Open enrollment is the specific time of the year that individuals and families can buy or change their private health insurance coverage without a qualifying life event such as the birth of a child.
When is Open Enrollment?
The next open enrollment period set by the federal government will begin on November 15, 2014 and end on February 15, 2015.
When do health insurance companies need to submit rates and forms for approval?
Health insurance carriers will need to submit their health plans for review by June 27, 2014. Health carriers in Minnesota will have an additional month compared to last year to analyze last open enrollment data to help design health insurance products as well as comply with dates provided by the federal government. The Departments of Commerce and Health will review the plans filed to ensure they meet all benefit and other standards in Minnesota and federal law. The new plans and rates will be publicly available when open enrollment begins.
When can individuals and families enroll in a new health plan?
Except for special enrollment periods (or SEPs) that are triggered by qualifying life events, new plans that will be effective on and after January 1, 2015 will become available during the open enrollment period that begins on November 15, 2014 and ends on February 15, 2015.
Consumers will need to sign up by the 15th of the month for coverage starting the first of the next month. For example, if you would like your new plan to start on January 1, you will need to sign up by December 15. This enrollment period applies for all individual health plans.
During open enrollment, companies cannot turn anyone down for coverage if they have a pre-existing condition. Once open enrollment ends, it will be harder to get coverage. Except for special enrollment periods that are triggered by qualifying life events, health insurance carriers are not required to accept people applying for individual policies year-round. Individuals cannot wait until they get sick to buy coverage because they might not be able to find it when that happens.
When are special enrollment periods?
There are some opportunities to buy coverage outside of the open enrollment period, these are called “special enrollment periods” (or SEPs). SEPs occur after a “qualifying life event,” which include getting married or divorced, having a new baby, losing coverage through a job, or moving to a new state. If one of these events happens, individuals and families will have a certain amount of time afterward to buy new coverage or change health plans (usually 30 days).
Minnesotans who are eligible for public programs such as MinnesotaCare or Medical Assistance, who own a small business with 50 or fewer employees, or who are enrolled members of a federally-recognized Indian tribe can enroll year-round for health coverage through MNsure.
Are there additional consumer protections in 2015?
Health plans that start or renew in 2015 will include several strengthened consumer protections, including:
Health insurance companies are required to provide a wide variety of metal level options. Insurance companies will need to make available plans at many different cost levels.
Health plans will need to include networks with providers that are accessible to Minnesotans in a timely manner.
Marketing and benefit designs need to be inclusive of all consumers and not be discriminatory or written to discourage someone who needs health care from enrolling.
These rules will now apply to all health plans offered to individuals and families or small groups, whether the plan is purchased through MNsure or not.
How does Minnesota health insurance rate review process work?
Minnesota has been designated by the federal government as a state with an effective rate review program. This means that all proposed rate increases are scrutinized by expert actuaries in the public interest to make sure the rates requested are justified.
This analysis helps to moderate premium hikes, which results in lower costs for individuals, families, and businesses that buy insurance.
An effective rate review system operating to review rates for 2014 and later must do the following:
Receive sufficient data and documentation concerning rate increases to conduct an examination of reasonableness of the proposed increases.
Consider the factors below as they apply to the rates:
Medical cost trend changes by major service categories
Changes in utilization of services (i.e. hospital care, pharmaceuticals, doctors’ office visits) by major service categories
Cost-sharing changes by major service categories
Changes in benefits
Changes in enrollee risk profile
Impact of over- or under-estimate of medical trend in previous years on the current rate
Administrative costs related to programs that improve health care quality
Other administrative costs related to programs that improve health care quality
Other administrative costs
Applicable taxes and licensing or regulatory fees
Medical loss ratio
The impacts of geographic factors and variations
The impact of changes within a single risk pool to all products or plans within the risk pool; and
The impact of reinsurance and risk adjustment payments and charges under sections 1341 and 1343 of the Affordable Care Act.
Make a determination of reasonableness of the rate increase under a standard set forth in State statute or regulation.
Post any rate filings that increase rates 10% or more on their websites or post a link to the preliminary justifications that appear on the CMS website: http://mn.gov/commerce/insurance/topics/medical/Access-Filing/access-filings-overview.jsp
Provide a mechanism for receiving public comments on proposed rate increases.
Report results of rate review to CMS for rate increases subject to review.
Health insurance rates are reviewed by the experts in the actuarial unit at the Minnesota Department of Commerce. The Commerce Department also reviews the rates submitted by Health Maintenance Organizations (HMOs) under an interagency agreement with the Department of Health.
Rates that stay the same from year-to-year are not generally subject to review if the health insurance plan has not changed. Any rates that have increased or are new must be approved by the Department of Commerce or Department of Health.
