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Today, most people get their health insurance through their work. But every year, more and more people are choosing to shop in the private market for individual health insurance.
For some individuals and families, there are some key advantages to individual health insurance over employer health coverage — such as affordability, portability and customization.
Whether you’re a single individual, you have a family, you’re self-employed, you’re a student or you’re just looking for the best health insurance plan for your needs, you might want to consider an individual health insurance policy.
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Types of Individual Health Insurance
Many health insurance shoppers don’t realize that there are many different types of health insurance. But it’s a good thing there are so many options because no one has the exact same health and budget needs as another.
There are two main kinds of individual health plans: managed care and traditional indemnity coverage:
- Managed care health insurance. This type of health insurance covers medical services from a specific network of doctors, hospitals and other health care providers. Common managed care plans include HMO (Health Maintenance Organization) plans, PPO (Preferred Provider Organization) plans and POS (Point of Service) health plans. With managed care plans, some policyholders can also open Health Savings Accounts (HSA) to save money tax-free for medical bills.
- Traditional indemnity coverage. Before managed care plans were created, traditional indemnity health insurance was the most common form of coverage. This type of health insurance covers medical care based on service rather than health care provider.
The main difference between these two forms of health insurance is that traditional indemnity plans provide the same coverage regardless of what doctor or hospital you visit, while managed care only covers care from particular health care professionals.
Comparing Plans from Multiple Health Insurance Companies
One of the biggest advantages individual health insurance has over employer coverage is the immense number of choices. With an employer, you might only have one or two plans to choose from. Not in the individual market — it offers hundreds of different options, each with varying benefits and rates.
With our service here at IndividualHealthQuotes.com, you’ll be able to compare multiple plan options from many health insurance companies. The agents in our network represent dozens of insurers including Aetna, Anthem Blue Cross Blue Shield, Assurant, Golden Rule Insurance Company, many Blue Cross and Blue Shield Companies, Time, PacifiCare, World Insurance, Humana, Mega Life and Health, Kaiser Permanente, Unicare, Vista Health Plans and more.
Each insurance company offers unique health insurance solutions, giving you a wealth of options to choose.
Keep in mind that each state has its own set of health insurance regulations and not every insurance company offers plans nationwide.
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Texas health insurance marketplace: history and news of the state’s exchange
Eight insurers offering coverage in 2018; Oscar will expand their coverage area in 2019
- Louise Norris
- Individual health insurance and health reform authority; broker
- June 22, 2018
Highlights and updates
Texas exchange overview
Texas uses the federally-run exchange at HealthCare.gov, and the state has taken a very hands-off approach with regards to implementing the ACA. Texas has not expanded Medicaid, and is one of just three states that leaves the rate review process for ACA-compliant plans to CMS (the state does also review filings to make sure they’re compliant with Texas law). Texas is also leading a 20-state lawsuit that challenges the legality of the ACA now that the individual mandate penalty will be repealed in 2019.
But Texas also has one of the highest exchange enrollments in the country. The state has a very large population, many of whom were uninsured pre-ACA. Only two states — Florida and California — have higher enrollment in their exchanges (not counting Medicaid) than Texas.
1,126,838 people enrolled in coverage through the Texas exchange during open enrollment for 2018 coverage, which was about 8 percent less than the year before.
Effectuated enrollment is always lower than the number of people who sign up during open enrollment. Effectuated enrollment in the Texas exchange as of July 2017 stood at 963,171, with 86 percent of those enrollees receiving premium subsidies to make their health insurance more affordable. The subsidies averaged $333 per month in 2017.
From 2010 to 2015, as a result of the ACA, the number of uninsured people in Texas declined by 1,781,000, according to an HHS report published in December 2016. The uninsured rate in the state was still the highest in the country by 2015, and the number of people who gained coverage would have been far higher if Texas had accepted federal funding to expand Medicaid under the ACA. But even without Medicaid expansion, the uninsured rate is significantly lower than it was prior to the passage of the ACA.
Looking ahead to 2019: Oscar’s coverage area will expand
Eight insurers offer plans in the Texas exchange in 2018. Rate filings for 2019 had to be filed by June 21, 2018, and are available in SERFF for most of the current exchange insurers, with the following average proposed rate changes:
- Celtic/Ambetter: 4.7 percent increase
- Blue Cross Blue Shield of Texas: The filing says the insurer is proposing a 10.5 percent decrease in rates. However, the Texas Department of Insurance had noted in the filing that “the prior average PMPM [per member per month] rate is listed as $585.42 and the requested average PMPM rate is $590.11. Please explain how this slight increase aligns with the stated -10.5% decrease in rates.” Additional rate filing data isn’t yet public, so it’s not yet clear whether BCBSTX is planning to increase or decrease their rates for 2019 (we’ve reached out to the insurer and to the Texas Department of Insurance for clarification; TDI has said that they cannot provide any additional information at this point, so there is still some uncertainty surrounding BCBSTX’s rate filing).
- CHRISTUS: 9.6 percent increase (23,000 members)
- Molina: 13.3 percent increase (236,564 members)
- Oscar: Rate change not yet public, but Oscar is expanding its coverage area in Texas (currently just San Antonio and Austin, plus off-exchange plans in Dallas).
