Dixon, a self-employed app developer, was looking to buy insurance for his young family as an individual purchaser on the marketplace created by the Affordable Care Act. But he wouldn’t qualify for any government subsidies that could bring down his premiums.

His sticker shock spurred ­Dixon to join with other ­health-policy novices to spend the next year delving into the nuances of insurance law and sparring with state regulators and insurance companies.

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Now, ahead of open enrollment for 2019, Charlottesville’s rates are coming back down.

The turnaround in Charlottesville is a being touted as a dramatic example of the resilience of the ACA after a period of upheaval and uncertainty following a change in administrations and of the impact of Virginia’s decision to expand Medicaid to cover more people.

But it is also a story of citizen activism by average people who became exceptional advocates.

In exchanges as recently as last week between the state and what had been the lone insurer covering customers like Dixon, discussions about whether this year’s premiums could drop even more cited issues spotlighted by the Charlottesville consumers.

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Ahead of 2018, all insurance carriers on the marketplace had pulled out of offering individual plans in Charlottesville, much as insurers had in many other parts of the country. After major cajoling by the state, Optima Health agreed to offer individual plans in and around the university town.

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It had no competitors, but that also meant it was the lone insurer for healthy and unhealthy customers shopping for an individual plan and was exposed to shouldering all of the risks in that pool of customers.

When Optima priced its monthly premiums, they were the most expensive plans in the country.

Dixon, 39, was facing a $3,000-a-month premium for a family of four: he, his wife and two toddlers.

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He managed to avoid that steep hike when he figured out that if he hired an employee he would qualify for small-group coverage that would cost him less for his family, even considering the salary expense for the new hire.

But Dixon said, despite his own workaround, he felt driven to battle for about 700 other individuals in Albemarle, Greene and Fluvanna counties who like him were counting on buying their individual health coverage on the ACA marketplace but wouldn’t qualify for subsidies.

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“It was the sense of injustice about it,” recalled Dixon, who had left a job to start his business and was bolstered at the time, he said, by the knowledge that he could turn to the government health exchanges for affordable health care.

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“People were screwed and didn’t have a choice to compromise on their coverage,” he said. “I felt a big wave of responsibility.”

The more he pressed to understand what was behind the pricing, he said, the more convinced he became that the customers challenging the increases as extreme and unsupported “were right.”

A year later, and after weathering a raft of news accounts about the surge in Optima’s rates, Dennis Matheis, the company’s president, said that he is sympathetic to the frustrations of people who faced the higher prices. But he also said he felt the company is not being credited for coming back into the Charlottesville area and others, and saving affordable care for the 91 percent of people in the individual market who qualify for government subsidies.

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“If we had not stepped in, they would not have had an insurance option available to them. We know there are challenges, but we’ve done a lot of good for a lot of people across the state of Virginia,” Matheis said.

Banding together

In the weeks after open enrollment for 2018, Dixon teamed with Karl Quist, a father and founder of an online price comparison business, and Sara Stovall, a mother and client relations manager, and the trio began asking questions and digging into complex insurance data and regulations. The accidental activists were strangers when they started. Since November, they’ve talked or texted daily.

“They’re not just people complaining or people who have come up with some human-interest stories,” said Timothy Jost, an emeritus professor at Washington and Lee University School of Law, who has advised the group. “They seem to understand insurance regulation and what the federal regulations are. Frankly, I think they understand the regulations better than Optima and possibly better than the state regulators.”

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The trio studied what went into setting premiums and began challenging Optima and state regulators about how the insurance premiums had been set.

Optima’s Matheis said then and now that the costs charged by the area’s dominant University of Virginia Health System drove up the cost of insurance.

Dixon’s group met with the U-Va. system’s executive vice president of health affairs, Rick Shannon, and contended that they learned claims paid out to the system amount to only a slice of what the insurer recouped in premiums. Shannon’s office recently confirmed Dixon’s account of the meeting.

The band of consumers also challenged why coverage for small groups — the workaround that Dixon had arrived at — was cheaper in Charlottesville than in the plan sold on the individual market.

