All four carriers currently offering health insurance on the Arkansas Health Insurance Marketplace are planning to sell statewide in 2015, the Arkansas Insurance Department announced today at a meeting of the Joint Public Health Committee. In 2014, only Arkansas Blue Cross Blue Shield and the national BCBS sold statewide. The Marketplace, one of the health insurance exchanges created in each state by the Affordable Care Act, is divided into seven regions (see map above, premiums vary by region); in 2014 Qualchoice sold in five regions and Ambetter sold in three.
The expansion of Qualchoice and Ambetter means more competition and more choices in rural areas of the state. More carrier competition could mean lower premiums in the long run — which is also good news for the private option, the state’s plan using Medicaid funds to purchase private health insurance for low-income Arkansans. (Private option beneficiaries choose from among certain plans on the Marketplace, and state officials hope that carrier competition can help keep costs down. For the differences between private option enrollment and the rest of the Marketplace, see this post.)
“There will be more competitors in those underserved areas,” Insurance Commissioner Jay Bradford testified. “I’m real proud of that. I think it speaks well for what you all have done with the private option. … That’s really, really good news.” Bradford said the department is hoping additional carriers will come in 2015, including the possibility of another federal multi-state carrier in addition to the national BCBS.
Bradford said the news was promising for the future of the Marketplace and for the possibility of “more carriers coming in and more competitive rates” in future years. The department has been encouraging carriers to go statewide but chose not to mandate it so that potential new entrants to the Marketplace could choose to start small. Bradford said he had been in communication with a number of carriers taking a look at the state. Carriers considering offering plans on the Marketplace will have until June 15 to decide.
Bradford said that he believed the private option was a big factor in terms of bringing in and retaining the carriers currently in the state as well as recruiting new carriers going forward, both because it added customers and because it made for a much younger pool of people in the Marketplace (see here for more on the private option’s impact on the Marketplace). Around three quarters of the consumers on the Marketplace are private option beneficiaries. According to Marketplace Director Cindy Crone, with the private option included, the Arkansas Health Insurance Marketplace has the second youngest exchange in the country, behind only Washington, D.C. That’s almost entirely thanks to the private option. Here’s the age breakdown provided by AID without the private option:
And here’s the age breakdown with the private option:
AID also gave more detailed information on the enrollment numbers in the non-PO Marketplace released earlier this week. Though 44,665 selected plans on the Marketplace through April 21, that figure includes some plans that were cancelled. If a consumer never makes their first premium payment, they won’t be covered. Of the 44,665 enrollments, 64 percent are current with their payments and 27 percent still have their first payment due and are not yet late (the Marketplace saw a wave of late enrollment, so around a third of enrollees haven’t had a first due date yet, though some went ahead and paid).
4,091 policies (9 percent of the total) were cancelled. That could include people dropped by carriers because they never made their first payment, as well as people who switched to another form of coverage, according to AID:
These cancellations could be due to consumers canceling their Marketplace plans for various reasons, which could include switching to another plan in the Marketplace they like better or switching to employer-offered insurance that later became available, or it could be due to the issuers cancelling the plans because the customer never made the first premium payment
Subtracting the 9 percent of cancellations, the total number enrolled in the Marketplace stands at 40,574. Note that this adjustment means that the impact of the private option on the total pool has actually been slightly understated.
Also today at Public Health, actuaries from Optumas, the firm hired by the state to project private option costs, testified on cost projections, including adjustments that will be made to stay under budget neutrality caps (see here for more; I may have more on this in a subsequent post).
One more note from today: Crone also told lawmakers that next year the state will mandate coverage for TMJ and hearing aids as part of the essential health benefits (EHBs) that insurance plans on the Marketplace must cover (this goes beyond the EHBs guaranteed by the feds). AID will require carriers to offer at least one Silver-level EHB-only plan, which will likely be the only plans private option beneficiaries will be able to choose from — those EHB-only plans will have to include coverage for TMJ and hearing aids. Some plans sold on the Marketplace in 2014 already included these benefits. Crone said that most carriers predicted adding the benefit would raise premiums by about $2 per month. More than 30 other states include TMJ in their EHBs but only 5 include full coverage for all adults for hearing aids.