- Sendero: 33.8 percent increase (25,000 members)
- SHA/FirstCare: 19.9 percent (17,000 members)
- Community Health Choice: Filing not yet public
As was the case for 2018, the Texas Department of Insurance did not instruct insurers on how to add the cost of cost-sharing reductions (CSR) to premiums for 2019. It has instead been left to each insurer’s discretion. Adding the cost of CSR only to silver plan premiums (in many cases, only to on-exchange silver plan premiums) is the most popular approach across the country, but insurers also have the option to add the cost of CSR to all plans.
Health care reform legislation
Texas only has legislative sessions in odd-numbered years. So although lawmakers in many states have been considering various health reform and health insurance-related bills in 2018, That has not been the case in Texas.
- HB214, which prohibits coverage for elective abortion on all major medical plans (including plans sold through the exchange) in Texas. Twenty-five states had already enacted similar legislation.
- SB2087, which authorized the state to reestablish a high-risk pool (Texas had a high-risk pool pre-ACA, but it was eliminated once health insurance became guaranteed-issue in the individual market), if and when federal funding becomes available. This legislation passed in May 2017, when it was still unclear whether Congressional efforts to repeal the ACA would be successful. They were not, but some of the bills that were under consideration at that point included provisions for at least some federal funding for state-run high-risk pools. SB2087 allows the state to seek federal funding for a high-risk pool, but legislation to provide such funding is no longer under consideration at the federal level. It could once again be under consideration in 2019 or beyond, if Republicans retain their majority in Congress after the 2018 elections.
- SB1406, which authorizes the state to submit a 1332 waiver proposal to the federal government, seeking permission to waive the actuarial value requirements that currently apply in the small group health insurance market. The idea is to allow small group plans to have a wider range of actuarial values, instead of having to conform to the current bronze, silver, gold, or platinum categories. The legislation was signed into law in May 2017, but the state had not submitted a 1332 waiver proposal as of May 2018, and the Texas Department of Insurance confirmed that there has been no action on this as of May 2018. The Texas Department of Insurance published a brief in early 2018 detailing several other potential 1332 waiver proposals that could be used to stabilize the individual market, but those proposals would need legislative approval, and the legislature won’t be in session again until 2019.
For 2018, there are eight insurers offering coverage in the Texas exchange, although most of them have very localized coverage areas and most counties only have one or two insurers offering plans:
- Blue Cross Blue Shield of Texas (HMO)
- Celtic/Ambetter (EPO)
- CHRISTUS (HMO)
- Community Health Choice(HMO)
- Molina (HMO)
- Oscar (EPO)
- Sendero (HMO)
- SHA/Firstcare (HMO)
- Freedom Life (PPO)
- Insurance Company of Scott and White (PPO)
- Scott and White (HMO)
- Vista (HMO)
2018 enrollment: Down about 8% from 2017, due to shorter enrollment period, federal funding cuts, and uncertainty caused by Congressional efforts to repeal the ACA
Texas exchange enrollment reached 1,126,838 people during open enrollment for 2018 coverage. The year before, 1,227,290 people purchased coverage through the Texas exchange during open enrollment for 2017 coverage, so 2018 enrollment represented a drop of about 8 percent. And it was down 13.7 percent from the state’s peak enrollment in 2016, when 1,306,208 people bought coverage in the Texas exchange.
These enrollment drops are similar to the national trend across states that use HealthCare.gov, where average enrollment declined by 5 percent in 2018. The shorter enrollment period (November 1 to December 15, as opposed to the three-month window that was used in prior years) and reduced federal funding for exchange marketing and enrollment assistance played a role in the enrollment declines, as did uncertainty about the future of the ACA, and in particular, the future of the individual mandate. The mandate penalty was repealed in December 2017 (after the end of open enrollment for 2018 coverage) as part of the GOP tax bill, but that repeal won’t take effect until 2019 — people who are uninsured in 2018 will still have to pay a penalty on their 2018 tax return unless they qualify for an exemption.
Although open enrollment for 2018 coverage ended on December 15, 2017, HHS announced in September 2017 that residents of areas affected by 2017 hurricanes and deemed by FEMA to be eligible for “individual assistance” or “public assistance” would have a special enrollment period (SEP) to sign up for coverage. The special enrollment period was initially scheduled to continue through December 31, 2017, but was subsequently extended through March 31, 2018, effectively extending open enrollment for people in affected counties by three and a half months.
53 counties in Texas (mostly along the Gulf coast, but also in the Dallas area) were deemed eligible for public assistance or individual assistance. Residents of those counties, along with people who lived in those counties when Hurricane Harvey hit Texas but had since relocated, were eligible to enroll in a 2018 plan through HealthCare.gov up until March 31, 2018.
Humana and Prominence left at the end of 2017; impact was minimal due to small market area
Ten insurers offered exchange plans in various areas of Texas in 2017, although Humana exited the individual market (on and off-exchange) at the end of 2017, and so did Prominence.
Humana only offered plans in ten of the 254 counties in Texas in 2017, however, so their exit did not impact most of the state. The counties where Humana plans were available in 2017 — on and off-exchange — are clustered in the Corpus Christi, San Antonio, and Waco areas. In each of those counties, there were two other insurers offering exchange plans (Christus and Blue Cross Blue Shield of Texas).
