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Mark Deschenes

This plan enhancer DOES cover maternity

By | Health Insurance, Parent Category II

Here’s how to make sure that pregnancy and complications from pregnancy are covered by your health insurance.

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PREGNANCY THAT IS NOT COVERED BY HEALTH INSURANCE – CAN IN TEXAS BE COVERED BY OUR SUPPLEMENTAL SICKNESSS INPATIENT PLAN UP TO $10,000

Pregnancy is no longer a difficult insurance issue! While Obamacare ACA plans do cover maternity, they’re HMO based in Texas, they’re expensive and your doctor probably doesn’t accept Obamacare.

Short Term Medical Plans – a great alternative to Obamacare – exclude normal maternity and only cover NON-pre-existing complications.

The Solution

National General Plan Enhancer DOES cover non-pre-existing maternity (both normal and complicated) as a payable benefit under the Sickness Inpatient Rider.  The catch – you must be admitted to the hospital for at 24 hours during delivery.  (Sorry, home births & birthing centers do not qualify.)

Complications of Pregnancy include the following:

  1. Conditions, requiring hospital confinement (when the pregnancy is not terminated), whose diagnoses are distinct from pregnancy but are adversely affected by pregnancy or are caused by pregnancy, such as acute nephritis, nephrosis, cardiac decompensation, missed abortion, and similar medical and surgical conditions of comparable severity, but shall not include false labor, occasional spotting, physician-prescribed rest during the period of pregnancy, morning sickness, hyperemesis gravidarum, preeclampsia, and similar conditions associated with the management of a difficult pregnancy not constituting a nosologically distinct complication of pregnancy; and
  2. Non-elective cesarean section, ectopic pregnancy which is terminated, and spontaneous termination of pregnancy, which occurs during a period of gestation in which a viable birth is not possible.

Need help sorting this out and making the right decision for you and your family?  Call us 1-800-257-1723 or click here to schedule an appointment.

 

Alcohol use can void your health insurance coverage

By | Health Insurance

An Alcohol Exclusion Law (AEL) gives insurance companies the right to deny coverage to any person who, at the time of injury, seeks medical attention under the influence of alcohol or any drug not currently prescribed to them by a physician.

drinking may affect your insuranceTexas currently has an Alcohol Exclusion Law in their insurance code. It is under the Uniform Accident and Sickness Policy Provision, UPPL, 1201.227: Intoxicants and Narcotics, for private insurance companies in Texas. The law even applies if alcohol is legally consumed and an injury is sustained.

Texas State law Explicitly forbids payment of a claim that is alcohol or drug-related. If your medical providers coded your claim as alcohol or drug-related you will need to dispute the diagnosis if you believe it’s incorrect.

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Example One:

An older woman is celebrating her 25-year wedding anniversary with her family. She legally drinks some wine with her meal. They finish the celebration and along with her husband, she walks to their vehicle. On the way, she catches her heel in a crack in the sidewalk and falls, breaking her wrist in the process. She is transported to the emergency room and treated for her injuries. If the doctor issues a blood test and that test is positive for alcohol in her system, her insurance company can deny payment under the Alcohol Exclusion Law even though she was only walking to her car and did not break the law nor was she drunk.

The National Association of Insurance Commissioners (NAIC), an organization of insurance regulators in the 50 states, adopted the Alcohol Exclusion Law as part of the UPPL model law in 1947.2 State could individually adopt this law as part of their insurance code should they choose. In 1955, Texas voted to make UPPL a part of the state insurance code. To date, 27 states explicitly allow Alcohol Exclusion Laws, 9 states implicitly allow Alcohol Exclusion Laws and 14 states plus the District of Columbia have prohibited the use of Alcohol Exclusion Laws.

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Example Two:

A youth under age 21 falls while at a party. They hit their head on the ground and get a black eye. They are transported to the hospital for stitches and examination. The doctor and nurses smell alcohol on the youth. Because of the AEL, the youth is not screened to identify risky drinking behaviors; insurance covers the expense. A year later, the youth is at the ER for a broken wrist and again smelling of alcohol. The wrist is treated; insurance covers the costs: no data, no screening, and no intervention. The cycle continues.

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Source: Texans Standing Tall, Inc. © 2009, 2011

Did you know that Texas provides low cost vaccines if your private insurance does not cover the cost?

