Enrollment on the Affordable Care Act health exchange opens Tuesday with a new lower-cost player in the local market.
AmBetter, from Superior Healthplan in Austin, will offer half of the 26 plans available to Tarrant County residents. The other 13 plans on the exchange this year will be offered by Blue Cross Blue Shield of Texas. Consumers must use the exchange to sign up for insurance in order to qualify for federal premium subsidies based on income.
AmBetter is providing some premium relief for area consumers following a substantial rate increase by Blue Cross Blue Shield for 2017.
In Tarrant County, AmBetter is offering the cheaper premium in bronze, silver and gold coverage categories with a full-price (unsubsidized) premium of $290 a month for its cheapest bronze plan compared with Blue Cross’s $336. But the real savings is at the silver level, with AmBetter’s cheapest plan carrying a monthly premium of $307 versus $429 for Blue Cross.
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“I just quoted one family a $400-a-month savings moving from Blue Cross to Ambetter,” said Audra Sullivan, president of Vogue Insurance in Arlington.
Both insurers are offering only Health Maintenance Organization (HMO) plans or Exclusive Provider Organization (EPO) plans on the exchange. No Preferred Provider Organization (PPO) plans are available on the exchange this coming year.
I think this speaks to our commitment to provide affordable health care and our ability to innovate our business model to adapt to the changing landscape of healthcare.
Jared Wolfe, plan president for Ambetter
An EPO is a hybrid of HMOs and PPOs, said Dale Mason with Mason Insurance in Fort Worth. An EPO has lower premiums and no referral needed to see a specialist, but with a narrow provider network similar to an HMO, he said.
“What it comes down to is access,” he said. “It’s a huge problem in the individual market with people having access to doctors they have relationships with and facilities that have the level of care they want.”
For example, both insurers do not have the Texas Health Resources hospitals, which include Harris Methodist and Arlington Memorial, in their networks. Blue Cross said it is currently in negotiations with THR for a 2017 contract, but its website shows that the health system is not included in upcoming exchange plans at this time.
Last year, the exchange offered 63 plans through six insurers in Tarrant County. But four of the insurers — Aetna, Scott & White, Cigna, UnitedHealth — pulled out of exchanges throughout Texas. The other insurer last year, Oscar, will still be on the ACA exchange in San Antonio, but said it has pulled out of DFW for now.
Ambetter has been selling policies on the ACA exchange in targeted sections of Texas since it opened in 2014, and is adding 12 counties for 2017 including Tarrant, Denton, Dallas and Rockwall, said Jared Wolfe, plan president of the traditional and hybrid programs for the insurer.
“Ambetter already has a significant presence in Texas — including Austin, San Antonio and El Paso among other regions,” Wolfe said. “Couple that with the strong relationships we have with the provider community here and expanding to Fort Worth was a natural choice.”
The insurer’s price increases on the exchange have been moderate, with reductions in some areas, Wolfe said.
“I think this speaks to our commitment to provide affordable health care and our ability to innovate our business model to adapt to the changing landscape of healthcare,” he said.
Blue Cross is also changing its business model, raising its rates and dropping its PPO to make its plans on the exchange more sustainable, said Dr. Paul Hain, market president of Blue Cross Blue Shield of Texas
“Our population was sicker than we thought they would be,” he said. “We were spending $1.29 on healthcare for every $1 of premiums we collected.”
The rate increases, which average 58 percent according to documents filed with the federal government, should put premiums at a level that will cover costs, Hain said.
“When we entered the exchange in the first year, we had zero information going in on the population,” he said. “Now after three years, we have a reasonable amount of information to better price our products. We think we have a good shot at market stabilization going forward.”
The rate increases will not affect most consumers pocketbooks since federal subsidies will cover most of the extra cost, said Stacey Pogue, senior policy analyst for the Center for Public Policy Priorities in Austin. Around 84 percent of Texans on the exchange receive a premium subsidy, which is based on income.
Blue Cross has been the only insurer to commit to all 254 counties in Texas since the exchange opened. This year, it will be the only insurer in more than 80 counties, Hain said.
Census data released last month shows the ACA marketplace helped reduce the number of uninsured in Texas from 5.7 million in 2013 (22 percent of the population) to 4.6 million in 2015 (17.1 percent). The state still has the largest number of uninsured in the country, however.
This week, a report showed the number of uninsured Texas children declined by 23 percent from 2013 to 2015, partly because of the ACA which enhanced Medicaid and CHIP coverage for children.
The number of Texas children without health insurance declined from 12.6 percent to 9.5 percent, a drop of 206,000, according to the report by the Georgetown University Center for Children and Families and the Children’s Health Coverage Coalition.
IRS penalties for not being insured reached their highest level this year. The penalty for being uninsured is 2.5 percent of total household adjusted gross income, or $695 per adult and $347.50 per child, whichever is greater. Fior example, that would make the maximum penalty $2,085 for a family of four. The flat fee will be adjusted for inflation starting in 2017.
Teresa McUsic’s column appears Saturdays. TMcUsic@SavvyConsumer.net