A STUDY OF AFFORDABLE CARE ACT …

[Pages:23]A STUDY OF AFFORDABLE CARE ACT COMPETITIVENESS IN FLORIDA

Patricia Born Florida State University

THE BROOKINGS INSTITUTION THE ROCKEFELLER INSTITUTE

Health Policy

A FIELD RESEARCH REPORT FEBRUARY 2017

Table of Contents

Section 1 ? State Context

3

Section 1.1 ? Exchange Characteristics

4

Section 1.2 ? Health Insurance Climate

4

Section 2 ? New Developments Entering the

6

Fourth Open Enrollment Period

Section 3 ? Selection of Local Sites

7

Section 4 ? Methodology

10

Section 5 ? Outcomes of Competition and

11

Highlighted Findings For Each Site

Section 5.1 ? Exchange Conditions

11

Section 5.2 ? Carrier Participation and

15

Plan Choice

Section 5.3 ? Premiums and Other Cost

17

Factors

Section 5.4 ? Networks

18

Section 5.5 ? Other Concerns

18

Section 6 ? Analysis

19

Endnotes

21

Support for this publication was generously provided by The Irene Diamond Fund. Brookings is committed to quality, independence, and impact in all of its work. Activities supported by its donors reflect this commitment and the analysis and recommendations are solely determined by the authors.

Section 1 ? State Context

Basic facts about Florida are presented in the table below.1,2,3,4,5,6,7,8,9

Table 1: Basic State Facts

Type of Exchange

Florida Snapshot

Federally facilitated marketplace

Expansion of Medicaid

No

Number of Rating Areas

67

Number of Insurers in 2017

5

Net Change in Number of Insurers (2014-

2017)

-3

Premium Increase (2016, silver plans) State Population and Rank (July 2015)

State Median Household Income and Rank (2015)

-9 percent (1st best) 20,085,300 (3rd)

$48,825 (41st)

Salient Health Facts Salient Health Policy Information

Florida has had one of the highest uninsured rates in the country. Since the exchange was implemented, Florida's federally facilitated marketplace has enrolled the highest number of eligible enrollees. The uninsured rate has reportedly dropped from around 20 percent in 2013 to 15.2 percent in 2015. This rate is still higher than the national average.

Florida opposed the ACA and refused federal funds for establishing an exchange.

Florida has not expanded Medicaid under the ACA.

Over 90 percent of enrollees in Florida received subsidies in 2016.

In 2013, Florida passed two regulations addressing navigator operations: (1) requiring fingerprinting and background checks for anyone wishing to serve as a navigator and (2) banning navigators from county public health facilities.

In March 2016, Florida enacted a consumer protection measure HB 221, which bans the practice of balance billing in situations where patients use an in-network facility but do not have the ability to choose a participating provider at that facility.

For 2014 and 2015, Florida's insurance commissioner had no regulatory authority over health insurance premium rates. Regulatory authority was reestablished for 2015.

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EXCHANGE CHARACTERISTICS Florida chose not to develop its own marketplace and therefore hosts the federally facilitated marketplace, . While the state may have had an opportunity to define rating areas, it defaulted to the county level, which is the level at which agents and carriers are licensed to conduct business. This resulted in 67 rating areas, which is significantly more than most other states. South Carolina has 46 rating areas, and Texas has 26. All other states have fewer than 20.

Rates and rate changes are filed with and reviewed by the Florida Office of Insurance Regulation (FLOIR), which has general authority over the exchange operations.

HEALTH INSURANCE CLIMATE Individual policies are sold both on and off the state's exchange. Blue Cross and Blue Shield of Florida (BC&BS of Florida/Florida Blue) has been the dominant carrier in Florida's individual health insurance market, with over 5 million members across the state. It was established over 70 years ago and is ranked highest in consumer satisfaction among health insurers across the country.10 It is the only carrier in Florida that offers plans in all marketplace rating areas.

Table 2: Major Health Insurance Carriers Based on Premiums Written in the Individual Market (on and off exchange), 2013-201511

Insurance Carrier

All Plans ? Top 10 BC&BS of Florida Humana Medical Plan Coventry Health Care of Florida UnitedHealthcare of Florida Health Options Molina Healthcare of Florida Preferred Medical Plan Aetna Health (a FL corp.) WellCare of Florida Amerigroup Florida Other Plans on the Exchange in 2015 Florida Health Care Plan Ambetter/Sunshine Health Humana Health of Florida AvMed

2013 Premium

2013 Market Share

1,126,671 20,624 0 110,498 22,189 0 51,536 124,653 111,636 79,915

60.20 1.10 0.00 5.90 1.19 0.00 2.75 6.66 5.96 4.27

8,728

0.47

0

0.00

85,754

4.58

24,869

1.33

2014 Premium

2,103,377 573,892 506,374 104,662 360,535 2,780 290,685 86,791 110,842 73,418

22,106 927 76,365 29,616

2014 Market Share

2015 Premium

2015 Market Share

46.84 12.78 11.28 2.33 8.03 0.06 6.47 1.93 2.47 1.63

2,778,693 1,036,825 706,681 626,128 568,121 403,475 201,152 116,434 96,240 60,587