Prominence offered plans in 11 Texas counties in 2017, so as was the case for Humana, their exit did not impact most of the state. Most of the counties where Prominence offered exchange plans have fairly low populations, although Prominence plans were available in McAllen and Amarillo
Everyone who had exchange plans with Prominence or Humana in 2017 was eligible for a special enrollment period that lasted until March 31, 2018. These enrollees were automatically mapped to new plans by the exchange if they didn’t pick their own new plans during open enrollment. But they also still had the option to pick a different replacement plan until March 1.
Eight insurers remained in Texas exchange for 2018, average rate increases much higher than originally proposed, due to CSR funding cut
In most cases, Texas insurers filed rates in the spring/early summer 2017 that assumed federal funding for cost-sharing reductions (CSR) would continue in 2018. But by the time CSR funding was officially eliminated by the Trump Administration in October 2017, all of the Texas insurers had filed rates that were based on the assumption that CSR funding would not continue. Since the federal government is no longer funding CSR, the cost was added to premiums in virtually every state (insurers have to continue to provide CSR benefits, regardless of federal funding). CSR benefits are only available on silver plans, and adding the cost of CSR only to silver plans protects the majority of consumers, since premium subsidies grow in conjunction with silver plan premiums.
In some cases, the Texas filings make it clear that the cost of CSR was only being added to silver plans, and at least one insurer (CHRISTUS) filed an additional revised rate structure to ensure that the cost of CSR would only be added to on-exchange silver plans. Sendero’s rate filing indicated that they would market an off-exchange-only silver plan in addition to their exchange plans (off-exchange-only plans do not have to include the cost of CSR in their rates).
The insurers that offer plans in the Texas exchange implemented the following average rate increases for 2018:
- AmBetter (Celtic): 47.7 percent (187,155 members). Ambetter initially proposed an average rate increase of 21.3 percent, based on the assumption that CSR funding would continue. They later filed revised rates (which were deemed justified by federal regulators) with the assumption that CSR funding would not continue. Plans were available in 32 counties in the Texas exchange in 2017, but for 2018, that grew to 41 counties.
- Blue Cross Blue Shield of Texas: 20.43 percent (389,766 members). Blue Cross had proposed an average rate increase of 22.7 percent in late August (revised downward slightly from the 23.6 percent average increase they filed earlier in the summer). The proposed rate increase was slightly lower for Blue Advantage, and slightly higher for Blue Advantage Plus. Plans were available in the exchange statewide in 2017, and that continues to be the case for 2018.
- CHRISTUS Health: average rate increases range from 33.7 percent to 71 percent (25,000 members). Christus added the cost of CSR to their silver plans in a revised filing in early September, but then filed an additional revision that removed the cost of CSR from their silver plans sold outside the exchange, and concentrated it only on the premiums for their on-exchange silver plans. Those on-exchange silver plans are the ones with the largest average rate increase (71 percent). The rest of Christus’s plans have average rate increases that range from 33.7 percent to 58.1 percent. Christus Health expressed opposition to the GOP Senate health care bill (the BCRA) in late June.
- Community Health Choice: 49 percent. Community Health Choice had previously proposed an average rate increase of 26.4 percent, but that was based on the assumption that CSR funding would continue. The revised filing assumed that it would not, and the cost of CSR was added to silver plans. Community Health Choice also offers members a 10 percent discount on their premiums if they complete a Health Risk Assessment. To get the discount for 2018, members had to complete their Health Risk Assessment before the end of January 2018.
- FirstCare (SHA): 27.74 percent. (19,250 members). FirstCare’s initial rate filing had proposed an average rate increase of 19.6 percent.
- IdealCare (Sendero): 47.2 percent (projected 2018 membership is 456,000) Sendero had initially proposed an average rate increase of 25.72 percent, but their revised filing (dated September 22) was based on the assumption that CSR funding would no longer continue in 2018. Sendero plans were available in 8 counties in Central Texas in 2017, and the rate filing noted that Sendero’s plans had the most competitive premiums in that area. They anticipated that their prices would remain highly competitive in 2018. Their filing also indicated that in addition to their exchange plans, they would also market one silver and one platinum plan off-exchange only for 2018.
- Molina: 40.67 percent (251,266 members, but projected membership in 2018 is 205,444). Molina offered plans in nine Texas counties in 2017, and has continued to offer coverage in those same counties in 2018. Molina’s filing as of July 2017 indicated that they were already assuming that CSR funding would not continue in 2018, and also that they would not market any plans outside the exchange.
- Oscar:Average approved rate increases range from 26.3 percent to 44.7 percent. (22,846 members). In a revised filing dated August 10, Oscar indicated that their rates were based on the assumption that CSR funding would not continue in 2018. Oscar also has several new plans for 2018. After reducing their on-exchange 2017 coverage area to just a single San Antonio-area county (Bexar), Oscar expanded to two additional San Antonio-area counties (Comal and Guadalupe, according to their plan filing) for 2018. They also expanded into the Austin area, with both on and off-exchange plans. Oscar also offers off-exchange coverage in the Dallas area, as they did in 2017.