By | Child Category I, Staying Healthy

HealthLifeDentalInsurance.com How To Get Low Cost Children's Vaccines

The Texas Vaccines for Children (TVFC) program provides low-cost vaccines to eligible children from birth through 18 years of age if your private insurance coverage does not include vaccines or only includes select vaccines.

The only requirement is that the children must be seen by a Federally Qualified Health Center (FQHC), Regional Health Clinic (RHC), or deputized clinic.

I recommend low-cost shots at our county health department.  I live in Bexar County San Antonio and I just took my kids.

Upon arrival, you get a clipboard.  Just fill in the child’s info, put your insurance information in and check the box “insurance does not cover immunizations”.

Bring your current UHC id card – and they will call to confirm that your insurance is in force and inquire to confirm that it does not cover vaccines.  Once they find out that vaccines are NOT covered they charge a very low fee – approximately $19 per series. The cost for my 12-year-old daughter, for 2 entire series, was $38.

It took about 30 minutes and they provide the complete shot record for school for free.

To learn more visit:  https://www.sanantonio.gov/Health/HealthServices/Immunizations/MainClinic and

https://www.dshs.texas.gov/immunize/tvfc/info-for-parents.aspx

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By | Health Insurance

Intelligent Investing

Need help sorting this out and making the right decision for you and your family?  Call us 1-800-257-1723 or click here to schedule an appointment.

36,000 retired teachers have left Texas health insurance program

By | Health Insurance
By Julie Chang – American-Statesman Staff

Updated: 10:25 a.m. Thursday, September 06, 2018 |  Posted: 6:37 p.m. Wednesday, September 05, 2018


State Rep. Donna Howard, D-Austin, listens to Brian Guthrie, executive director of the Teacher Retirement System of Texas, answer a question during a hearing of a House Approprations Subcommittee on Wednesday. In 2018, about 36,000 retired Texas teachers and their dependents opted out of the state health insurance program run by the system after increases to premiums and deductibles. RALPH BARRERA / AMERICAN-STATESMAN

State Rep. Donna Howard, D-Austin, listens to Brian Guthrie, executive director of the Teacher Retirement System of Texas, answer a question during a hearing of a House Appropriations Subcommittee on Wednesday. In 2018, about 36,000 retired Texas teachers and their dependents opted out of the state health insurance program run by the system after increases to premiums and deductibles. RALPH BARRERA / AMERICAN-STATESMAN

Highlights

  • Texas retired teachers saw more expensive health insurance plans through the state this year.
  • The state is considering further premium hikes, which Lt. Gov. Dan Patrick has spoken against.
  • The health insurance program for retired teachers faces a $410 million shortfall next budget cycle.

About 36,000 retired teachers and their dependents abandoned their state-created health insurance system this year after Texas officials enacted higher deductibles and premiums.

Most of the retirees who left were 65 or older and opted to choose cheaper Medicare plans elsewhere, putting the Teacher Retirement System of Texas’ health insurance system, called TRS-Care, and its remaining 230,000 members at risk of a bigger shortfall in the future.

In previous years, the number of retirees who dropped out of the system has been about 1,500 or less per year.

The system expects a $410 million shortfall in the 2020-21 budget cycle, system officials told a Texas House Appropriations subcommittee Wednesday.

“We need to find some sustainable revenue streams and not continually be looking at how do we alter our eligibility and our benefits packages to what I think is ultimately at the detriment of our retired teachers,” state Rep. Donna Howard, D-Austin, said during the hearing.

To stave off a $1 billion shortfall, the Legislature in 2017 injected $484 million into the system over the next two years, but lawmakers also increased premiums and deductibles for some retired teachers by paring down the number of health care plans, including eliminating a $0 premium plan.

After retirees complained to lawmakers about the higher costs later that summer, the Legislature during a special session added an additional $212 million to the system to lower premiums and deductibles, but it wasn’t enough to keep some retirees and their dependents in the system.

“The average per-retiree contribution rates to care increased by nearly 50 percent in 2018. That was a shock to the system for many of them and proved to be very expensive,” Brian Guthrie, executive director of the Teacher Retirement System, told lawmakers.

Why did costs grow?

