The sign-up period for 2017 Obamacare health plans began this week, but leaders of Connecticut’s health insurance exchange are eyeing the need for significant changes in the following year to ensure that the marketplace remains viable.
“We’ve got to figure out, how do we stabilize this marketplace?” Access Health CT CEO Jim Wadleigh said Thursday after a meeting of the exchange board’s strategy committee.
Wadleigh told board members that officials must be aggressive in ensuring that insurance companies continue to participate in the coming years. Two of the four insurers that sold plans through Access Health this year are not offering exchange plans for 2017, and the head of one of the remaining insurers, Anthem, indicated Wednesday that the company might consider leaving exchanges across the country in 2018 without improvements in “the pricing and regulatory environment.”
The committee didn’t endorse any specific changes Thursday, but held something of a brainstorming session, raising concepts to explore in the coming months. Those include:
- Allowing insurers to offer plans with narrow networks of doctors and other health care providers;
- Requiring insurance companies that sell policies in Connecticut’s individual market to sell plans through the exchange;
- Restricting the ability of customers who sign up outside the enrollment period to use their coverage until they prove they have a valid reason for enrolling after the deadline;
- Eliminating the lowest-cost bronze plans, which can leave members with high out-of-pocket costs when they get care;
- Charging higher premiums to customers who use tobacco.
“There are some important and viable options for us to take that can change the direction of these exchanges,” board member Dr. Robert Scalettar said.
The push to consider significant changes comes amid nationwide questioning about the future of exchanges because of insurer exits from the marketplaces and steep price hikes in many states. In Connecticut, the cost of many health plans sold to individuals will rise by double digits next year, although about three-quarters of Access Health’s customers receive federal subsidies that can insulate them from large price hikes.
Access Health – which currently covers about 94,000 people – must figure out a way to protect insurance companies that participate as much as it protects customers, Wadleigh said.
“If we don’t have any product to put on our shelves, we can’t help our customers,” he said.
Narrow networks
One concept the committee discussed was allowing insurance companies to sell plans with narrow networks that cover fewer health care providers and hospitals than typical plans. During a recent briefing, Cynthia Cox, associate director of the Program for the Study of Health Reform and Private Insurance at the Kaiser Family Foundation, predicted that if insurance companies re-enter the exchange markets, they will do so with narrow network-type plans.
Such plans have been common on exchanges in some other states, but Access Health has not allowed them, and they generally have not been embraced in Connecticut.
Some committee members expressed interest in the concept, although some raised questions about whether narrow-network plans could affect competition, since they could attract healthier – and lower-cost – customers than plans that cover more providers.
Wadleigh has said he’d like to see narrow networks on the exchange, but only if they come with a significantly lower premium than other plans.
“My gut says if the price differential is only 5 percent for the narrow network, it’s not worth the nightmare of the customer complaints that it will bring if they can’t go to Dr. X,” he said.
And Demian Fontanella, the state’s acting healthcare advocate, said that if the exchange allows narrow network plans, it should consider requiring those insurers to have enhanced customer supports to make sure people use the plans effectively to get care when they need it.
Getting tougher on mid-year sign-ups
One big concern of insurers, Wadleigh said, is customers who sign up for coverage outside the open enrollment period, get care, then drop out. That means they only pay premiums when racking up medical bills, but not the rest of the year.
Technically, people are only allowed to sign up after the annual enrollment deadline if they have a qualifying reason – for example, if they lose their coverage because they lose a job or get divorced. But for most of its existence, the exchange did not verify whether midyear enrollees had a qualifying reason. Access Health began checking earlier this year.
But Wadleigh said the federal government has required those who sign up outside open enrollment to receive coverage while their qualifications are being verified. As a result, he said, people can still sign up and get medical care paid for by insurers before showing proof. Wadleigh said he thinks the exchange should instead prohibit people from receiving coverage until it is verified that they qualify for a midyear sign-up.
Changing the split individual market
Board member Paul Philpott suggested considering another idea: Requiring any insurer that sells plans through the state’s individual market to offer insurance through the exchange.
Currently, insurers can offer plans through the exchange or outside the exchange. While two insurers – ConnectiCare and Anthem Blue Cross and Blue Shield – sell plans through the exchange, others – including Aetna, Cigna and Golden Rule – only sell plans outside the exchange. And many people who don’t qualify for federal subsidies end up buying plans outside the exchange, Philpott noted.
Wadleigh also noted that some states are considering dropping their bronze plans, which typically have the lowest premiums available to most customers but have high deductibles.
How many of us in this room can afford a $10,000 deductible? he asked the committee, adding, “You can’t. So why offer it?”
He told the committee he received a letter from a 26-year-old customer who had a plan with a $10,000 deductible and was angry he received a large bill after going to the hospital. The customer probably would have fared better with a plan with a higher premium but a lower deductible, Wadleigh said.
He also suggested considering whether to allow insurers to charge higher premiums to people who use tobacco. In 2012, the exchange board opted against allowing it to be a factor in pricing.