It’s important to note that rate increases are calculated before premium subsidies are applied. The ACA’s premium subsidies grow to keep pace with premiums (they’re based on keeping the second-lowest-cost silver plan in each area at an affordable level), so larger subsidies in 2018 are offsetting all or most of the premium increases for subsidy-eligible enrollees, as long as they were willing to switch plans if necessary in order to get the best value.
86 percent of Texas exchange enrollees are receiving premium subsidies (more than 964,000 people) in 2018, and those individuals are largely insulated from the impact of the rate increases. But the other 14 percent of the exchange enrollees, plus everyone who has coverage outside the exchange, is bearing the full brunt of the rate increases in 2018.
How premium subsidies make coverage affordable, and how subsidies vary in size from one area to another
Premium subsidies are designed to keep the cost of the second-lowest-cost silver plan at a level that’s affordable based on income, and uniform for everyone with the same income, regardless of where they live or how old they are.
As an example, a single person earning $40,000 a year will have to pay 9.56 percent of his or her household income for the second-lowest-cost silver plan in each area in 2018, regardless of other factors. That works out to about $318 per month in after-subsidy premiums. But the subsidy can be applied to any metal level plan in the exchange, so there is significant variation in net premiums after people make their plan selections during open enrollment.
As an example, consider two single people in Houston, and two in El Paso, all four of whom earn $40,000 each. In each city, one person is 40 and the other is 62. For all four of them, the second-lowest-cost silver plan in the exchange (which is a different plan from one area to another) is $318/month after premium subsidies are applied. But in Houston, the 40-year-old has to pay at least $189/month for a bronze plan, while the 62-year-old can get a bronze plan for as little as $27/month.
Similarly, in El Paso, the 40-year-old has to pay at least $194/month for a bronze plan, while the 62-year-old can get the lowest-cost bronze plan for just $39/month after the premium subsidy is applied.
These variations highlight the importance of comparison shopping each year during open enrollment, rather than letting an existing plan auto-renew.
2017 carriers and rates
Ten carriers offered plans in the Texas exchange in 2017, but most of them only offered coverage in a fraction of the state’s 254 counties. In the majority of the counties, there were one, two, or three carriers offering plans. There were no PPO plans available in the exchange in 2017.
Scott & White, Aetna, Cigna, and All Savers/UnitedHealthcare exited the state’s individual market at the end of 2016—details below.
Humana also exited exchanges in several states, but they continued to offer coverage in Texas in 2017, albeit only in ten counties, and with an average rate increase of more than 45 percent. And Humana ultimately exited the individual market in all of their remaining states, including Texas, at the end of 2017.
Allegian Health Plan’s approved rate increase for 2017 averaged 71 percent. But citing significant losses, the carrier announced their exit from the exchange just as open enrollment for 2017 got underway. They continued to offer HMO plans outside the exchange in just seven of the 254 counties in Texas in 2017.
Texas does not have an effective rate review program, so CMS (specifically, CCIIO) conducts the rate review for plans that are sold in the Texas exchange.
The following average rate increases were approved for plans in the Texas exchange in 2017 (some rates are different from those originally filed earlier in 2016, due to additional rate filings later in the year, and modifications made during the rate review process):
- AmBetter (Celtic): 15.38 percent
- Blue Cross Blue Shield of Texas: 44 percent to 48 percent, depending on the plan
- CHRISTUS Health: 17 percent to 30 percent, depending on the plan
- Community Health Choice: 21 percent
- FirstCare (SHA): 48.45 percent
- Humana: 45.35 percent ( leaving at the end of 2017 )
- IdealCare (Sendero): 28.9 percent
- Molina: 10.3 percent
- Oscar: 17 percent to 25 percent, depending on plan (coverage area is being reduced; on-exchange plans are not available in the Dallas area in 2017; Dallas-area Oscar plans are only available off-exchange in 2017. Plans are available on-exchange only in Bexar County — San Antonio)
- Prominence Health First: 31.2 percent ( leaving at the end of 2017 )
2017 benchmark rates up 18% = larger subsidies
Although average rate hikes in the Texas exchange are substantial in 2017, premium subsidies will offset some or all of the rate increase for eligible enrollees. Particularly in a market like Texas, where there are numerous plans available and a strong possibility that the benchmark plan (second lowest-cost silver plan) will be offered by a different carrier from one year to the next, it’s essential for enrollees to compare all of their options during open enrollment.
As of March 2016, nearly 84 percent of Texas exchange enrollees were receiving premium subsidies. HHS reported that for a 27-year-old enrollee, the average second-lowest-cost silver plan in the Texas exchange is 18 percent more expensive in 2017 than it was in 2016 (that’s a little lower than the national average increase of 22 percent for second-lowest-cost silver plans). Subsidies are tied to the cost of the second-lowest-cost silver plan, so Texas enrollees will see higher average subsidies in 2017, offsetting some or all of the rate increases (switching plans is often necessary in order to take full advantage of the rising subsidies; plan changes can be made at any time until January 31, but enrollments must be completed by January 15 in order to have the new plan effective February 1).
