New entrants for Washington’s exchange and a proposed budget for 2015

McKinsey recently looked at health insurance carrier participation, plan offerings, and premium changes in the health exchanges of 12 states, including Washington.

In Washington, there are four new carriers participating in 2015. For the lowest-price silver plans, the maximum premium decrease from 2014 is estimated to be 16 percent, while the maximum premium increase is estimated to be less than 1 percent. For people who purchased the lowest-price silver plan and are eligible for the federal subsidy, 59 percent will have a premium decrease.

According to Kaiser Health News,

Four new insurers have applied to sell individual policies in the state’s exchange next year, making Washington among the states with the highest number of new exchange entrants of the 12 states where preliminary 2015 rates have been filed, according to McKinsey. . . .

Hutchins Coe said McKinsey hasn’t drawn conclusions about what brought new carrier interest to the state. But Washington Healthplanfinder officials said the interest shows their exchange is working.

“The first year went fairly well for us,” said Michael Marchand, a spokesman for the Washington Health Benefit Exchange. Marchand says 2014‘s enrollment of 164,062 private plan holders was “smooth,” and that the exchange’s marketing has been successful. . . .

One of the new exchange applicants, Illinois-based Health Alliance, says it’s applying to participate in Washington Healthplanfinder not for the private plan customers, but because it wants to expand its Medicaid managed care business. Washington requires Medicaid plans to also sell plans on the exchange.

“State budgets around Medicaid are growing and are creating financial difficulties for a lot of states,” says Jeff Ingrum, CEO of Health Alliance, based in Urbana-Champaign, IL. . . .

“We see [Medicaid] as a potential for growth because states are looking to manage care to help them keep the costs under control,“ Ingrum says.

The chart below shows Medical Assistance (the largest program funded by Medicaid) spending in Washington in terms of all funds (including federal) and near general fund-state plus opportunity pathways (NGFS+).

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Meanwhile, last week the Washington Health Benefit Exchange presented a budget proposal for 2015. It proposes spending $53 million; as the Seattle Times points out, “That amount is more than the $40 million that has been allocated by the state Legislature, but far less than the $127 million the insurance exchange expects to spend this year.”

Where the money will come from — whatever the amount –  is unclear. The exchange is supposed to be self-sustaining by Jan. 1 of next year. . . . The $40 million is expected to come primarily from a 2 percent tax levied on insurance premiums. Beginning this year, proceeds from that tax as assessed on plans sold through the Washington Healthplanfinder will go toward operating the exchange. If the tax doesn’t raise sufficient funds, the exchange can also assess a fee on insurers selling plans through the exchange beginning next year to make up the difference.

Many board members expressed concern that $53 million wasn’t going to be enough to make sure the exchange would run well and have enough outreach to meet enrollment goals. . . .

Washington’s exchange officials are asking for an extension of federal grants meant to help with the next enrollment period so they’ll cover that new window. That could provide $26 million in federal dollars for next year, but there are strict limits as to where they can spend that money. . . .

According to the Puget Sound Business Journal,

One sticking point on the early draft of the exchange budget was that no money had been set aside for marketing and outreach. The new budget introduced Thursday did budget $4 million for communications, including a $1 million marketing contract with GMMB and $1.2 million for the navigators, who are charged with helping people enroll in the system.

But if the exchange has to stick to that marketing budget, the state would have to forgo any advertising through TV, radio and print in 2015. Some have expressed concern that a drop-off in advertising and other marketing efforts could limit the state’s efforts to capture as many insured people as possible.

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