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The affordable care act has had a huge impact on health insurance in Indiana and the entire country.
Health Insurance has always had challenges for both Individual and businesses. The current market for health insurance is very different from what it used to be.
Guaranteed Issue
Guaranteed issue was one of the staples of the ACA. In the past we saw way too many Hoosiers get declined for coverage because of an ongoing health condition. Even health issues of the past would still be counted against you up to 10 years. Now no ACA policy can decline coverage to you. They also cannot rate your premiums up for any health condition. Today’s health insurance applications no longer have medical questions on them. A standard health insurance application can take less than 5 minutes to complete. We are now able to offer health insurance to all Hoosier no matter what kind of health they have.
Impacts of Guaranteed Issue
For Indiana, we have seen an entire class of people now qualify for health insurance. This is a great thing for many people that had to deal with being declined coverage. This has created large premium increases to health insurance plans. All at once we have a huge enrollment of chronically ill members to the health insurance ranks.
Prior to the ACA, we had the high risk pool through Indiana comprehensive health. There was about 12,000 Hoosiers on that plan that had very high claims. The 12K people were added to the ranks of Anthem, Humana, Assurant, & MD Wise. The underwriters for these companies had to increase overall premium to cover these claims. Take 6,000 hemophiliacs that incur $300,000 a year in claims per person. The dollar can add up very quickly forcing the health insurance companies to radical decisions.
Another impact of Guaranteed Issue was the devalued of small group health plans. In the past, small employers were able to offer their employees GI, which gave full coverage to their employees. Now that the individual health plans had guaranteed issue this devalued the benefit of a small group health. This has led to many small employers in Indiana to drop group coverage.
Tax Credits through the Marketplace
Under the ACA, people now have the option of purchasing health insurance coverage and received advance able tax credits to lower their monthly premium. The tax credits are based on household income and if you qualify then you will only pay a % of your household income for health insurance.
Essentially there is now subsided health insurance premiums for families with incomes under 400% of the federal Poverty Level.
Impacts of Tax Credits
The tax credits have reduced the premiums for about 82% of Indiana residents that applied for health insurance coverage through the exchange. About half of these people did not have prior health insurance coverage. The reason we believe they did not have prior coverage because companies like Anthem and Express Scripts did not have any data on these new members. We estimate that about 100K people were able to get health insurance because of the tax credits that were otherwise prices out of the market.
A segment of people have really benefited from the tax credits and those are our early retirees. Pre ACA, many people had to continue to work because they need the health insurance benefits. Tax credits have changed that significantly. The couple that are in their late 50’s or early 60’s can now retire early and pick up a policy with tax credits that they can afford. In some situations, the premium is much lower than what their contribution was on an employer’s group plan.
Small business owners also have been able to take advantage of the tax credits. There are many people that are consultants, contracted employees, small business owners that now qualify for tax credits. The professionals have significantly reduced their health insurance cost and this has open the door for more Indiana residents to entertain starting their own business.
Narrow Networks
Guaranteed issue has brought narrow networks. The health insurance industry use to use underwriting to mitigate risk, with GI they no longer have that tool. Companies like Anthem have developed narrow networks. This is where they have negotiated deeper reimbursement rate with select medical providers. The narrow network has create a lot of confusion in the Indianapolis metropolitan area. Anthem being the biggest health insurance provider, had many members not aware that Individual network was changing. Even medical providers were unware of these changes. Anthem developed a HMO Pathway X network who’s primary medical provider was Community Hospital. Thus St. Vincent’s, St Francis and IU Health were no longer a part of Anthem’s Individual network. These created huge frustration for many Anthem members.
Impacts of the Narrow Network
Many Hoosier were faced with taking tax credits and being able to afford the health insurance premium but having to change their doctors. On the North Side of Indianapolis where IU & ST V’s are the main medical provider for many, this was a difficult decision. For the 2015 open enrollment, we have seen the Pathway X network expand significantly in Northern Indiana. We have also seen the reemergence of UnitedHealthcare that is utilizing an EPO network that included ST V’s and IU. The EPO stands for Exclusive Provider Organization, this is like a hybrid of PPO and HMO. The EPO is very large but there is no out of network coverage. Some may consider a EPO a narrow network, but in Indiana the UnitedHealth Choice network is very strong and is a great option.
We have seen new narrow networks that have come into the marketplace. Caresource and AM Better are carriers on the exchange that utilize narrow networks. Their narrow network looks good but when on starts to look for specialists it gets very thin. Buyer beware!
The Expansion of Medicaid/ HIP 2.0
Another big change of Indiana is the expansion of HIP 2.0. If your household income is under 133% of federal poverty level then you could qualify for this plan. It estimated that 300,000 Indiana residents will end up with coverage through HIP 2.0.
