North Carolina

2019 OPEN ENROLLMENT ENDS (most states)

Time: D H M S

North Carolina has three insurance carriers offering individual market policies next year: Blue Cross Blue Shield, which holds a whopping 96% of the individual market; Cigna, which holds the remaining 4%, and newcomer Ambetter (aka Centene).

I ran a write-up on BCBSNC's preliminary 2019 rate request at the end of July. While they're lowering their 2019 premiums by 4.1%, they also made it very clear that yes, they'd be lowering rates even further if not for the ACA's individual mandate penalty being repealed:

BLUE CROSS NC FILES TO LOWER ACA RATES BY AVERAGE OF 4.1 PERCENT

Durham, N.C. – Blue Cross and Blue Shield of North Carolina (Blue Cross NC) announced today it requested an overall average rate decrease of 4.1 percent for 2019 Affordable Care Act (ACA) plans offered to individuals. The reduction marks the first rate decrease in the history of Blue Cross NC since entering the current individual market more than 25 years ago.

...Many factors went into the Blue Cross NC’s rate filing:

There are only two insurance carriers participating in the North Carolina individual market this year: Blue Cross Blue Shield and Cigna. That's expected to change for 2019, as Centene (aka Ambetter) is expected to jump into the NC market, but in terms of premium changes, it's just BCBS and Cigna which can be counted in my 2019 Rate Hike project.

Cigna hasn't released their 2019 filings publicly yet, but they only held around a 4% market share last year (around 21,000 enrollees) so unless they raise or lower rates by a huge amount, it's unlikely to move the needle much one way or the other.

The other 96% of the NC individual market belongs to Blue Cross...and they just issued a very public statement about their intentions for 2019:

BLUE CROSS NC FILES TO LOWER ACA RATES BY AVERAGE OF 4.1 PERCENT
31 Jul 2018

One of the big stories over the past few months has been the Trump Administration's attempts to strip away regulations on non-ACA compliant "Short-Term, Limited Duration" plans (by making them neither short-term nor of limited duration) and "Association Health Plans" (by recategorizing them from state-regulated, Small Group plans to mostly unregulated Large Group plans).

However, a couple of months ago I wrote about a brand-new law in Iowa which would take a third route towards skirting ACA compliance: Farm Bureau plans:

The Iowa Senate voted Wednesday to let the Iowa Farm Bureau Federation and Wellmark Blue Cross & Blue Shield sell health insurance plans that don't comply with the federal Affordable Care Act.

The new coverage could offer relatively low premiums for young and healthy consumers, but people with pre-existing health problems could once again be charged more or denied coverage.

As I noted last week, insurance carriers in North Carolina were supposed to have submitted their preliminary 2019 premium rate change filings as of May 21st. Unfortunately, as I also noted last week, those "deadlines" appear to be more "guidelines" in many states, with North Carolina among them; there's no publicly-available premium change data available yet.

However, as Louise Norris notes over at healthinsurance.org, there's some interesting news afoot in the Tar Heel State:

Looking ahead to 2019

Insurers that wish to offer individual market coverage in North Carolina in 2019 had to file rates and forms by May 21, 2018. The two insurers that offer 2018 coverage in the North Carolina exchange — Cigna and Blue Cross Blue Shield of North Carolina — have both filed rate for 2019. Although the filings do show up in SERFF, they have very little publically available data at this point.

Way back in May, Blue Cross Blue Shield of North Carolina submitted their initial 2018 rate requests to the state insurance department, and noted at the time that they'd normally only be requesting an 8.8% average rate increase...but that due specifically to Donald Trump's threat to cut off CSR reimbursement payments, they were asking for a 23.3% increase instead. I noted that this meant that about 60% of their increase request was caused by Trump's CSR threat.

Then, in August, they gave a somewhat more positive news update: They were lowering their requested rate hike to 14.1%. Basically, their latest numbers had come in and the balance sheet was doing quite a bit better than they had previously thought:

Blue Cross said May 25 that the 22.9 percent rate increase was based on the subsidies ending, along with claims data from the first quarter of 2017. It projected an 8.8 percent rate increase with the subsidies remaining in place.

Quick recap: As of 2013, the pre-ACA individual market consisted of around 10.7 million people. The vast majority of the policies these folks were enrolled in were not ACA-compliant for one reason or another, including not covering one or more of the 10 Essential Health Benefits (EHBs) required by the ACA, having annual/lifetime caps on benefits or any number of other reasons.

Under ACA regulations, non-compliant policies which people were enrolled in prior to March 2010 (when President Obama signed the ACA into law) were grandfathered in...that is, insurance carriers could continue to offer them to existing enrollees for as long as they wanted to, and existing enrollees could stay on them for as long as they wished, but they couldn't be offered to anyone else, and once a current enrollee dropped out of a grandfathered plan they aren't allowed to rejoin it later on. The number of "grandfathered" enrollees has gradually declined since 2013, of course, as people either move to other coverage, die off (hey, it happens) or the carriers decide to discontinue the policies altogether.

