10 Millon People Expected to Have Marketplace Coverage in 2016
The 2016 Health Insurance Marketplace open enrollment is right around the corner, opening on November 1, 2015. With premium rate increases well above 10% for 2016, it’s no surprise the 2016 enrollment projections for the Marketplace are estimated to increase by less than a million from the total current 2015 enrollment, bringing the total individuals enrolled by the end of 2016 to 10 million.
In the most recent press release from the U.S. Department of Health and Human Services (HHS) on October 15, 2015, HHS is aiming to enroll more than one out of every four individuals eligible for Marketplace insurance. It’s great news that more individuals will be enrolled, but 10 million is a rather conservative target set by HHS and significantly lower than the January 2015 Congressional Budget Office (COB) estimate of 21 million individuals. HHS anticipated the migration from employer-sponsored coverage to the Marketplace would be much more significant. Companies are still choosing to work with insurance companies directly to purchase health insurance as opposed to purchasing insurance through the Small Business Options Program (SHOP) or sending employees to the Marketplace to purchase health insurance on their own. This is contributing to the slower enrollment increase.
Starting in 2016, the definition of a small group employer will be increased to include companies having 51-100 employees. The enrollment increase we will see in 2016 will be due, in part, to this change. In previous years, these companies were classified as large groups and not subject to the Affordable Care Act (ACA) regulations. By changing the definition of a small group, it now requires companies having 51-100 employees to abide by the ACA regulations and will increase Marketplace enrollment. The annual tax penalty for not having health insurance will also be a driver for increased membership in 2016. The penalty for not having health insurance has been gradually increasing each year. The uninsured are becoming more aware of the tax penalty which will be applied to their annual income tax filing if they cannot provide proof of insurance coverage. For 2016, the penalty is $695 per person, or 2.5% of yearly income, whichever is greater. For each child under the age of 18, the penalty is $347.50. If 2.5% of your yearly income is greater, then the penalty will be capped at no more than the national average premium for a bronze plan. If your penalty is based on the per person/per child method, then the maximum penalty for a family is capped at $2,085. As the penalties start to increase, the more people with be inclined to purchase health insurance coverage.
For health plans, this means consumers are not just looking towards the Marketplace as the only channel to purchase health insurance. Health plans still need to be actively working with their sales brokers and potentially exploring new channels of enrollment, such as a private exchange. Redefining internal operations to support the changes implemented by the ACA should be the biggest focus for health plans right now. With the growing trend of members enrolling into a Qualified Health Plan (QHP), health plans need to be looking at transforming internal operations to support a more value-based outcome approach. This approach is driven by the company, provider, and membership knowledge acquired from internal data analytics.
The top three areas health plans should be focusing on are:
- Transitioning from a fee-for-service model to a value-based model
- Data management and analytics
- Risk adjustment operations
Ensuring all Americans have affordable healthcare is the core reasoning behind the ACA. The three areas listed above are starting points to help health plans keep the cost of healthcare down while ensuring individuals are offered affordable insurance with quality benefits.
Resources
Registration for the GHG 2016 Forum is now open! This year we are offering a tiered pricing schedule. Register between now and November 30 to receive the biggest savings at $795. Come December 1, the price increases to $1,095. Register today >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG’s weekly newsletter. Subscribe >>