Group Health Insurance
The ACA has had negative impacts on 90% of existing small group health plans. If a company has less than 50 employees, they now have guaranteed issue in the small group market. This has created large rate increases for many small companies that benefited from medical underwriting. These companies usually had younger employees that did not have any major health issue. All of sudden, the premiums for these companies increased 40%-90%. No business owner could take on this type of rate increase. The Government then decided to allow for what is called “grandmothering”. Grandmothering allowed a small group to keep the current policy they had. This would be considered a transitional policy to the ACA , thus it does not have abide by all the new rules of the ACA. It is thought, that these plans will be able to stay in place until 2017. These transitional policies are very valuable in today’s market.
With our larger Indiana companies, they have faced many obstacle of the ACA. Some of this has to do with the essential health benefits. Under the ACA all health plans have to meet certain levels of coverage. This created some issues with larger employers. There also has been additional admiration for large group employers to take on under the ACA.
All health plans now have additional taxes that must be paid to fund the ACA. Large group employers have had increase of taxes on their health plan. Some employers have absorb these cost while other have past them on to the employee.
The ACA has created a new market of self-funded and partially self-funded options for Indiana companies. In the past these options were not available to smaller employers. We now have companies like Allsavers offering self-funded options to companies as small as 10 lives. These new plans look like a full insured product but the group is eligible for reimbursement if they have a good claims year. For certain groups this can be an excellent option to explore because these plan have limited the risk of claims liability. We believe by 2017, many Indiana group health plans will entertain this option.
Open Enrollment
Individual health insurance now has an open enrollment period. This is where you can switch your current coverage without having a qualifying event. This is have a huge impact on everyone in Indiana that has a family or individual health insurance policy. 2016 Open enrollment is going to start on Nov. 1st of this year. This is subject to change, as it was supposed to be on Nov. 15th but they have already changed.
The current health insurance system was never intended to have this much volume in a short period of time. Indiana insurance companies have had significant strains all of their systems for enrollment. We have seen multiple system crashes from all of the carriers and the federal government. Customer service is also an issue during open enrollment. All resources are being allocated to enrollments so other areas are not fully staffed. This may continue during open enrollment because it’s extremely difficult to have trained staff on for just 3 months out of the year. The best solution for Indiana policy holders is not to wait until the last minute. In the last 2 years we have seen most of the system crashes occur right before a dead line. So it’s very important to limit your frustrating to get your enrollment done early.
Indiana Insurance Companies
Here in Indiana we are have a decent amount of carriers competition for your business both on and off the exchange.
On the exchange carriers that are eligible for tax credits are Caresource, AM better, Anthem, UnitedHealthcare, Assurant, MD Wise , & IU Health.
These carriers have many options choose from and very different networks. Some of these carriers are plans that have restrictions on care and need a high level of prior authorizations. Some have better coverage than others. Some carriers have better Drug coverage than others. Some are real insurance companies while others are experiments.
Off the exchange companies
Humana, Anthem, UnitedHealthcare
Humana & UnitedHealthcare have strong PPO networks in Indiana. Anthem has a narrow network but a lower cost.
Over all there are plenty of options for the Indiana consumer to choose the best policy for their needs.
Each Individual health insurance companies have certain aspects that may make them a better options.
If you look at Anthem’s policy and how they cover diabetes. Their diabetes coverage is far richer than the other carriers. Anthem’s drug list may be a better options for those on certain drugs.
UnitedHealthcare has a much border network, with almost all of the specialists participating in. Their plan designs also have a specialist co pay where other carriers do not. For someone that is seeing a specialist this can create savings.
Humana is also utilizing a national network and in Southern Indiana is very strong with access across state lines.
These 3 carriers also have additional tools for their members. Online access to member’s portal can be a important tool for education. The educational tools provided can help with controlling your out of pocket cost. The tools even have access to price comparison tools where you can research the cost of a procedure before having it. These tools will also allow member to research quality. There are metric systems in place so that a procedure can be researched from a quality aspect. If you are going to have a surgery you should know information about the surgical center and the doctor.
We have been providing health insurance to Indiana for almost 30 years. There was a time when Indiana had 50+ health insurance companies competing for business. The carriers at a fairly quick pace started dropping out of the Indiana market or were bought by larger companies. Then we witnessed firsthand the development of proprietary networks owned by the insurance companies. Carriers that owned their own networks were able to create a competitive advantage because they had deeper network discounts with the medical providers. Companies like Anthem, UnitedHealthcare, Humana and Cigna started to dominate the health insurance market. We knew then as we know now, that the top carriers are going to be the best fit for our clients. It could be a self-funded large group plan, Individual health plan, a marketplace plan or a Medicare plan.
The health insurance industry is going to continue to change in Indiana. One thing is certain, is Nefouse and Associates will adapt to those changes so our clients are able to get the very best solution. We have always worked for our clients and not the insurance companies. In fact we believe the insurance companies work for us. Contact us for a free health insurance evaluation.