The Teacher Retirement System board will consider at the end of the month increasing premiums by $600 per year starting in 2019 for retirees who are under age 65 and not eligible for Medicare. Guthrie said Wednesday that it’s unlikely the board will approve the increase.

This comes after Lt. Gov. Dan Patrick last month sent a letter to the board saying the Legislature would try to help fill the funding hole if the board forgoes the premium increases to those under age 65. The premium hikes would have dropped the expected 2020-21 shortfall from $410 million to $246 million.

Last session, system officials estimated the shortfall for the 2020-21 biennium to be closer to $700 million, but Guthrie said the figure was cut nearly in half partly as a result of lower than expected claim costs and renegotiated contracts with pharmacy benefits management companies.

Even so, teacher groups told lawmakers Wednesday the state needs more sustainable funding options.

Currently, TRS-Care is funded largely by contributions from the state, current and retired teachers and school districts based on total salaries paid to active teachers. Growth in teacher salaries hasn’t kept up with the cost of health care for retirees — 3 percent versus 7.5 percent, according to Guthrie — contributing to the system’s budget shortfall.

A third of the system was funded by the state during the current budget cycle and 40 percent by current and retired teachers.

Why are retired teachers leaving?

Tim Lee, head of the Texas Retired Teachers Association, told lawmakers that retirees over the age of 65 are having problems finding doctors who accept the state’s health insurance and have had trouble contacting TRS-Care representatives for help.

Agents with other insurance companies see the disenchantment and offer more desirable plans, he said.

“They are being bombarded by information as to staying in TRS-Care or leaving or buying an individual plan,” Lee said. “These are very confusing times for members.”

Currently, once retirees over age 65 opt out, they can’t buy health insurance from the system again. Monty Exter with the Association of Texas Professional Educators said the retirement system needs to eliminate that policy.

“To not let folks back into the system … is frankly against every free-market principle that a large majority of the legislators who make up this body have run on in the past,” Exter said.

Exter also suggested that the retirement system expand its list of free or low-cost prescription drugs for retirees.

Teacher groups have feared that if too many retirees, especially those who are healthy, opt out of TRS-Care, its unfunded liability will continue to balloon, which could translate into even higher costs for those retirees remaining in the system.

State Rep. Helen Giddings, D-DeSoto, said she didn’t want retirees sacrificing quality of care for cost savings.

“It seems to me that if you can’t afford it, that does indirectly affect the quality of the care that you get,” Giddings said.

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Democrats are out to sabotage the middle class on health care

By | Health Reform

Democrats are trying to ban low-cost health insurance that covers less than ObamaCare.

Betsy McCaughey, August 14, 2018health-care-trump
Betsy McCaughey is a senior fellow at the London Center for Policy Research.

Democrats claim they’re protecting the public from what Sen. Chuck Schumer calls “junk insurance.” Don’t believe it.

In truth, they’re sabotaging middle-class consumers who’ve been priced out of ObamaCare.

The Affordable Care Act requires all health plans to cover 10 categories of medical care that Washington politicians deem “essential.” Everything from maternity (even if you’re in your 50s) to substance-abuse treatment. It’s like passing a law saying the only car you can buy is a fully loaded SUV. Some people just need wheels.

If you need health insurance, basic coverage without the costly extras sure beats being uninsured.

Trouble is, ObamaCare is a budget buster. Premiums for 2019 will be about triple what they were six years ago. Not a problem for buyers who get subsidized by Uncle Sam. But it’s a big problem if you earn more than $48,560 individually or $65,840 as a couple, and can’t get a subsidy.

One out of every five of these unsubsidized ObamaCare customers dropped their insurance last year and went uncovered, a trend predicted to worsen this year. Not that Schumer and the rest of Congress feel the pain. They get their own sweetheart deal.

Meanwhile, the middle class is becoming the new uninsured. Somebody needs to remind the Democratic Party that poor lives matter but so do middle-class lives.

Enter Trump. On Aug. 1, the administration announced regulatory changes that’ll allow sticker-shocked consumers to buy “short term” health plans without costly extras like newborn care and pediatric dental coverage that are mandatory (even for single guys) in ObamaCare plans. The short-term plans, which can last three years, will cost less than half what ObamaCare costs, in some cases only a quarter as much. About 600,000 consumers are expected to snap up these lower-cost plans in the first year, 2 million by 2023.