In late May, I noted that Blue Cross Blue Shield of North Carolina, which holds a near monopoly on the individual market in NC with around 95% of total enrollment, had submitted an initial rate hike request for 2018 averageing 22.9% overall. What was remarkable at the time is that while most carriers were pussyfooting around using euphamisms about the reasons for their excessive increase requests, BCBSNC was among the first to come right out and state point-blank that it's the Trump Administration's deliberate sabotage of the market--primarily via the threats to cut off CSR payments and to not enforce the individual mandate--that are responsible for over 60% of the increase. This is from their blog, not mine:

For 2017, North Carolina's unsubsidized, weighted average individual market rate hikes came in at around 24.2%. With carriers like Aetna, United Healthcare, Humana and Celtic all dropping out of the NC exchange market, there wasn't much math to do in order to find a weighted average: The only individual market carriers left were Blue Cross Blue Shield of NC, Cigna and "National Foundation Life Insurance", which is basically a non-entity shell company related to "Freedom Life", the less said about the better. Since Cigna only had around 1,200 indy market enrollees at the time (less than 0.5% of the total market share), that pretty much left BCBSNC as the only game in town, so their 24.3% hike was the whole shebang for the state.

While I've been embroiled in the sturm und drang at the national level, Louise Norris of healthinsurance.org has been reporting on some important stuff happening at the state level:

HAWAII:

Hawaii no longer has a SHOP exchange; Lawmakers consider bill to preserve the ACA and expand Medicaid to 250% FPL

As of 2017, Hawaii no longer has a SHOP exchange for small businesses. The State Department of Labor and Industrial Relations has an FAQ page about this.

...Hawaii’s waiver aligns the ACA with the state’s existing Prepaid Health Care Act. Under the Prepaid Healthcare Act, employees who work at least 20 hours a week have to be offered employer-sponsored health insurance, and can’t be asked to pay more than 1.5 percent of their wages for employee-only coverage (as opposed to 9.69 percent under the ACA in 2017). 

Blue Cross Blue Shield of North Carolina originally requested an 18.8% rate hike back in June, but after the Aetna pullout, they revised their request upwards to 24.3%. Cigna, which is expanding onto the ACA exchange next year, followed suit by bumping up their request from 7% to 15%.

I haven't seen any formal announcement from the NC Dept. of Insurance yet, but BCBSNC just posted the following blog entry announcing their 2017 rates...and it certainly looks like the 24.3% request was indeed granted as is:

Blue Cross and Blue Shield of North Carolina customers purchasing ACA plans on the individual market will see an average increase of 24.3 percent in their premiums for 2017, compared to this year’s rates. That’s higher than our original rate filing back in May (an 18.8 percent increase).

Back in June, the two carriers which will be participating in the North Carolina individual market next year (BCBS and Cigna) requested average rate hikes of 18.8% and 7% respectively. Since then, however, Aetna has dropped out of the indy market, which no doubt is a big part of the reason both of them have resubmitted higher rate requests:

Proposed rate changes for 2017 revised upwards

For the two carriers that are expected to participate in the exchange in 2017, the proposed average rate hikes for 2017 are:

  • Blue Cross Blue Shield of North Carolina: 18.8 percent 24.3 percent (new rates were filed in late August)
  • Cigna: 7 percent (based on current off-exchange plans) 15 percent (new rates were filed)

Aetna had proposed an average rate increase of 24.5 percent, but that is no longer applicable for exchange enrollees, as Aetna’s plans will not be available in the North Carolina exchange in 2017.

North Carolina's individual market, which only had 5 carriers participating to begin with this year, suffered a double blow recently when both UnitedHealthcare (155,000 enrollees) and Humana (3,272 enrollees) announced that they were dropping out of the market entirely next year (Celtic is also leaving the state, but they have literally just 1 person enrolled state-wide anyway). Fortunately, nature abhors a vacuum, so Cigna Health & Life Insurance decided to join the exchange for 2017. Cigna is already selling off-exchange individual policies, but only has fewer than 1,300 people enrolled in them at the moment. There's also a carrier called "National Foundation Life Insurance" which is raising rates 17.4%...but doesn't have a single person enrolled at the moment anyway, so I'm not sure what to make of that.

When UnitedHealthcare announced last month that they were making good on their threat last fall to pull out of the individual market in over two dozen states next year, it caused shockwaves across the health insurance industry. It is an important development, as around 800,000 people will be impacted.

When Humana announced last week that they plan on pulling out of the individual market in at least 5 states next year, it was interesting and a bit of a bummer, but not nearly as earthshattering, because only about 25,000 people will have to shop around and find a new carrier.

Today, it is my duty to announce that Celtic insurance has also decided to pull out of the entire individual insurance market (both on and off-exchange) across at least 6 states, including:

Ugh. Back in August I ran a ballpark estimate of the requested average rate hikes on the North Carolina individual market, and came up with 27% like so:

However, since then, 2 major NC insurers have revised their request upwards even further:

Two more health insurers in North Carolina are asking to increase their already-proposed rate increases. 

UnitedHealthcare, which had requested an average rate increase of 12.5 percent, now is asking regulators to allow an an average increase of 20.4 percent. The range is 2.5 percent to 50.3 percent.

Humana had requested 11.3 percent and is now asking for an average of 24.9 percent. 

IMPORTANT: See this detailed explanation of how I've come up with the following estimated maximum requested weighted average rate increases for this state.

As explained in the first link above, I've still been able to piece together rough estimates of the maximum possible and mid-range requested average rate increase for the North Carolina individual market:

BCBS of NC had previously requested an already-ugly 25.7% average rate hike, but has now asked to bump that up even more, to 34.6% overall.

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