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Covered California January and February 2016 Board Meetings

Summary of 3rd Open Enrollment

Open enrollment 3 (OE3) closed Sunday, January 31, 2016. Executive Director, Peter Lee, reported that 439,392 new signups occurred through February 6, 2016. Data from this third enrollment shows that consumers are shopping around and that the health plans with the lowest prices end up with the bulk of the new enrollees.

Main Data Points of 2016 Enrollment:

  •  88% of all enrollees are subsidy eligible.
  • Most of the race and ethnicity enrollment percentages stayed the same as open enrollment 2 (OE2), except Latino enrollment went down by one percent (37% to 36%) and “Other” went up by one percent (3% to 4%).
  • Enrollees age 18 to 25 increased from 13% in OE2 to 17% for OE3.
  • Male and female enrollees make up an equal share of 50%.
  • CEC and navigator utilization by enrollees showed a marked decrease from last open enrollment (10% to 6%), while there were increases for certified insurance agents (43% to 45%) and self-service (30% to 32%).
  • Anthem, Blue Shield, Health Net, and Kaiser Permanente cover the most lives in the exchange. Over the past three years, Anthem has lost enrollees (30% OE1 to 25% OE3), Blue Shield has gained (27% to 28%), Health Net has lost the most enrollees (19% to 14%), and Kaiser has stayed consistent from last year (24%), but lost new enrollees (28% to 23%).
  • New enrollees mostly chose Blue Shield (27%) followed by Anthem (24%) and then Kaiser (23%) for OE3. Molina Healthcare enrollment numbers for new enrollees was quite remarkable going from 3% OE2 to 12% OE3.
  • There was a slight increase in enrollees choosing a bronze plan (29% to 31%) and decrease in enrollees choosing a silver plan (63% to 62%) and platinum plan (3% to 2%) compared to OE2.

Tax Form 1095 Update and Lessons Learned

Covered California issued about 1.7 million 1095 tax forms to their consumers for tax season. By January 31st, the rest of the forms were to be mailed out. Corrections to the 1095 forms started in February.

Covered California reported a number of improvements in generating accurate 1095 forms for consumers, including: standardization of the reconciliation process between Covered California and all the health plans; a 1095 project plan which improved the IT infrastructure, among other things; creation of a consumer facing online form; improved notices to address consumer questions; and a specialized service center team to address disputes from consumers. These process improvements will hopefully increase the efficiency of the 1095 process.

Covered California Comments on HHS Notice of Benefit and Payment Parameters for 2017

In December, Covered California issued a number of comments on the federal Health and Human Services’ (HHS) proposed benefit and payment parameters for 2017. Specifically, they commented on the topic of user fees, standard benefits, direct enrollment, web-based entities, and other topics. Covered California stated that the 3% user fee for the state-based marketplace on a federal platform was too low. Federally-facilitated marketplaces’ user fee is set at 3.5%. In Covered California’s new re-certification contracts with Qualified Health Plans (QHPs), the user fee will be changed from a flat fee to a percentage set at 3.5%. Covered California also commented that setting standardized health benefits and clearly communicating this information to consumers through the federal website are best practices. With standardized health benefits, consumers would be able to easily compare packages using price and quality measures; displaying confusing plan information on the website could lead to smaller enrollment or a worse risk pool. Additional topics were discussed, and letters with all the details can be found here.

1332 State Innovation Waiver

Starting in 2017 states can apply for a 1332 State Innovation Waiver as part of the Affordable Care Act (ACA). The waiver allows states to waive some of the law’s mandates to allow for new, broad, innovative state-based models for expanding health coverage. States may waive the individual mandate, the employer mandate, the essential health benefits and health benefit exchanges, and the subsidies for coverage. A discussion on potential options will take place on February 23, 2016. Executive Director of ITUP, Lucien Wulsin, will be presenting at the forum, along with others. Please find the broadcast here on February 23, 2016.

Vision Program

Covered California now offers links to vision coverage. At this time there is only one carrier, VSP Vision Care. VSP’s monthly premium for an individual is $15.16. The carrier, and others that may be added, are responsible for customer service functions and must conduct annual consumer surveys. Enrollment is year-round. For more information on Covered California’s Vision Coverage please visit their web page.

Special Enrollment

Promotion of Special Enrollment

Special enrollment occurs when an individual enrolls in Covered California outside of open enrollment dates as a result of certain qualifying events such as loss of health insurance, marriage, birth, and income changes. Covered California uses radio and digital ads to educate Californians on this opportunity. Covered California has also collaborated with a number of private and public agencies to send people to Covered California during a gap in health care coverage. Collaborative agencies working with Covered California include the QHPs, private sector consulting groups, Employment Development Department, Courts system, State Workforce Investment Board Rapid Response Teams, and California Department of Veterans Affairs. Covered California is committed to being an affordable option to the uninsured.

Emerging Potential Trends for Covered California Special Enrollment Period Enrollees

A presentation by actuarial John Bertko highlighted that the risk mix of special enrollment consumers is more costly than the risk mix of open enrollment consumer. It is suggested this may be from unsubstantiated qualifying events. Other observations from the presentation included that SEP members are younger and COBRA enrollment in some plans has declined slightly as individuals may be moving to the lower cost Covered California options. The exodus of individuals in COBRA is increasing average costs of COBRA. These trends are significant because special enrollment increased from 11% to 13% from year one to year two, and a growing, more costly risk pool must be accounted for in premium costs set by health plans.

At this time, individuals may sign up during special enrollment by attesting to a qualifying event. It is believed that requiring documentation of individuals seeking coverage during special enrollment, versus just attestation, would decrease the number of enrollees and improve the risk mix. With a poor risk mix, potentially from some consumers gaming the system, there could be significant increases in premiums. Such increases in premiums would be largely felt by the middle income and non-subsidized individuals (on- and off-exchange), as they would pay for these increases. Lower income individuals would be protected from these premium increases due to federal subsidies, but the federal budget would grow from an increase in premiums.

Subsequently, Covered California has proposed requiring documentation with verification of a qualifying event to enroll during special enrollment. A letter would be sent to the potential enrollee asking for valid documentation. The enrollee would need to provide proof within ten days to their potential QHP. The QHP would forward the documentation to Covered California. Covered California would then make final determinations to approve coverage (or not) based on the documentation.

Consumer advocates were unsupportive of the proposed plan, while health plan advocates backed the proposed change in special enrollment requirements. Consumer advocates are concerned documentation requirements will serve as insurmountable barriers that will unfairly block eligible, low-income, and non-English speaking consumers — as historically has been the case in the past with such requirements. The ten-day turnaround time for submitting documentation was especially troubling to consumer advocates as any individual would have a hard time retrieving documentation in such a small time frame. Even Medi-Cal allows 30 days for consumers to submit required documentation. Additionally, the proposed recommendation to send required documentation through the QHP was also a point of concern for consumer advocates as the health plans may not be the best administrative agency to handle this documentation; it would be better if Covered California had a mechanism to collect this information themselves. Health plan advocates support collecting valid documentation citing the integrity of the process and ensuring people are playing by the rules and not gaming the system. Without such mechanisms in place to ensure a fair system, premiums will increase and those playing by the rules will end up on the losing end.

2017 Qualified Health Plan Certification

During the past two board meetings, the details of the 2017 certification were proposed (January) and updated (February). In a following blog post this will be further discussed, as the information is robust.

Action Items

There were no action items during the January meeting. During the February meeting the Board adopted certified plan-based enrollment program regulations.

Next Meeting

There will be no Covered California meeting in March and the next meeting will be on April 7, 2016.

For all meeting materials click here.