Individual and small group health insurance rates are determined for a particular plan of benefits from a particular network of doctors and hospitals based on the combined medical costs of everyone in that company’s market for a particular age, tobacco use, and geographic area. This is called community rating– the rates are based on the costs of the entire community.
The rising cost of medical care impacts rates. With community rating, your premium may go up even if you haven’t received any medical services, if the average cost of services has increased.
Health plan companies develop rates using estimates of future claim costs, administrative expenses, and how much reserves they need to hold.
Claim costs: The amount a company expects to pay for health care services and goods, such as physician services, hospital fees, and prescription drugs, on behalf of all policyholders with similar policies.
Administrative expenses: The cost of running a health plan. These costs can include:
salaries of employees;
costs to maintain computer systems to pay claims;
costs to manage the provider network (signing up doctors, setting payment rates, etc.);
commissions for agents and brokers (called “producers”);
taxes, fees, and assessments that health plans pay to the State or federal government; and
other costs to administer the policy (for example, fraud detection and prevention activities).
Contribution to reserves: Money that insurance company has left after paying for claims and administrative expenses. The reserves are needed to pay for claims and administrative expenses in years when the plans do not collect enough premiums to cover those costs.
All health plan rate filings must meet these criteria:
Lifetime and anticipated loss ratio meets the state's minimum of 71% to 82%;
Rates are sufficient to cover expected claims and expenses;
Rates provide a reasonable value to the insured; and
The filing is complete, correct, and understandable
In order to demonstrate that the above criteria are met, the filing must include at least the following information:
Historical information, such as when issued, any changes in benefits, rates, or profitability;
Historical experience including premiums, claims, enrollment, and durational/seasonal patterns since inception of policy forms;
Statistical reliability of historical experience;
Assumptions used in projecting the future loss ratio– anticipated changes in claim cost per person and enrollment. The reasons for a rate increase, such as benefit changes, population changes, tax and fee changes.
Approved- If the filing is clear and justifies the filed rates, the filing is approved and the health plan company is notified that the rates may be used.
Objection- If the information in the filing is not clear or does not justify the filed rates or rate increase, the Department of Commerce sends an objection letter to the filing company.
This objection must be sent within 60 days of when the Commerce Department receives the filing. If no objections are sent within 60 days the rates are “deemed” approved, which means the company can go ahead and use them.
The filing company then has 30 days to provide a complete filing, or the filing may be closed without approval.
If the filing company fails to justify the filing within the 30 days or any longer period approved by Minnesota Department of Commerce, the filing is permanently closed.
After the filing is closed, the company can make another rate filing.
Many health plan changes will occur because of health care reform. New plans will be available and companies must accept everyone for coverage regardless of their health or any pre-existing diagnoses. Because of these changes, insurance is likely to cost more for some people and less for others. To make coverage affordable, many people who buy coverage on their own in the individual market will be eligible for financial help to buy a plan. People younger than 30 years old who cannot afford coverage can buy a catastrophic plan, which covers less and costs less.
The Affordable Care Act (ACA) helps individuals in the following ways:
You may get better coverage and pay less out of pocket in deductibles and copays.
You will no longer be denied coverage by insurance companies if you have a health condition.
Health care costs have been on the rise for more than a decade – well before the Affordable Care Act and MNsure, the Minnesota Health Exchange Program. According to Jonathan Gruber, an MIT health economist, due to the federal tax credits available on the Minnesota Exchange, MNsure, more than half of the enrollees in the individual market will have access to premiums that will be the same as or lower than their 2013 premiums.
With these tax credits, many MNsure consumers may see their premiums drop more than 30 percent.
Small businesses may also see lower premiums, as much as 7.5%, due to increased competition between insurance companies through MNsure.
If you buy your own health insurance or have coverage through your employer, your premium may change each year because you have:
Reached a higher age;
Added a new family member to the policy or dropped coverage for a family member;
Moved to a different location; or
In addition, if you have coverage through your employer, your premium may change due to:
Changes in the average age or family size of the group as a whole; or
Your employer is paying more or less of the total premium.
If your rate increased, and you buy your own health insurance, check with your insurance carrier to find out the exact cause. If you have coverage through your employer, your human resources benefits office may be able to provide this information.
Your premium will not go up solely because you have claims, just as it will not go down solely because you do not have claims. Insurance is a pooling of risks, so individuals pay a share of the pooled experience in exchange for not assuming the full risk of their own medical costs. If you have an individual or small employer policy, your premium is based on the claims of everyone with your type of policy. If you have coverage under a large employer health plan, your premium is based in part on the claims of everyone in the group.