SALT LAKE CITY — Following a tumultuous several months in which the Affordable Care Act avoided repeal, significant rate hikes were announced and an insurer left the federal exchange in Utah, carriers are urging people not to give up on finding health care coverage for their families.
As the fifth open enrollment period under the Affordable Care Act nears its launch Wednesday, Chad Westover, CEO of University of Utah Health Plans, says the condition of the federal exchange is "different than what we're seeing on the surface."
"Over 90 percent of the people receiving subsidies … will see no or little increase in their premiums," Westover told the Deseret News. "Although the premiums are going up on paper, the impact to the enrollee is mitigated."
Increases in monthly premiums for consumers on the federal and state exchanges have been highlighted by Republicans in Congress, who have unsuccessfully tried multiple times this year to repeal and replace the Affordable Care Act. The Utah Insurance Department reported last month that monthly rates would increase by an average 39 percent for 2018.
Many in the GOP, including Utah's Sens. Orrin Hatch and Mike Lee, have characterized rising premiums, higher deductibles and insurers leaving the exchanges as signs that the individual marketplace established by the Affordable Care Act is in a destabilizing spiral.
But University of Utah Health Plans has been bullish on prospects for a sustainable federal marketplace in Utah, increasing its presence from 16 to all 29 counties beginning in 2018 even as the number of insurers participating in the exchange has dropped from six in 2014 to two for next year. Westover said the company's data from 2016, the year it began offering coverage on the exchange, shows "we've done OK actually."
"We priced our product not for rapid growth in membership, but at a profitable level," Westover said. "We're not one of those plans that are in a dire financial position on the exchange, in part because we've priced (plans) correctly."
He said insurers who got into the federal marketplace in Utah when it first launched had a difficult time setting the right prices because it was difficult to accurately predict the risk profile of enrollees.
In general, those insurers predicted lower risks than they ended up being required to cover, Westover said. In combination with some promised federal funding being cut off unexpectedly and other government dollars expiring, that led them to leaving the market, he explained.
But with more data about enrollees to base predictions on, and without any built-in expectation of federal funding, he said the U. is confident about its long-term future on the exchange.
"As we understand more and more, the premiums and the costs (to insurers) will end up being more aligned and you'll end up seeing a good solid market," Westover said.
SelectHealth, which is offering plans to Utahns in every county in 2018 and is the only insurer to stay on the federal exchange in the state since its inception, is also emphasizing many consumers will see little change despite the reported increases.
"Our first message for people is: Stay covered. There is still value," said Heidi Castaneda, director of small employer and individual health plan sales at SelectHealth. "We really hope people don't see a renewal letter with the premium increase and give up because there are still a ton of options for people."
Jason Stevenson, spokesman for the Utah Health Policy Project, a nonprofit think tank that receives federal grant money to help people sign up for health insurance on the exchange, agreed with the insurers.
"This year is actually not as different as you might expect given all the controversy swirling from Washington, D.C.," he said. "A lot of people incorrectly believe the Affordable Care Act is crippled, going away. … That's not true in Utah."
He said last month that subsidies on the monthly premiums of qualifying Utahns "will reduce to eliminate" next year's rate increases. Currently, 86 percent of Utahns on the exchange qualify for subsidies, which cover an average of 72 percent of their monthly premium, according to Stevenson.
"The costs are (going to be) very competitive, much lower than people are going to think," he told the Deseret News on Friday.
However, Stevenson explained that people who make less than 100 percent of the Federal Poverty Level (and were intended to be recipients of Medicaid under the expansion aimed for by the Affordable Care Act), as well as those who earn more than 400 percent of that benchmark, are vulnerable to increases because they do not qualify for the subsidies.
President Donald Trump announced this month that, in 2018, his administration would not pay cost-sharing reduction monies that made insurers whole in exchange for keeping deductibles and other consumer obligations low. The federal government paid $7 billion in those funds last year.
But despite worry over insurers' future on the exchange without those payments, Westover noted that carriers in Utah, like in most other states, already established their 2018 rates assuming that the payments wouldn't come.
Also, while the withdrawn money has meant having to prepare higher premiums on some plans, he noted that under the design of the Affordable Care Act, federal subsidies people receive toward their premiums generally keep pace with any increases.
