Two weeks before a new round of signups begins for health insurance coverage under the Affordable Care Act, federal officials have dampened projections about how many people will enter the marketplace this year, but say they are making a concentrated push to get uninsured Texans in particular to enroll.
Sylvia Mathews Burwell, the Obama administration’s health care chief, said Thursday she expects nationwide health insurance enrollment to grow modestly in 2016 — by fewer than 1 million people, well below the 9 million figure predicted earlier by the Congressional Budget Office.
But Burwell said her administration will take aim especially at Texas and a handful of other states, trying to reduce by 25 percent the number of uninsured people who are eligible for tax subsidies. That sets the stage for Texas to play a leading role in the national health policy debate in 2016, at a time when significant changes are coming to the state’s health insurance market. One big-name insurer is canceling a popular health plan next year after taking unsustainable financial losses, while a smaller health insurance start-up is setting up shop in Texas for the first time.
“We still have work to do to bring access to affordable, quality health insurance to all Americans,” Burwell said.
About one million Texans are eligible for subsidized health insurance coverage under the federal health law but have not signed up, according to the Kaiser Family Foundation. Next year, the federal penalty for not having health insurance rises considerably, to either $695 per adult or 2.5 percent of household income, whichever is greater. Federal officials say the perception that health insurance is unaffordable remains one of the biggest barriers to getting people to sign up. About half of the uninsured have fewer than $100 in savings, Burwell said.
The monthly costs, or premiums, of insurance plans that will be offered on the exchange in Texas are not yet publicly available. But several insurers — including Scott and White Health Plan, Humana and Blue Cross Blue Shield of Texas — this year asked the federal government for permission to raise the monthly price of some of their health plans by 20 to 30 percent.
Blue Cross Blue Shield says it lost about $400 million on the exchange in 2014, one of the heavier financial blows taken by health insurers that year, and the company is expecting losses in 2015 as well. The insurer recently announced it would cancel its Preferred Provider Organization (PPO) health plan on the exchange — affecting roughly 370,000 Texans.
“We lost $400 million in 2014, and when you take those kinds of losses within a product line like the PPO, it’s just not a sustainable market offering,” Dan McCoy, the company’s chief medical officer, said in a July interview. “Our goal is to make sure that we create a sustainable product that offers value and access to affordable health care for as many Texans as possible.”
The insurer’s losses were exacerbated because a federal relief program meant to limit health insurers’ financial risk on the exchange is more than $2 billion short, leaving the companies to collect only 12.6 percent of requests.
There will also be at least one new player in the Texas health plan market, Oscar Health Insurance, which is entering the Dallas-Forth Worth and San Antonio regions. Company spokesman Dave Beauboeuf said the insurance plan will offer non-traditional benefits like unlimited free telemedicine — remote doctor consultations by phone or computer — and cash benefits for members who demonstrate good health behaviors with a wearable, electronic fitness tracker. He did not provide details about how much the insurance plan will cost.
Texas remains the state with the greatest raw number and percentage of people without health insurance. Texans living below the federal poverty line are not eligible for tax credits to buy health insurance. Texas’ Republican leadership opposes expanding Medicaid coverage to that group of people, a key tenet of the Affordable Care Act.
The large numbers of uninsured have made Texas an obvious target — albeit a politically hostile one — for the Obama administration to find enrollees to hit its goal of one million people newly covered on the exchange. Burwell said about half of the nation’s uninsured people are “young invincibles,” or healthy people between 18 and 34 years old, and more than one-third are people of color. The Obama administration has said it will sharpen its focus on encouraging signups in Dallas and Houston.
But Texas’ large potential for new enrollees has prompted groups to work outside those metropolitan areas as well.
“I know that [Burwell] put emphasis on Houston and Dallas, and absolutely we will be continuing our efforts in those areas,” said Rachel Shumaker, a Texas spokeswoman for Enroll America, which encourages people to sign up for subsidized coverage. “But you know, Texas is a large place, and there are counties, rural counties, that still have a really high number of uninsured people.”
Disclosure: Blue Cross Blue Shield is a corporate sponsor of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.