Disregard panicky predictions that consumers who don’t read the fine print will get a rude awakening. Trump’s regulations require exclusions to be spelled out in huge typeface no one can miss. Buyers will know what they’re not getting before they sign up.

How about Dem Sen. Tammy Baldwin’s rants about “junk” coverage? False. These low-cost plans will probably provide better access to hospital and doctors than ObamaCare plans, which often exclude specialty hospitals like MD Anderson Cancer Center in Texas and Memorial Sloan Kettering Cancer Center in New York, and include only doctors who take bargain-basement Medicaid fees.

Schumer tries to claim people with pre-existing conditions will be harmed because their ObamaCare premiums will rise as healthy people leave for less-costly alternatives. Sorry, senator, that’s another whopper. According to America’s Health Insurance Plans, the impact will be nearly imperceptible — under 2 percent.

Never mind hard facts. The Democratic Party is determined to outlaw low-cost alternatives to ObamaCare. They’re taking their battle to the states, which have the authority to ban these plans. Hawaii, Maryland, Connecticut and Washington state recently slammed the door on them. California is expected to follow. Consumers in most states will be free to buy low-cost options thanks to the Trump regulatory change, but not in these health-insurance gulags.

New York is the worst. Consumers here have the least freedom of choice and pay practically the highest premiums in the country. Even before ObamaCare, New York legislators pandered to interest groups by requiring that all plans cover a huge range of services.

Here’s how it works: Lobbyists get paid by chiropractors, infertility experts and other interest groups to push for mandatory coverage, and state legislators rake in contributions and accolades for going along. Everybody wins but John Q. Consumer, the middle-class chump who gets clobbered when he buys insurance.

Meanwhile, people who live in states with more health-insurance freedom will be saving thousands of dollars a year.

 

Trump Throws A Life Belt To People Who Buy Their Own Health Insurance

By | Health Insurance, Health Reform

new Treasury ruling will allow people to buy health insurance that has lower premiums, lower deductibles and broader networks of providers.1st-HHS-Graohic

John C. Goodman Aug 6, 2018, 06:00 am

For the first time since the enactment of Obamacare, people will be able to buy insurance that meets individual and family needs rather than the needs of politicians and bureaucrats. They will also be able to pay actuarially fair premiums.

These new plans are predicted to be popular, with the expected number of enrollees ranging from 1.9 million (Medicare’s chief actuary) to 2.1 million (Urban Institute). The Congressional Budget Office and the Joint Committee on Taxation put the number at 2.0 million.

So, who could be against this welcome opportunity? Answer: Almost everyone, except the people who plan to buy the insurance, that is.

The opponents include Blue CrossAHIP (the insurance industry’s trade group) and virtually every other stakeholder. Before finalizing the rule, the government received about 12,000 comments. According to an analysis by the Los Angeles Times, 98% of them were negative. “Not a single group representing patients, physicians, nurses or hospitals voiced support,” the newspaper noted.

Think about that. Roughly 2 million people are about to get the opportunity to buy insurance that meets their needs for a fair price and virtually every special interest in the entire health care system wants to stop them.

Why is that? Explanation below. But remember, there was a reason why the Berlin Wall was manned by armed guards for so many years, keeping people from crossing to freedom.

The ruling pertains to “short-term, limited duration” health plans. These plans are exempt from Obamacare regulations, including mandated benefits and a prohibition on pricing based on expected health expenses. Although they typically last up to 12 months, the Obama administration restricted them to 3 months and outlawed renewal guarantees that protect people who develop a costly health condition from facing a big premium hike on their next purchase.

The Trump administration has now reversed those decisions, allowing short-term plans to last up to 12 months and allowing guaranteed renewals up to three years. The ruling also allows the sale of a separate plan, call “health status insurance,” that protects people from premium increases due to a change in health condition should they want to buy short-term insurance for another 3 years.

By stringing together these two types of insurance, people will likely be able to remain insured indefinitely. The new plans will probably include most doctors and hospitals in their networks. And they are likely to look like the kind of insurance that was popular before we had Obamacare.

In explaining the motivation for the ruling, the Treasury Department document points to an “alarming” 20% decline last year in the number of people who are enrolled in the individual market and not getting subsidies (e.g., an individual earning more than $48,160). In some states, the decline was even worse, with enrollment dropping by more than 40% in six states, including a 73% decline in Arizona.

