On February 15, the second annual health insurance exchange open enrollment period will come to a close. To date, 2015 enrollment is on track to exceed the Administration’s goal of 9 million but fall short of the Congressional Budget Office’s prediction of 13 million. So with less than a month to go for consumers to enroll in insurance for the 2015 plan year, what do we know about the choices available?
— 2015 premiums are highly variable by geography. In 2014, two-thirds of federal exchange consumers picked Silver plans in 2014. Of those, 43 percent picked the lowest-cost option. On average, lowest cost Silver plan premiums will increase by about 4 percent in 2015 versus 2014. But changes in 2015 premiums vary widely by geography and regional market dynamics. Lowest cost Silver premiums increased 28 percent on average in Alaska, while the same premiums decreased by 18 percent on average in New Hampshire.
— Average deductibles are higher in 2015 versus 2014. In 2014, many insurance carriers designed benefits with significant deductibles to meet the actuarial value targets set forth in the law. These deductibles have increased in 2015, with the average deductible among Silver plans increasing 7 percent to $2,658. Deductible increases varied by metal level, with Bronze, Gold, and Platinum deductibles growing 4, 6, and 23 percent respectively between 2014 and 2015. The average Silver deductible of nearly $2,700 represents 45 percent of the average out-of-pocket limit for the metal level.
— Consumers have plan choices with maximum out-of-pocket limits below what is required by the Affordable Care Act. In fact, 74 percent of Silver plans offered on exchanges have maximum out-of-pocket limits below what is required by law. In 2015, exchange plans are required to limit out-of-pocket costs for covered, in-network services to $6,600 for individual plans and $13,200 for plans offered to families. In addition to the Silver plans mentioned above, 71 percent of Bronze plans, 94 percent of Gold plans, and 98 percent of Platinum plans will have out-of-pocket limits below $6,600 for individuals in 2015.
— Coinsurance for specialty medications has increased. The incidence of plans charging coinsurance greater than 30 percent for specialty medications has increased from 27 percent of Silver plans in 2014 to 41 percent in 2015. Overall, 80 percent of Silver plans use coinsurance for consumer cost sharing on the specialty tier. In comparison, 91 percent of Bronze, 80 percent of Gold, and 66 percent of Platinum plans charge coinsurance for specialty medications. The impact of higher coinsurance rates is dependent on their access to cost sharing subsidies which may serve mitigate the overall cost impact.
— The vast majority of enrollees will benefit from lower costs due to subsidies. As of December 15, 2014, 87 percent of people who had enrolled in exchange coverage for 2015 were eligible for financial assistance to lower their monthly premium. In addition, Avalere estimates that more than half of all exchange enrollees also qualify for cost-sharing reductions that lower their out-of-pocket maximum and other service-related costs. Such subsidies offer important protections that will help reduce healthcare costs for low-income enrollees earning less than 250 percent of poverty.
What is next for exchanges? Believe it or not, carriers are already at work preparing for 2016. In its 2016 Letter to Issuers, the Centers for Medicare and Medicaid Services (CMS) proposed to move up the deadline for 2016 QHP applications to April 15 for 2016 versus June 27 for 2015. The deadline for final submission of QHP data will be July 24 for 2016 as opposed to September 4 for 2015, if finalized as proposed.
Meanwhile, regulators and policymakers continue to wrestle with balancing patient protections and ensuring access to affordable premiums. As this debate marches onward, consumers should be mindful of the tradeoff between monthly premium costs and out-of-pocket expenses. This emphasizes the need for more sophisticated consumer support tools that enable people to tailor their plan choice to their particular needs.
Finally, in early March, all attention will shift to the Supreme Court as it considers the legality of subsidies provided to consumers enrolled in federal exchanges. A ruling against the Administration could set in motion a significant restructuring of the Affordable Care Act that would change the exchange landscape for years to come.
Caroline Pearson is a Vice President at Avalere Health, where she leads the Health Reform Practice