Surge in New Enrollees on Exchange Means Lower Assessment, Probable Rebate

The number of consumers buying individual health plans on healthcare.gov for this year surged to 147,000 people, up from 112,000 in 2015, paving way for the state to lower its monthly surcharge from $9.66 to $6 and setting up a possible rebate to insurers for the surplus revenue.

The Department of Consumer & Business Services plans to reduce the assessment on individual health insurance plans for insurers who participate on the exchange from $9.66 to $6 per member per month for the 2017 plan year.

The decrease will coincide with an expected 1.5 percent new surcharge wagered by the federal government next year for use of the federal enrollment and eligibility website -- healthcare.gov, which will increase to 3 percent in 2018.

The federal government levies its assessment as a percentage of the premium cost, meaning insurers are charged more for more expensive plans, while the state sets a fixed cost. But on average, the agency director Pat Allen said the $9.66 works out to about 3 percent.

The $6 monthly surcharge would then work out to about 1.86 percent, meaning health plans on average will be assessed a total of about 3.36 percent for participation in the exchange in 2017 and 4.86 percent in 2018.

The assessments are levied on all individual health plans if an insurer participates in the Oregon Health Insurance Marketplace, regardless if the plans are sold on healthcare.gov or directly to the consumer. However, plans from Regence BlueCross BlueShield and Health Net Health Plan, which do not participate on the exchange, are not assessed.

Allen said the state’s share of the assessment can be reduced because the marketplace spent less than what was budgeted in 2015 while generating more in revenues than was expected.

“We had a phenomenal open enrollment,” said Berri Leslie, the administrator of the Oregon Health Insurance Marketplace.

The number of consumers who purchased insurance through healthcare.gov rose 31 percent from 2015 to 2016, which Leslie said was the highest in the country. There were 147,000 plans sold in Oregon through healthcare.gov for 2016, up from 112,000 in 2015.

The increased revenues also mean that the marketplace could soon exceed the six-month reserve set by the Legislature, and is on track to have enough money to cover 14 months of expenses by June 2017. If it trips that six-month mark, it could force a rebate back to insurers, but Leslie said the agency will seek a rule change to allow it to delay any rebates to the end of the biennium, aligning it with the rest of the agency’s budget timeframes and giving the marketplace more time to consider its actual costs for the current state budget cycle before returning any surplus to the insurers.

Reducing the assessment will help the state maintain the viability of retaining some of the marketplace responsibilities such as plan design while delegating the most visible consumer functions -- eligibility and enrollment -- to the federal website.

Allen announced the proposed assessment change at the first meeting of the state Health Insurance Marketplace Advisory Committee, which will be chaired by Kaiser Permanente executive Dan Field and vice-chaired by Jesse O’Brien, policy director at the Oregon State Public Interest Research Group.

Although the committee will have only an advisory function, its members were appointed by Gov. Kate Brown and approved by the Oregon Senate during the 2016 legislative session.

Meanwhile, four vendors have bid on a contract to assess the viability of transferring the enrollment process to an existing, non-federal online platform, such as a website in use by another state, such as Washington, Idaho or California. The four vendors are hCentive, Vimo, Inc., Softheon, Inc., and New Fields Technologies.

Allen has said that the analysis they will perform will allow state policymakers to be better informed about whether sticking with the federal website is the best idea. The lowered state assessments for medical and dental plans will make the federal assessment more palatable than if the state continues to assess health plans at essentially the same rate as the feds.