These are the classic symptoms of a death spiral. Over the past four years, many people have seen their insurance premiums double and in some cases triple, while the networks have shrunk so much that they omit the best doctors and the best hospitals.

The Treasury document says that in half the counties in the country, there is only one monopoly insurer. In most cases the insurer is a Medicaid contractor. The plans they are selling look like Medicaid, or something even worse.

So why are so many organizations opposed to giving people a way out?

Because most people in health care believe in private sector socialism, at least when they are not advocating public sector socialism. They don’t want you to be able to buy health insurance for a fair premium, the way you buy life insurance, homeowner’s insurance, or any other kind of insurance.

In short, they want the healthy to over-pay so that the sick can underpay. And the only way that can happen is if the healthy are trapped with no means of escape.

Put differently, the Obama administration and Democrats in Congress wanted to give a gift to a small number of high-cost patients who migrated from group plans to the individual market and faced exclusions, riders or outright denial of coverage. The goal was commendable, but they didn’t want to pay for it with taxpayer dollars. Instead, for the last four years, they have been trying to pay for this benefit by pushing the cost off on other insurance buyers.

The individual market is a small part of the market for private health insurance – only 5% to 6% of the total. Yet the states have been allowed to end their risk pools and dump those enrollees into this market. Similarly, cities and counties and large employers have been able to end their post-retirement health plans and send their high-cost retirees to the individual market. Chronic patients in employer plans also now have an opportunity to go to the individual market for subsidized insurance.

These developments have caused premiums to skyrocket, deductibles to soar, and created a race to the bottom on quality and access to care.

Take the case of an Iowa teenager with a rare case of hemophilia. This one patient cost Wellmark Blue Cross & Blue Shield $1 million a month and was responsible for 10 percentage points of Wellmark’s 43% premium increase last year in Iowa’s tiny individual market. It helped spur the insurer’s complete withdrawal from the market this year.

This is an example of a social problem that society as a whole should resolve. There is no reason to make the small number of people who buy their own insurance shoulder the entire cost, and to build the health equivalent of a Berlin Wall in an effort to keep them from paying actuarially fair prices for insurance that meets their needs.

I am one of the nation’s leading thinkers on health policy. I am a Senior Fellow at the Independent Institute and author of the widely acclaimed book, Priceless: Curing the Healthcare Crisis. The Wall Street Journal calls me “the father of Health Savings Accounts.”

Short-Term Plans Rule Flips the Political Narrative on Health-Insurance Protections

By | Health Reform
By Michael F. Cannon

The usual narrative is that Democrats support consumer protections and Republicans oppose them. Today’s short-term plans final rule flips that narrative: Republicans are expanding consumer protections, and Democrats are opposing them.

Today’s rule reverses a 2016 Obama rule. The Obama rule reduced consumer protections in short-term plans by exposing sick patients to medical underwriting. Before that rule, consumers could purchase short-term plans that lasted 12 months. If they developed a serious illness, their plan could cover them until the next ObamaCare open enrollment period, when they could purchase coverage without medical underwriting. The Obama rule restricted short-term plans to 3 months. It prohibited “renewal guarantees” that protect enrollees who fall ill from medical underwriting when they purchased a new short-term plan. As a result, the Obama rule left short-term plan enrollees who got sick with no coverage for up to 9 months: those who purchased a plan in January, and developed a serious illness in February, would lose their coverage at the end of March, and have no coverage until the following January. (Source: NAIC) This was by design: the Obama administration wanted to expose sick people in short-term plans to medical underwriting and lost coverage as a way of forcing consumers to buy ObamaCare coverage instead. That’s at least a little messed up.

Today’s rule allows short-term plans to last 12 months and offer renewal guarantees. It therefore allows short-term plans to protect the sick from medical underwriting for an additional 9 months—indeed, “issuers may offer coverage under a short-term, limited-duration insurance policy for up to a total of 36 months, without any medical underwriting or experience rating beyond that completed upon the initial sale of the policy”—and allows renewal guarantees to protect them from medical underwriting indefinitely. Protecting the sick from medical underwriting has long been a goal of Congress.

So, to recap, Republicans are expanding consumer protections, and Democrats are opposing an expansion of consumer protections.

Weird, isn’t it?