UnitedHealthcare exited at the end of 2016
UnitedHealthcare exited the exchange in Texas at the end of 2016, as was the case in most of the states where United offered exchange plans in 2016. The carrier is continuing to offer group plans in Texas, but not through the exchange, and is no longer offering any individual market plans in the state, on or off-exchange. United’s decision follows mounting losses in the ACA-compliant market, which the carrier deemed unsustainable.
According to a Kaiser Family Foundation analysis, United only offered plans in 30 of the 254 counties in Texas in 2016. But they were the counties with the most enrollees: 80 percent of Texas exchange enrollees had UnitedHealthcare as an option in 2016.
Although United offered exchange plans in 30 Texas counties in 2016, there were only eight counties where United offered one of the two lowest-cost Silver plans. The lowest-priced silver plans tend to be the most popular with enrollees.
According to the Texas Department of Insurance, three carrier entities were impacted by United’s exit. No plans are available in 2017 from these three entities in Texas:
- All Savers Insurance Company — 128,055 members in 2016
- UnitedHealthcare Life Insurance Company — 28,611 members in 2016
- UnitedHealthcare Insurance Company (SHOP exchange for small businesses) — small group products from UnitedHealthcare Insurance Company are still available off-exchange in 2017.
The member counts included both on and off-exchange enrollments, and were a relatively small portion of the Texas individual market (just on-exchange, there were 1.09 million enrollees in Texas as of March 31).
Aetna, Scott & White, Cigna, and Allegian also exited
In August 2016, Aetna announced that they would exit the exchanges in 11 of the 15 states where they had been offering exchange plans. Texas is one of the states where Aetna’s exchange enrollees had to secure new coverage. Off-exchange plans are still available from Aetna in 49 Texas counties in 2017.
Cigna confirmed by phone that their plans would only be available off-exchange in Texas for 2017. For Cigna’s HMOs, they had initially filed an average rate increase proposal of about 23 percent for 2017, but later filed a new average rate increase of 48.9 percent, which the federal government found to be “not unreasonable.” For EPOs, the average rate increase is about 35 percent. All of these rates apply to off-exchange plans only, so subsidies are not available to offset the premiums.
Allegian Health Plan announced their exit from the exchange just as open enrollment for 2017 began. They are continuing to offer HMO plans outside the exchange in just seven of the 254 counties in Texas.
Oscar reduced coverage area
Oscar has remained in the Texas exchange, but only in one county (Bexar) in San Antonio. They are no longer offering exchange plans in the Dallas area. They are offering plans in a total of four counties in Texas for 2017, but in three of them — all but Bexar — the plans are only available off-exchange.
Uninsured rate down to 16.8%
Prior to the ACA’s implementation, the uninsured rate in Texas was about 25 percent. By 2015, it had fallen to 16.8 percent, according to the Centers for Disease Control and Prevention. Texas still has the highest uninsured rate in the country, and the national average in 2015 was down to 9.1 percent. But Texas has made considerable progress in the last few years, despite the fact that the state still has not accepted federal funding to expand Medicaid under the ACA.
1.3 million enrolled for 2016, effectuated enrollment still over 1 million
1,306,208 people enrolled in private plans for 2016 through the Texas exchange during open enrollment. The total includes new enrollees as well as renewals. For perspective, total enrollment at the end of the 2015 open enrollment period was 1,205,174.
Overall, Texas had the second-highest 2016 enrollment in the country, but is trailing Florida by a significant margin – some of the reasons why are addressed in this Dallas Morning News article.
By March 31, effectuated enrollment stood at 1,092,650. That’s an attrition rate of about 16 percent, which is higher than the national average. But the effectuated enrollment total at the end of the first quarter of 2016 is still 13 percent higher than the effectuated enrollment total (966,412) at the end of the first quarter of 2015.
The Texas Hospital Association mounted a significant marketing campaign to get people enrolled in health insurance through the exchange, and their efforts seem to have paid off, particularly during the final enrollment push in late January. Across all 38 states that use Healthcare.gov, in the final week the 2016 open enrollment period, eight of the ten local areas with the fastest-growing enrollment numbers were in Texas: Corpus Christi, Harlingen, Laredo, El Paso, Odessa-Midland, San Antonio, Abilene-Sweetwater, and Lubbock.
Open enrollment ended January 31. Coverage for 2016 (including off-exchange coverage) is now only available for people who experience a qualifying event that triggers a special enrollment period. Although Native Americans can enroll year-round (through the exchange), as can anyone eligible for Medicaid or CHIP.
Fewer exchange PPOs in 2016, none in 2017
In some parts of Texas – including Houston – there were no PPO plans available on the exchange for 2016. And in 2017, there are no PPO plans available in the Texas exchange.
Following a similar trend that’s happening in many other states, Blue Cross Blue Shield of Texas decided to stop offering their individual PPO plans in 2016, and instead move to an HMO-only model. They retained their Blue Advantage HMO network, but the Blue Choice PPO network is no longer available to individuals who purchase their own coverage.
BCBS of Texas has 5 million members across the state, but most of them are enrolled in employer group plans. The PPO plans is still available in the employer group market, and grandfathered PPO plans in the individual market (those that were already in force in 2010 when the ACA was signed into law) were not impacted by the decision. But 300,000 people (possibly as many as 367,000) were transitioned to one of the HMO options offered by Blue Cross Blue Shield of Texas; they also had the option to shop around and select a plan from another carrier during open enrollment (incidentally, Ted Cruz was in this group, and there was quite a media circus regarding his plan).