"The increase in the premiums is largely offset by the premium subsidies themselves. … It's one pocket or the other," Westover said.
The CEO also said he is not worried by seeing others who have thrown up the white flag recently while citing financial shortfalls. That includes Molina Healthcare, which announced in August it will stop offering plans on the exchange in Utah in 2018 — a move that will require 70,500 people statewide to find different insurance options by Jan. 1 if they intend to stay covered.
Insurers say there are unique challenges this year to ensuring a strong enrollment base to keep costs down for both consumers and insurers. Chiefly, that includes a shortened enrollment window; while it used to last through the end of January, it now ends Dec. 15. Procrastinators could be in for a nasty surprise if they wait too long, Westover warned.
"People may not realize that it's a shortened window," he said.
The federal government has also cut 90 percent of funding for its advertising campaign encouraging people to use the individual marketplace.
"We're trying to fill some of those gaps," Westover said, by aggressively educating people about the enrollment period.
Last month, the Trump administration also cut a grant to Take Care Utah — a group of organizations including the Utah Health Policy Project that works to enroll people in the federal exchange — by 61 percent.
"That really has hurt us and reduced … the number of people we have on the ground," Stevenson said.
Decreased enforcement of the federal mandate to purchase insurance could also present a hurdle in keeping young, healthy people in the exchanges, Westover said. Keeping that demographic is widely seen as important to reducing the amount of assumed risk and helping to keep premiums down, he said.
"President Trump has indicated he may instruct the IRS not to be too aggressive in enforcing the penalties associated with complying," Westover said.
There is also a technical impediment on the healthcare.gov website, Stevenson said: maintenance of the site almost every Sunday night beginning at 10 p.m. Mountain Time during open enrollment.
Stevenson has questioned some of these obstacles — particularly the slashing of Take Care Utah's funding and the reduction in advertising promoting use of the federal exchange — as efforts by the Trump administration to tear down the Affordable Care Act. He urged people to thoroughly investigate their options on the exchange anyways.
"Don't let political games in Washington, D.C., make you vulnerable to bankruptcy and losing everything you've got. Don't play their game," Stevenson said. "Really it's designed to break the system so that they can replace it. To break the system, they need few people to sign up. Don't play that game."
Stevenson, Westover and Castaneda all warned of the potentially dire financial consequences of deciding to gamble on health insurance and skip out on it for a year.
"You would hate to get yourself in a financial hole because of an accident or an unforeseen illness," Castaneda said.
She added that staying insured makes it more likely people will stay healthy in the first place by seeking out the preventive care they need.
Health plan shopping
Gold, silver and bronze plans on the federal exchange are tiered to reflect the quality of financial coverage offered, the general range of premiums charged, the provider network available and other factors. Under the intricate machinery of the Affordable Care Act, silver tier plans were hit the hardest in terms of rate increases.
That means consumers should be encouraged about the relative stability of both gold plans and bronze plans for next year, Castaneda said.
"One thing to really keep in mind with averages is they can be very skewed," she said of the 39 percent average jump in premiums.
The Utah Health Policy Project had reported that though there are variances throughout the state, silver plan premiums will increase an average 61.7 percent in Salt Lake County. Meanwhile, the organization said, gold plan premiums in the county are expected to be up 20.4 percent and bronze plans are expected to jump 19.1 percent.
Both Castenada and Stevenson advised those who currently have that level of plan to look into the possibility of switching to a new tier being introduced in 2018 called "enhanced bronze."
Stevenson said enhanced bronze plans have a higher deductible than silver plans, "but not as high as in regular bronze."4 comments on this story
Stevenson also recommended shopping for silver tier plans outside of the federal exchange, saying there are "off-market-place silvers that aren't showing the same increase in premiums."
Federal premium subsidies cannot go toward plans purchased outside the federal exchange, unlike on-exchange plans.
Lastly, Stevenson said, people can avoid the large premium jumps in silver plans by switching to "some gold plans (which) are actually cheaper than silver plans."
"This is sort of the nature of this year's upside down marketplace," he said. "This is one of the things where not shopping around could cost you $100 a month."