More Affordable Health Insurance Options On Their Way!

By | Health Reform

downloadTrump Administration Delivers on Promise of More Affordable Health Insurance Options

HHS final rule on short-term, limited-duration insurance brings more flexibility and choices to consumers

On Wednesday, the departments of Health and Human Services, Labor and the Treasury issued a final rule to help Americans struggling to afford health coverage find new, more affordable options. The rule allows for the sale and renewal of short-term, limited-duration plans that cover longer periods than the previous maximum period of less than three months. Such coverage can now cover an initial period of less than 12 months, and, taking into account any extensions, a maximum duration of no longer than 36 months in total. This action will help increase choices for Americans faced with escalating premiums and dwindling options in the individual insurance market.

“Under the Affordable Care Act, Americans have seen insurance premiums rise and choices dwindle,” said Health and Human Services Secretary Alex Azar. “President Trump is bringing more affordable insurance options back to the market, including through allowing the renewal of short-term plans. These plans aren’t for everyone, but they can provide a much more affordable option for millions of the forgotten men and women left out by the current system.”

In a recent release of three reports on the current state of the individual insurance market, Centers for Medicare & Medicaid Services (CMS) data reveal serious problems. While enrollment data show stable enrollment for subsidized exchange coverage, the number of people enrolled in the individual market without subsidies declined by an alarming 20 percent nationally in 2017, while at the same time premiums rose by 21 percent. Many state markets experienced far more dramatic declines, with unsubsidized enrollment dropping by more than 40 percent in six states, including a 73 percent decline in Arizona.

These troubling trends were besetting individual markets as President Trump took office, which led the President to issue the executive order “Promoting Healthcare Choice and Competition Across the United States” in October 2017. The executive order seeks to address the failings of the ACA, which severely limited the choice of healthcare options available to many Americans and produced large premium increases in many state individual markets for health insurance.

“We continue to see a crisis of affordability in the individual insurance market, especially for those who don’t qualify for large subsidies,” said CMS Administrator Seema Verma. “This final rule opens the door to new, more affordable coverage options for millions of middle-class Americans who have been priced out of ACA plans.”

Short-term, limited-duration insurance, which is not required to comply with federal market requirements governing individual health insurance coverage, can provide coverage for people transitioning between different coverage options, such as an individual who is between jobs, or a student taking time off from school, as well as for middle-class families without access to subsidized ACA plans. Access to these plans has become increasingly important as premiums have escalated for individual market plans, and affordable choices for individuals and families have dwindled.

The average monthly premium for an individual in the fourth quarter of 2016 for a short-term, limited-duration policy was approximately $124, compared with $393 for an unsubsidized individual market plan.

The final rule can be found here: https://s3.amazonaws.com/public-inspection.federalregister.gov/2018-16568.pdf – PDF

A fact sheet on today’s proposed rule can be found here: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2018-Fact-sheets-items/2018-08-01.html

** People using assistive technology may not be able to fully access information in this file. For assistance, contact digital@hhs.gov.

Changes in Enrollment in the Individual Health Insurance Market

By | Health Insurance, Health Reform

The Affordable Care Act (ACA) expanded health insurance coverage in part by prohibiting discrimination against people with pre-existing conditions and offering subsidies to low-income people purchasing through newly-created exchanges on the individual insurance market. In this analysis, we use publicly-available federal enrollment data and administrative data insurers report to the National Association of Insurance Commissioners (as compiled by Mark Farrah Associates) to measure changes in enrollment in the individual market before and after the ACA’s coverage expansions and market rules went into effect in 2014 through the first quarter of 2018.

The individual market comprises coverage purchased by individuals and families through the ACA’s exchanges (Marketplaces) as well as coverage purchased off-exchange, which includes both plans complying with the ACA’s rules and non-compliant coverage (e.g., grandfathered policies purchased before the ACA went into effect and short-term plans). It is a relatively small market as a share of the U.S. population, with about 10.6 million people enrolled in 2013 before the ACA went fully into effect1.

