California regulators recently released year-end 2015 health insurance enrollment figures. The new numbers show that in 2015 individual enrollment grew, though not as dramatically as in 2014. Group enrollment remained essentially flat, reversing the previous year’s trend, and Medi-Cal managed care enrollment expanded. In addition, a larger share of enrollment was regulated by the California Department of Managed Health Care (DMHC). Overall, enrollment shifts in the second year of the Affordable Care Act (ACA) rollout were more subdued than in the previous year.
More People Covered by Individual Insurance in 2015
The individual market expanded by 8%, or 164,000, to 2.3 million enrollees. The change was substantial but less dramatic than the growth (47%) experienced in the ACA’s inaugural year. The 2015 expansion coincided with continued outreach by Covered California and with the enforcement of penalties for being without insurance, which was the greater of $325 per adult (up to $975 per family) or 2% of income. Slightly more than half of Californians with individual insurance purchased it through Covered California, the only channel for obtaining premium subsidies.
Small- and Large-Group Enrollment Was Nearly Unchanged in 2015
Overall, the group markets shrank 0.5%, or 60,000, ending the year at 11.8 million enrollees. This contrasted with a decrease of 5% a year earlier. Small-group enrollment shrank 1.1%, or 23,000, to end the year at 2.1 million members. The small-group market was more stable than in 2014, when enrollment fell 11%. Large-group enrollment shrank 0.4%, or 37,000, to finish the year at 9.7 million members. The large-group market was also more stable than 2014, when membership declined by 3%.
Medi-Cal Managed Care Growth Slows
Medi-Cal managed care enrollment grew 7% to 10.3 million, a slower pace than its historic burst of expansion in 2014. Regulator reporting does not encompass fee-for-service Medi-Cal enrollment, so this is only a partial look at Medi-Cal activity.
Medicare Managed Care, ASO, and Other Markets
Medicare managed care plan membership grew 3% to 2.3 million enrollees. Enrollment in administrative services only (ASO) arrangements, in which self-insured employers hire health plans to manage workplace health benefits, grew 4% to 6.9 million. Self-insured coverage is regulated by the federal government, but the provision of administrative services to these employers is reportable to state agencies.
Distribution of Commercial Business Between Two State Regulators
Overall, the California Department of Insurance (CDI) lost 20% of its commercial enrollment, as businesses shifted to DMHC-regulated products. CDI’s small-group enrollment declined by 49% in 2015, driven by activity from the Blues. At year-end 2015, Blue Shield had no small-group business under CDI regulation, representing a loss of nearly a quarter-million enrollees. Similarly, Anthem had fewer than 200 small-group enrollees, mostly from grandfathered plans. Overall, at year-end 2015, 95% of commercial and public insurance enrollment was regulated by DMHC. This included 88% of small-group business, up from 67% in 2013, and 86% of individual business, up from 30% in 2013.
Katherine Wilson is an independent consultant specializing in health insurance markets and health care costs. She is the author of numerous publications and reports, including CHCF’s series of reports on California health insurers.