BCBS of Texas said that the decision to end their PPO plans was not reached lightly, but in 2014, their individual market claims exceeded premiums by $400 million. Switching to an HMO model is expected to help the carrier keep their individual products sustainable under the new rules that prohibit medical underwriting.
Cigna and Human also opted to stop offering PPO plans, citing sustainability as their reason for switching to more cost-efficient HMO models. In Harris County, Houston – the fourth-largest city in the US – has no PPO plans available at all for 2016 in the exchange, despite having plans available from seven different carriers.
Scott & White Health Plan and Allegian were both still offering PPO plans in the exchange in 2016, but their plans were not available in all areas of the state. And both carriers exited the exchange at the end of 2016.
Roughly two thirds of the carriers that offered plans in the Texas exchange in 2015 were losing money, paying out more in claims than they’re collecting in premiums. Switching to and HMO model is one way that carriers can better predict their costs and keep claims expenses down.
2016 rates and carriers
According to a Milliman report, there are 14 carriers offering individual plans in the Texas exchange for 2016, up from 13 in 2015. But Milliman’s analysis eliminates multiple carriers that have one parent company. If we look at the rate changes on Healthcare.gov’s rate review tool and also check available plans around the state on Healthcare.gov, there are options available from at least 18 separate legal entities.
Texas is one of five states that does not conduct its own review of proposed premiums for exchange plans. Instead, HHS reviewed the submitted rates, approving some as-proposed, while making adjustments to others. Most of the carriers participating in the Texas exchange also offered plans in 2015, so their average rate changes are available on Healthcare.gov’s rate review tool. Rates decreased for five carriers, and increased by between 5 percent and 34 percent for the remaining carriers:
- All Savers: 16.1 percent rate increase ( a subsidiary of UnitedHealthcare; exiting at the end of 2016 )
- Allegian: 12.4 percent rate increase for PPO plans; 0.06 percent rate decrease for HMO plans
- Blue Cross Blue Shield of Texas: rate changes vary from a 3.7 percent decrease, to an 18.8 percent increase for HMO plans.
- CHRISTUS Health
- Cigna: 14 percent rate increase for EPO plans; 17.3 percent rate increase for their Local Plus plans (off-exchange)
- Community First: rate decreases that range from 2.1 percent to 9.2 percent.
- Community Health Choice: 5 percent average rate increase
- FirstCare (SHA): 12.6 percent increase
- Humana: 23 percent increase for HMO; 21 percent increase for PPO (off exchange); 30 percent increase for EPO
- IdealCare (Sendero): 5.1 percent decrease
- Insurance Company of Scott & White: 34 percent average rate increase (only 1,807 insureds in 2015)
- Molina: 6.7 percent rate decrease
- Prominence Health First
- Scott & White Health Plan: 32.4 percent increase (24,294 insureds in 2015)
- UnitedHealthcare ( exiting at the end of 2016 )
The average rate increases are before the application of any subsidy, and the vast majority of Texas exchange enrollees are receiving subsidies. It was vitally important to shop around during open enrollment, as subsidy amounts are tied to the price of the benchmark plan (second-lowest-cost silver plan).
Statewide, the average benchmark plan is 5.1 percent more expensive in 2016, which means subsidies are higher, but only modestly. If you’re on a plan that experienced a sharp price increase for 2016, it’s likely that your subsidy didn’t increase by enough to make up the difference in premium. But the good news in Texas is that in most areas of the state, there are exchange plans available from several carriers and consumers were able to shop around during open enrollment to find the best option.
Once all of the plan selections for 2016 were finalized, 84 percent of Texas exchange enrollees qualified for premium subsidies. Their average pre-subsidy premium was $344/month, but after subsidies, they are paying an average of just $87/month.
In 2015, 85 percent of Texas exchange enrollees qualified for subsidies. Their average pre-subsidy premiums were $328/month, and their average after-subsidy premiums were $89/month. Despite sharp variations in rate increases, the average amount that people with premium subsidies are paying for their coverage is virtually unchanged from 2015.
Texas targeted for increased enrollment
Dallas and Houston are among five metropolitan areas nationwide that were targeted by HHS for enrollment growth (the others are Chicago, Miami, and Northern New Jersey) in 2016. These are areas with particularly high numbers of uninsured residents, and HHS has designated them as places where enhanced outreach and education could result in significant new enrollments – and a corresponding decline in the uninsured rate. Texas still has the highest uninsured rate in the country: 20.1 percent according to Gallup.
A study published in late January 2016 found that more than 69 percent of uninsured Texans don’t have insurance because they can’t afford it. The study involved 1,500 uninsured adults, including people who are eligible for premium subsidies as well as those who are in the coverage gap because Texas has refused federal funding to expand Medicaid. For everyone in the coverage gap – not just in Texas, but also in the 17 other states where there’s a coverage gap, as well as Louisiana until Medicaid expansion takes effect – health coverage is not realistically available. People in the coverage gap aren’t eligible for premium subsidies in the exchange, and they aren’t eligible for Medicaid because their states have refused to expand coverage. As a result, they can only get health insurance if they can pay the full premium themselves, which is unlikely to be possible when people have incomes below the poverty level.
