It was just a year ago that the insurance industry fretted over potential losses from the new insurance market created by the Affordable Care Act.
Those days are over.
Insurance companies are rushing to join the health insurance marketplace in Ohio, giving consumers more choices at rates much lower than the doomsday predictions that accompanied the first open-enrollment period.
The growth in the marketplace, along with the expansion of Medicaid, has led to a huge drop in the ranks of uninsured Ohioans.
The second open-enrollment period begins Nov. 15. Ohio consumers will find a much broader selection of health plans in the state’s health exchange, which this year featured 12 insurers offering 200 plans in the individual market.
Beginning next year, 16 companies will sell more than 290 individual marketplace plans in Ohio with an average monthly premium of $372.86 — before premium tax credit subsidies offered by the federal government are included.
Ohioans who selected the most popular plan type in the marketplace this year paid an average premium of $111 a month, according to the Department of Health and Human Services (HHS). And more than half of Ohio enrollees had monthly premiums of $100 or less after the tax credits, HHS says.
Some companies, including Dayton-based CareSource, say this year’s premiums will be lower yet.
The nonprofit said individual rates for its CareSource Just4Me health plan would fall by 2.5 percent in the Dayton area next year, while its rates statewide would increase by less than 2 percent on average.
CareSource, which signed more than 30,000 new members in Ohio this year, will expand its marketplace business into Indiana and Kentucky next year.
One of the four new players in the Ohio marketplace is Dayton-based Premier Health — southwest Ohio’s largest hospital system — which is preparing to enter the health insurance business for the first time. Three other insurers — Community Insurance Corp. and Coordinated Health Mutual Inc., both of Ohio, as well as Time Insurance Co. of Milwaukee, Wis. — will also join the Ohio’s insurance exchange for the first time next year.
Ohio is one nine states that will have at least three new companies offering individual and family health plans in their marketplaces next year, according to HHS, which established exchanges in 36 states, including Ohio.
Nationwide, at least 25 percent more insurers will be selling plans next year in federally run marketplaces and in the 14 states, along with the District of Columbia, that operate their own state-run enrollment websites, the federal government says.
‘Still a profitable business’
Health insurers are rushing to join the marketplaces because they can’t afford to sit on the sidelines and let competitors gobble up the new business, said Ilir Hysa, a health industry analyst at Moody’s Analytics.
“Despite all the rules and regulations, at the end of the day, this is still a profitable business,” Hysa said. “These insurers can’t afford to continue to wait and see what’s going to happen. They have to start nurturing relationships now and creating a brand for themselves going forward because this is going to continue to be a profitable market.”
The current industry outlook for health insurers represents a stark contrast to the view before the initial launch of the health exchanges last October. Back then, many insurers expressed concerns that the marketplaces would attract mostly expensive new customers with pre-existing conditions, or that total sign-ups would be too small to justify a new business line.
Aetna, the third-largest U.S. health insurer and one of the largest employer-based health plans in Ohio, pulled out of Ohio’s health insurance exchange one day before the state announced the names of the companies that would participate last year, although it maintained a presence on the exchange through its newly acquired Coventry Health Care business.
A year later, Aetna has jumped back into Ohio’s exchange after watching enrollment surge under its Coventry division.
“As the health care environment continues to evolve, our focus continues to be on delivering competitively priced products and services that deliver value,” said Rohan Hutchings, a spokesman for Aetna in Ohio. “To achieve this goal, we are consolidating all of our exchange plans under the Aetna name in order to expand our footprint and better serve the needs of consumers in Ohio.”
Aetna — which will offer coverage in 18 Affordable Care Act exchanges next year, up from 17 this year — recently raised its profit forecast for the year on the strength of growing membership under the Affordable Care Act. Aetna joined UnitedHealth Group Inc. and WellPoint Inc. in posting third-quarter results that beat Wall Street expectations and raising their forecasts for 2014.
Meanwhile, the number of uninsured Ohioans has fallen to its lowest level in decades — from about 17 percent of the population in 2013 to about 11 percent, according to an Ohio Health Issues Poll conducted in August by Cincinnati-based Interact for Health.
Nationally, an estimated 7.3 million Americans have signed up for private health coverage through the exchanges, including more than 154,000 Ohioans who had signed up by the end of the first sixth-month enrollment period, according to HHS.
In addition, more than 400,000 Ohioans have signed up this year for Medicaid — the state-federal health program for the poor — under new eligibility guidelines made possible by the health care law and pushed through in Ohio by Gov. John Kasich.
Ohio’s declining uninsured rate is projected to decline further next year. Growth in the number of newly insured is expected to accelerate, based on projections form the The Congressional Budget Office, which provides nonpartisan analysis for the U.S. Congress.
The CBO expects about 13 million people to sign up for Affordable Care Act plans next year — more than double the current figure. And another 11 million people will be added in 2015 to Medicaid, from 7 million this year as a result of the law, the CBO said.
Several factors have contributed to the growth rate of the exchanges, including the penalties for those who don’t buy insurance and an influx of part-time workers who no longer can get insurance through their employers.
Moves by companies like Walmart, which announced last week that it will no longer provide coverage for employees who work less than 30 hours a week, have led to a shift of previously covered employees to the marketplace. Walmart had already been phasing out health coverage to part-time workers, so the latest announcement affected only about 2 percent of its workforce.
Big retailers like Target and Home Depot have already dropped coverage for part-time employees, and others are expected to continue reducing or eliminating health-care benefits where they can.
Under the federal law, employers with 50 or more full-time employees are required to provide health insurance coverage, but there is no such provision for part-time workers.
Another factor that drives the marketplace growth is the provision in the health care law known as the individual mandate. Penalties for Americans who don’t buy insurance will double in 2015 — to as much as 2 percent of an individual’s income.
Shorter signup period
Ohio consumers who want to sign up for coverage next year will have only three months to buy health plans on the exchange, or half the time they had last year.
Trey Daly, Ohio state director for Enroll America, said the national nonprofit has learned from last year’s open-enrollment period and plans to do a “better job of educating people on the Affordable Care Act and connecting them to assistance.”
Daly said one area of focus this year will be better outreach to Hispanics, who enrolled at a much lower rate than the general population this year. Daly said Enroll America hopes to recruit an additional 250 people, including those who speak Spanish, to volunteer as certified application counselors and navigators.
Enroll America has also introduced Get Covered Connector, an online scheduling tool for Ohioans to find nearby appointments with application counselors.
“We hope it will be easier to find enrollment assistance,” Daly said, especially as the open enrollment period is much shorter this year.