Our analysis finds that, after increasing substantially (by 64% to 17.4 million people in 2015) following implementation of the ACA, enrollment in the individual market remained relatively unchanged in 2016 (at 17.0 million) then declined by 12% to 15.2 million in 2017. Enrollment has continued to fall in early 2018: first quarter enrollment has declined by 12% in 2018 compared to the first quarter of 20172. Much of this decline in overall individual market enrollment was concentrated in the off-exchange market, where enrollees are not eligible for federal premium subsidies and therefore were not cushioned from the significant premium increases in 2017 and 2018. Despite the recent decline in overall individual market enrollment, there are still 14.4 million people enrolled as of the first quarter of 2018, compared to 10.6 million people in 2013.

Changes in Enrollment through 2018

As the ACA market rules and premium subsidies were implemented in 2014, there was significant growth in enrollment on the individual market. For the first time in nearly all states, people with pre-existing conditions could purchase coverage on an open marketplace and low-income people were eligible for tax credits to help pay their premiums and reductions in their cost sharing. In addition, many people who went without insurance coverage had to pay a tax penalty. As of 2014, health plans had to follow new rules that standardized benefits and guaranteed coverage for those with pre-existing conditions when selling coverage to new customers (known as “ACA-compliant” plans). Following these changes, individual market enrollment increased substantially, expanding from 10.6 million members on average per month in 2013 to 17.4 million members in 2015 (Figure 1)3. This included an estimated 3.5 million people in non-ACA compliant plans — including short term plans, grandfathered plans, and plans purchased before October 2013 that were allowed to continue under a federal transition policy at the discretion of states and insurers.

In 2016, total individual market enrollment was relatively unchanged from the previous year (at 17.0 million), though there was an apparent shift from non-compliant to ACA-compliant plans. In 2016, enrollment in non-compliant plans decreased by 1.3 million (38%), while ACA compliant enrollment (including both on and off-exchange plans) increased by 1 million people.

Enrollment in the total individual market began to decline in 2017. Both compliant and non-compliant enrollment declined, suggesting that people ending transitional, non-compliant policies were not necessarily moving to the ACA-compliant market. In 2017, the individual market covered 15.2 million people on an average monthly basis, including 13.3 million people in compliant plans on and off the exchanges and 1.8 million people in non-compliant plans.

First quarter enrollment data from 2018 shows that total individual enrollment continues to decline, even as enrollment on the ACA exchanges has remained relatively stable (see Figure 3). 14.4 million people are enrolled in the individual market as of the first quarter 2018, 12% lower than the first quarter of 2017 – a drop of about 2 million.

Figure 1: Individual Market Enrollment, 2011 – 2017

Changes in On vs. Off-Exchange Enrollment

After peaking at 11.1 million people in 2016, exchange enrollment has declined somewhat but has largely remained stable. In the first quarter of 2018, 10.6 million people were covered on the ACA exchanges, including 9.2 million people receiving federal premium subsidies (Figure 2)4.

Figure 2: Q1 Exchange Enrollment, 2015 – 2018

Declining off-exchange enrollment accounts for much of the drop in individual market enrollment since 2016. Total individual market enrollment began to decline in 2017 and has continued to fall in the first quarter of 2018 (Figure 3). Total individual market enrollment declined by 2 million people (12%) from the first quarter of 2017 to the first quarter of 2018. All of this decline was in the off-exchange market, which fell by 2.3 million people (38%). Exchange enrollment increased slightly by 313 thousand people (3%), reflecting an increase in enrollment among subsidized enrollees and a decrease among those not eligible for subsidies5. The “silver loading” of premiums in response to termination of cost-sharing subsidy payments to insurers in late 2017 inflated premium subsidies in 2018 and made zero-premium bronze plans possible for many more people. This may have boosted enrollment among subsidized consumers in 2018.

Figure 3: Change in Q1 Enrollment, 2017 – 2018

Off-exchange enrollment includes ACA-compliant plans that are sold outside of the exchange but are part of the same risk pool. The primary distinction between on and off exchange ACA-compliant plans is that subsidies are only available through the exchange. To the extent that fewer people in good health buy off-exchange ACA-compliant plans, premiums in on-exchange plans are affected as well. Non-compliant plans – including grandfathered and short-term plans – that are not part of the ACA risk pool -are also included in off-exchange enrollment. In 2017, 3.6 million people were covered by off-exchange ACA compliant plans, and 1.8 million people had non-compliant plans6.