Exchange enrollees identified on ID cards
At the end of May 2015, the Texas state senate passed House Bill 1514, and Governor Abbott signed it into law the following month. The law became effective in September 2015, and requires insurance carriers to label policy ID cards with “QHP” (qualified health plan) if the plan was purchased through the exchange.
The initial version of the House bill called for two different designations for exchange-purchased policy ID cards: “QHP” for plans purchased without a subsidy, and “QHP-S” for plans purchased with a subsidy (86 percent of the exchange enrollees in Texas are receiving subsidies). But the version that was ultimately signed into law dropped the “S” and simply calls for identifying all exchange enrollees with the “QHP” designation.
Many provider organizations were in support of HB 1514, because there’s a 90 day grace period for subsidized exchange enrollees who fall behind on their premiums, as opposed to the 30 day grace period for plans purchased outside the exchange and for non-subsidized exchange plans. During that time, carriers have to pay claims from the first 30 days, but can retroactively deny claims from the following 60 days (assuming the patient doesn’t pay the past due premiums) and can require the provider to refund payments made during that time.
Supporters of the bill claim that the QHP designation simply serves to keep providers aware of the need to remind their patients to remain current with their premiums. But the QHP label lets providers know that chances are, the patient is receiving a subsidy and thus has a 90 day grace period to remain current on premiums. It’s not unreasonable to assume that some providers would then choose to not work with those patients. The bill has generated considerably controversy between provider organizations and consumer advocates.
Texas sues feds over Obamacare. Again.
In October 2015, Texas Attorney General Ken Paxton joined AGs from Louisiana and Kansas in filing a lawsuit against HHS Secretary Sylvia Burwell and IRS commissioner John Koskinen. The suit contends that the ACA’s Health Insurance Provider Fee amounts to an illegal tax on states, since most states utilize private health insurance carriers to operate Medicaid managed care programs. The ACA fee is levied on private health insurance carriers, but the money that states pay to the carries to manage their Medicaid programs is utilized to pay the provider fee as well.
In Texas, 87 percent of Medicaid enrollees are covered under private plans in the managed care system, so the state is effectively paying the provider fee for those enrollees. But ACA supporters note that the state has always paid carriers enough to cover whatever fees they’re required to pay – the reason this particular fee has resulted in a lawsuit is because it’s part of the ACA, which is much-hated by Texas leadership.
In January 2016, the federal government said that Texas, Louisiana, and Kansas have no standing in this case because the Health Insurance Provider Fee doesn’t mention states, and states aren’t required to contract with Medicaid Managed Care Organizations that are subject to the fee. The case was ongoing as of spring 2016.
Lawmaker tried to establish state-run exchange
Although Texas has generally resisted the ACA over the last five years, two bills were introduced in the 2015 legislative session that would create a state-run exchange in Texas. Texas State Representative Chris Turner, a Democrat from Arlington/Grand Prairie, filed HB817 and HB818 in January.
HB817 would have required the state to create an exchange if the Supreme Court had ruled that subsidies are not permitted in the federally-run exchange (King v. Burwell). HB818 would create a state-run exchange regardless of the Court’s position in King v. Burwell. Neither bill made it out of committee, but now that we know subsidies will continue to be available through Healthcare.gov, the need for a state-run exchange is no longer as pressing.
1,205,174 people enrolled in private plans through the Texas exchange during the 2015 open enrollment period – the third highest in the country, trailing only Florida and California. But not everyone paid their initial premiums, and for a variety of reasons, some people cancelled their coverage early in 2015. By the end of March, 966,412 people in Texas had effectuated coverage through the exchange; by the end of June, effectuated enrollments had dropped to 943,218. 84.5 percent are receiving premium subsidies, and 63 percent are receiving cost-sharing subsidies (only available on silver plans for people with incomes up to 250 percent of the poverty level).
Of the people who selected a plan during the 2015 open enrollment period, 57 percent are new to the exchange for 2015. The Texas exchange exceeded the HHS target of 940,000 enrollees by more than a quarter of a million people during open enrollment, and ever after the initial attrition in the early part of the year, enrollment remains above the target level.
An additional 146,548 people enrolled in Medicaid or CHIP through the exchange between November 15 and February 22, qualifying under the state’s unchanged guidelines, as Texas has not expanded Medicaid. Open enrollment continues year-round, but during the period from November 15 to February 22, the Texas exchange had the highest number of Medicaid enrollments of the states that have not yet expanded Medicaid (and only eight of the states that have expanded Medicaid had higher total Medicaid enrollment during that time).
Open enrollment for 2015 has ended, but 2015 coverage can still be purchased if you have a qualifying event, or if you’re Native American. In addition, Medicaid/CHIP enrollment is year-round for people who are eligible under the state Medicaid/CHIP guidelines.
2015 Texas exchange rates
A Commonwealth Fund analysis found an average rate increase of 5 percent in the Texas exchange for 2015. For silver plans, it was just 2 percent. Rate increases tended to be lower in urban areas of Texas.