40.72 15.20 10.36 9.18 8.33 5.91 2.95 1.71 1.41 0.89

0.49

24,997

0.37

0.02

37,595

0.55

1.70

56,439

0.83

0.66

54,914

0.80

Table 2 shows the total premiums and market share for Florida Blue and the other top 10 insurers for the period 2013-2015. Note that Health Options Inc. is a health maintenance organization (HMO) affiliate of

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BC&BS of Florida. Also included in the table are four additional carriers that are known to participate on the exchange but do not make the top 10 for overall business in individual health insurance.

The individual insurance market is highly concentrated, with 83.8 percent of the premiums written by the top five carriers. BC&BS of Florida grew significantly with the implementation of the exchange and remains the major carrier in the individual market, though premium data from 2015 indicates that its competitors may be gaining in market share. Humana's share of the market has risen from 1.1 percent to over 15 percent from 2013 to 2015.

Three insurance carriers were not operating in the individual market before the exchange: Coventry Health Care (acquired by Aetna in 2013), Molina Healthcare, and Ambetter/Sunshine Health (now Celtic Insurance Co.). These carriers now account for nearly 17 percent of premiums in the individual market. Coventry and Molina have a strong presence on the health insurance exchange but not in every rating area.

BC&BS of Florida is also the largest carrier in the group health insurance market, followed by Sunshine State Health, Health Options, Aetna Health, and Humana Medical Plan. The next two largest carriers in the group market, Neighborhood Health Partnership and Capital Health Plan, do not write individual coverage on or off the exchange.

It is interesting to note that four carriers--Molina, WellCare, Amerigroup, and Coventry--do not sell policies in the group health insurance market. However, these carriers have a significant presence in public health insurance programs (e.g., Medicaid). Table 3 shows the premiums written in Medicaid and Medicare for these carriers and other carriers that make up the top 10 in 2015. It is notable that only three plans listed below are not operating on the exchange, although carriers are affiliated with carriers that do: Florida True Health is an affiliate of Florida Blue and Simply Healthcare Plans is affiliated with Amerigroup. Florida MHS operates as an affiliate of Magellan Healthcare, Inc., which specializes in managed care and pharmacy benefits for patients with mental illnesses or multiple chronic health needs.

Table 3: Premiums Written in Medicaid and Medicare12

Insurance Carrier

2013

2014

2015

2013

2014

2015

Medicaid Medicaid Medicaid Medicare Medicare Medicare

WellCare of Florida

997,888 1,634,115 2,210,376 963,418 1,068,267 1,249,058

UnitedHealthcare of Florida 514,724 1,453,618 1,827,611 585,869 390,665 364,320

Sunshine State Health Plan 567,861 967,436 1,460,853 141

3,375

7,912

Humana Medical Plan

225,032 708,851 1,194,467 4,240,460 4,517,410 4,928,459

Amerigroup Florida

436,324 697,606 1,051,493 29,788 31,796 43,936

Florida True Health

10,464 9,897

941,971 0

0

0

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Carriers with experience in Medicaid may have expertise that enabled their participation in the marketplace. This is discussed further below.

Section 2 ? New Developments Entering the Fourth Open Enrollment Period

Several developments affect the exchange in Florida for the 2017 enrollment period. Two major insurers have exited the Florida exchange--UnitedHealthcare and Aetna (Cigna exited after 2015 and planned to re-enter in 2017 but did not). One new insurer, Harken Health, a subsidiary of UnitedHealthcare, was planning to enter the marketplace in south Florida, but withdrew its filing. As a result of these exits, some rating areas are offering plans from only one carrier--Blue Cross and Blue Shield of Florida--for 2017. Seven carriers are participating in Florida's marketplace for the 2017 plan year. Five are offering products both on and off the exchange while two are participating only in the marketplace. The carriers and total number of exchange products offered for 2017 are shown in Table 4.

Table 4: Participating Carriers and Number of Plans Offered (all metal levels), 201713

Insurance Carriers

On Exchange Only

BC&BS of Florida

0

Celtic Insurance Co.

0

Florida Health Care Plan

0

Health First Commercial Plans 0

Health Options

0

Humana Medical Plan

16

Molina Healthcare of Florida 5

Off Exchange Only

30 1 10 0 22 0 0

On and Off Exchange 26 18 33 64 20 0 0

The Florida Office of Insurance Regulation released the rate filings for carriers operating in the individual market, both on and off the exchange. Increases requested from the seven plans continuing for 2017 are shown in Table 5.

