are fully federally facilitated, there’s a lot of interest in what’s going to happen with our potential transition away from healthcare.gov and the savings we’re going to find,” Korbulic said.
The exchange is hoping to bring the contract before the Board of Examiners in August, with the plan to get the technology up and running in time for open enrollment on Nov. 1, 2019.
Until then, Korbulic has asked Health and Human Services Secretary Alex Azar to hold the 2 percent fee Nevada currently pays the federal government to use healthcare.gov steady for the upcoming plan year, instead of raising it to 3 percent as planned. Korbulic said the exchange would like to maximize its available funding while transitioning to the state-run system to be “fiscally realistic and prudent as to the costs during this parallel period of paying both the federal user fee and the costs associated with a transition.”