In Houston, the 2015 benchmark plan (second lowest-cost silver plan) is still from the same carrier that offered it in 2014, but the lowest cost silver and bronze plans were both from different carriers in 2015. All in all, it pays to shop around during open enrollment in Texas, as there are significant differences in rate changes from one carrier to another.
For a 40 year old non-smoker, the average bronze plan in the Texas exchange in 2015 is $269 per month (pre-subsidy). This is slightly higher than the national average of $256.
New carriers and more plans for 2015
The exchange in Texas had 15 carriers offering plans in Texas for 2015, up from 12 in 2014. Only Michigan and Ohio have more carriers in their exchanges, with 16 each. There are an average of 31 plans available in each county in Texas for 2015, up from 25 in 2014. In Dallas county, there are 64 plans available, a huge increase over the 36 that were available in 2014.
Grandmothered plans may renew
In November 2013, the federal government announced that states could allow non-grandfathered, pre-2014 health plans (dubbed “grandmothered” plans) to renew again and remain in force in 2014. In March 2014, they issued another extension for these transitional policies, allowing states to let them continue to renew as late as September 2016. The majority of the states have accepted that proposition, but in 2014, Texas regulators simply didn’t issue any guidance whatsoever on the matter (in interviews with insurance officials in each state, Texas was alone in this regard – every other state took a position either for or against renewal of grandmothered plans).
Because Texas didn’t issue any guidelines for renewal of grandmothered plans, regulators initially said that grandmothered plans would not be allowed to renew in Texas in 2014. But eventually they reversed course on this, with the Department of Insurance simply noting that they do not object to carriers renewing grandmothered plans in accordance with federal guidelines. HHS has since issued additional extensions (at states’ discretion) for transitional plans, allowing them to renew as late as October 2019, and remain in force until the end of December 2019. Texas has not yet issued guidance on whether they’ll go along with the latest extension, but the state did confirm that the prior extension, allowing coverage to remain in effect through the end of 2018, would be allowed.
2014 enrollment exceeded 7o0,000
Enrollment in the Texas exchange skyrocketed to 733,757 by April 19, 2014 As of March 1, private plan enrollment in the Texas exchange had been at 295,000. The increase during March and the extension period in the first half of April was the largest of any state in the country. That followed January and February enrollment of more than 90,000 new enrollees per month in Texas.
Total enrollment in Texas was the second highest of the states where HHS is running the exchange, trailing only Florida.
An additional 141,494 exchange applicants had enrolled in Medicaid, despite the fact that Texas is not expanding Medicaid under the ACA (those applicants were already eligible under existing rules). Total enrollment – including private plans and Medicaid – was just over 875,000 people as of April 19.
Rates and carriers in 2014
Twelve carriers offered a total of 95 different health plans in the Texas exchange in 2014 (this increased to 15 in 2015), so residents have many options from which to choose and competition among carriers is helping to keep the rates below the national average. Not only are there a wide range of plans available in Texas, but there are also several big-name health insurance carriers participating in the Texas exchange, including Aetna, Cigna, Blue Cross Blue Shield of Texas and Humana.
There has been some concern that not enough doctors are accepting health plans purchased through the exchange, but in many cases it’s impossible for medical offices to know whether a plan was obtained in the exchange. But a USA Today article published in late October notes that doctors in Texas are pushing for a requirement that insurance id cards indicate whether a plan was purchased through the exchange, and what metal level coverage it is.
Exchange history and legislation
Former Texas Gov. Rick Perry formally notified the Department of Health & Human Services (HHS) in July 2012 that Texas would not implement a state-run health insurance exchange. In his notification letter, Perry —a long-standing opponent of the Affordable Care Act — called the ACA provisions “brazen intrusions into the sovereignty of our state.”
Texas State Representative Eric Johnson, a Democrat from Dallas, did introduce bills in early 2013 that would have created a state-run exchange and expanded Medicaid, but neither was successful. HHS is running the exchange in Texas, and the state is not expanding Medicaid.
The significant enrollment numbers in Texas are testament to a law that is working well, and its success is being praised by Texas Democrats. But Republicans in the state legislature have vowed to continue their fight against the ACA in the 2015 legislative session.
CMS announced on November 22, 2013 that Texas applicants can enroll in QHPs directly through insurers – bypassing the exchange website entirely – with premium and cost-sharing subsidies available for eligible enrollees (the federal data hub is used to verify identity and determine subsidy eligibility for enrollments that go directly through insurance carriers).
The Texas High Risk Pool (a health plan for people with pre-existing conditions that pre-dates the ACA) remained open for the first three months of 2014, after originally being scheduled to cease operations at the end of 2013.
In early January, the Perry Administration’s efforts to make it more difficult to be a navigator in Texas drew criticism from ACA supporters and Democratic lawmakers, who claim that Perry is simply trying to impede enrollment in the Texas exchange.
According to a Kaiser Health News article, Blue Cross Blue Shield of Texas has played a major role in educating state consumers about the federal health insurance marketplace. The Blues plan used many strategies to reach consumers: creating a website, launching a texting campaign, and engaging churches, community clinics, nonprofits, and other community organizations.
Texas health insurance exchange links
State Exchange Profile: Texas
The Henry J. Kaiser Family Foundation overview of Texas’ progress toward creating a state health insurance exchange.