Across all plans, the average percentage change approved was 19.1 percent compared with an average increase of 9.5 percent in 2016.

In March 2016, Florida passed a consumer protection measure HB 221, which became law in April and took effect on July 1. The law has two important effects on the operation of Florida marketplaces. First, it bans the practice of balance billing, where a patient's ability to select a participating provider is limited. While balance billing had already been banned for enrollees in HMOs, the bill extends this protection to enrollees in preferred provider organization (PPO) and exclusive provider organization (EPO) plans. The bill also requires hospitals to identify providers who are in-network and explain to patients how to ensure their insurance plan will provide coverage.

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Table 5: Percentage Changes Requested and Approved for 201714

Carrier BC&BS of Florida

Average Percentage Change Requested

14.5

Average Percentage Number of rating Change Approved areas, 2016

(counties)

19.0

67

Celtic Insurance Co.

4.3

20.0

9

Florida Health Care Plan 12.3

15.4

4

Health First Commercial 8.4

11.7

4

Plans

Health Options

13.8

18.9

45

Humana Medical Plan

43.6

36.8

13

Molina Healthcare of

10.6

17.4

3

Florida

Section 3 ? Selection of Local Sites

During the period studied for this report, multiple carriers were operating in all rating areas for at least one of the years, but participation varies greatly across the state. Five rating areas were chosen to illustrate the variability of competitiveness and other market characteristics that may factor into the success of the marketplace, such as the income levels and health of the population. For example, Table 6 illustrates how these counties compare on several common health rating measures.

Table 6: Selected Health Measures, by Selected Rating Area15

Measure Adult smoking Diabetes prevalence Uninsured Children eligible for free lunch HS graduation

Duval 20% 12% 19% 47%

68%

Gadsden 18% 15% 23% 80%

Hillsborough 18% 11% 22% 49%

Miami-Dade 12% 8% 33% 63%

Orange 15% 9% 24% 47%

61%

73%

76%

74%

A recent report from the Robert Wood Johnson Foundation said Gadsden County is the least healthy county in Florida (St. Johns County, adjacent to Hillsborough County, is the healthiest). Table 7 below illustrates how premiums for the Florida Blue EPO (for 2016, the Blue Cross & Blue Shield EPO) have varied across these five areas since implementation.

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Table 7: Average Premium for Florida Blue/Blue Cross and Blue Shield of Florida: 40-Year-Old Purchasing Silver Plan, by Selected Rating Area, 2014 - 201616

Rating Area Duval Gadsden Hillsborough Miami-Dade Orange

2014 $314 $351 $304 $379 $332

2015 $368 $427 $337 $444 $382

2016 $366 $445 $352 $443 $398

Below is a brief summary of the characteristics of each rating area.17

DUVAL COUNTY (JACKSONVILLE) Duval County is located in the northeast corner of the state. The population is 913,010 (2015) and median household income is $47,582 (2014).18 The unemployment rate is 5.4 percent (2015).19 The largest city in the county is Jacksonville, which is home to several health insurers' headquarters and, most notably, it is the headquarters of Florida Blue. It is the home of the Mayo Clinic of Jacksonville, which employs nearly 500 physicians and operates a hospital with 304 beds. It is also home of Baptist Health, which operates a network of five hospitals and is affiliated with 45 primary care offices in Northeast Florida and Southeast Georgia.

Over the period 2014-2016, between four and five carriers participated in the Duval County market. The average premium in 2016 for a 40-year-old purchasing a silver plan was $313 compared with $322 in 2015 and $301 in 2014. The Blues plans have the largest presence on the exchange. Florida Blue and Florida Blue HMO offered 53 and 24 plans, respectively, in 2014; 18 and 8, respectively, in 2015; and 18 each in 2016. There were no PPOs offered on the exchange in 2015 or 2016 by any carrier. Molina Healthcare has entered the Duval County market for the 2017 plan year.

GADSDEN COUNTY (QUINCY) Gadsden County is located in the north central portion of the panhandle of Florida. The population is 46,036 (2015) and median household income is $36,146 (2014).20 The unemployment rate is 6.7 percent (2015).21 There are two hospitals in Gadsden County. The Gadsden County hospital was closed from 2005-2010 and then reopened as the Gadsden Memorial Campus of Capital Regional Medical Center. It operates an emergency room, lab services, and radiology and has four beds. The second is the Florida State Hospital, a state psychiatric hospital and mental institution in Chattahoochee. It has 949 beds.

Gadsden County is the only predominantly African-American county in Florida. Medicaid-eligible individuals in this county have the lowest number of standard plan options in Florida's statewide Medicaid managed care program (two compared with 11 in Miami-Dade).22 In October 2016, 12,479 residents (nearly 25 percent of the population) were enrolled in Medicaid.23

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