The decline in individual market enrollment coincides with significant premium increases in 2017 and 2018. In the early years of the ACA exchanges, insurers underestimated how sick the new risk pool would be and set premiums too low to cover their claims. A number of insurers then exited the market and the remaining insurers raised premiums substantially on average to match their costs (Figure 4). Our analysis of insurer financials showed the market was stabilizing by 2017 and insurers were starting to become profitable in the individual market for the first time under the ACA. Signs pointed toward the 2017 premium increases being a one-time market correction. However, premiums increased again in 2018, in large part compensating for uncertainty around enforcement of the individual mandate and the termination of cost sharing payments.

Figure 4: Average First Quarter Individual Market Monthly Premiums and Claims Per Person, 2011 – 2018

While the vast majority of exchange consumers receive subsidies that protect them from premium increases, off-exchange consumers bear the full cost of premium increases each year. In 2017, states that had larger premium increases saw larger declines in unsubsidized ACA-compliant enrollment (Figure 5), suggesting a relationship between premium hikes and enrollment drops.

No data are available to determine what is happening to people who have dropped off-exchange coverage. Some may now qualify for subsidies as premiums have risen, some may have obtained coverage elsewhere (e.g., through employer plans, or health care sharing ministries, which are not considered insurance and do not file any enrollment or financial information to regulators), and some may be uninsured.

Figure 5: State Changes in Average Benchmark Premium vs Unsubsidized Enrollment, 2016 – 2017

As off-exchange, unsubsidized enrollment has fallen, the total individual market has increasingly become dominated by subsidized enrollees. In the first quarter of 2018, nearly two-thirds of enrollees in the total individual market are subsidized (Figure 6).

Figure 6: Subsidized vs. Unsubsidized Share of Q1 Individual Market Enrollment

Discussion

Looking ahead to 2019, the repeal of the individual mandate penalty has raised concerns of further enrollment declines in the individual market, particularly among people who are healthier than average. The expected expansion of loosely-regulated short-term health plans will also likely siphon away healthy people, pushing premiums up further for ACA-compliant plans on and off the exchange.

While the majority of people on the exchanges receive subsidies and will be protected from premium increases, middle-class people who do not qualify for subsidies will feel the brunt of future premium increases. This is especially true of people with pre-existing conditions who likely would not qualify for short-term plans that base eligibility and premiums on people’s health.

The availability of premium subsidies – which rise along with premiums – is likely sufficient to keep the individual insurance market financially sustainable in the face of policy changes and enrollment declines. However, based on the current trajectory, the market is likely to be increasingly dominated by lower-income people and those with pre-existing conditions.

Methods

We analyzed publicly-available federal enrollment data from the Centers for Medicare and Medicaid Services (CMS), and insurer-reported enrollment and financial data from Health Coverage Portal TM, a market database maintained by Mark Farrah Associates, which includes information from the National Association of Insurance Commissioners (NAIC) and the California Department of Managed HealthCare. All total enrollment figures in this data note are for the individual health insurance market as a whole, which includes major medical insurance plans sold both on and off exchange.

Exchange and compliant enrollment are from the Centers for Medicare and Medicaid Services (CMS). Total individual market enrollment is from administrative data insurers report to the National Association of Insurance Commissioners, and compiled by Mark Farrah Associates: annual enrollment is from the Supplemental Health Exhibit and first quarter enrollment is from the Exhibit of Premiums, Enrollment, and Utilization for health companies and rolled over from the prior year Supplemental Health Exhibit for life companies. Off-exchange enrollment is estimated by subtracting exchange enrollment from total enrollment in the individual market. Non-compliant enrollment is estimated by subtracting compliant enrollment from total enrollment in the individual market. CMS does not collect enrollment data for off-exchange ACA compliant plans in Massachusetts or Vermont; in these states non-compliant enrollment was estimated by applying the national average share of non-compliant off-exchange members to statewide off-exchange enrollment.

Annual enrollment figures from 2011 – 2017 are for average monthly enrollment. Quarterly enrollment figures in 2018 are for effectuated enrollment (i.e., people who paid their first month’s premiums). Annual filings provide a more complete picture of the individual market and allow for estimates of compliant vs non-compliant enrollment. Quarterly filings provide a sense of how enrollment is changing on a more current basis. First quarter enrollment tends to be higher than average annual enrollment because the number of people who drop coverage throughout the year exceeds the number who purchase coverage through special enrollment periods outside of annual open enrollment.