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The reason, Matheis said, is that Optima had a small-group plan in the area before the ACA came in, so it made a business decision to give people who wanted that existing plan a better deal. Since then, the federal government has informed them it can no longer include a market adjustment only for the small-group rating that doesn’t also apply to the individual one.

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On a third important point, there is a disagreement between Dixon and Quist and Optima.

In a meeting with Matheis at the end of last year, Dixon and Quist both say Matheis told them the company had considered Charlottesville’s high morbidity rate — meaning high rates of disease — when setting prices. Matheis says he was referencing the morbidity rate of the whole state.

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ACA law says if there are pricing variations among regions of a state where an insurer sells its health plans, the prices must track to differences in what the care providers in that market charge and not the overall health profile of a community.

The consumers have also analyzed Optima’s year-to-date profits and say the figures prove the company priced rates too high.

Matheis acknowledged that the company is doing well but said that, come the second half of a year, insurers often pay out more once consumers have met their deductibles and the insurer takes over paying medical claims. Matheis also pointed to a protection written into the ACA that if there is a determination an insurer charged too much, it will be required to reimburse consumers.

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“If we end up much better than we anticipated, we’ll be writing rebate checks and we’ll be doing it gladly,” Matheis said.

As Dixon, Quist and Stovall pushed back against Optima and state insurance regulators, they also lobbied in Richmond for legislation to allow solo entrepreneurs like them to purchase health insurance on the small-group market. A bill to do so passed unanimously and was signed by Gov. Ralph Northam (D) in April.

What looms ahead

Going into 2019, rates will be lower in Charlottesville for individual plans like the one the trio had sought.

Anthem, another insurance provider, announced it would reenter the Virginia market and offer significantly less-expensive rates than its Optima competitor.

“After a thoughtful review of the stability in the marketplace in Virginia, Anthem has revised its Individual health plan offerings for 2019 to include additional cities and counties,” the company’s spokesman, Scott Golden, said in an email.

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Optima has lowered its rates by about 16 percent in the Charlottesville region and will begin offering an even cheaper option that eliminates U-Va. hospitals and doctors from their in-network providers. A week after Anthem’s reentry, Optima submitted a new filing to the state to reduce its rates further.

The state bureau of insurance recommended on Aug. 29 that Optima’s request be denied because it was made only after Anthem “came forward on August 10 with a more competitive bid” and outside the state deadlines for rate changes.

Underscoring the influence of Dixon’s group, the bureau’s response also noted that it had meetings with Optima in which state officials had brought up Charlottesville residents’ concerns and suggested ways the insurer could have dropped rates further. At the time, Optima did not take the advice.

And in correspondence with the state, Optima said it was bringing down rates in part by adjusting its profit-and-risk margin.

A spokeswoman for Optima said the company had been looking for ways to lower rates before Anthem came in.

The price drops are showing up in more than Charlottesville as insurers come out of a year of anxiety about the fate of the ACA.

“I think the good news is our market is rebounding back toward a more competitive atmosphere,” said Doug Gray, executive director of the Virginia Association of Health Plans. “In the last year, there was a lot of uncertainty because no one knew if the ACA was going to get repealed or not,” Gray said. That was a serious question.”

Insurers also were on uncertain footing and adjusting as the Trump administration made last-minute decisions that affected their bottom lines, such as the elimination of some cost-sharing between the federal government and insurance companies that previously had helped compensate for a set of discounts the ACA required insurers to offer to certain consumers.

“I think at least one factor is [prices] were so dramatic for 2018, many insurers are seeing that they overshot the mark and therefore they can’t justify huge premium increases for 2019,” said Jost, the emeritus professor who advised the trio of Charlottesville consumers. “It’s a very dynamic situation. I think the insurers are on a wild ride here and they’re just hanging on, but it does look like the market is stabilizing a bit.”

Medicaid also is set to expand in Virginia at the start of 2019, which will move the health-care costs of more people to a government program and out of the private-risk pool.

Even though rates are coming down, Dixon and the others are not letting up on their contention that Optima set last year’s rates too high. They continue to push state regulators about why they agreed to those rates and are seeking to recoup money from the insurer for residents who they assert overpaid.

“I’m convinced of the things we’ve alleged; I’m convinced we’re right on the facts,” Dixon said. “Our concern is that this could so easily happen next year. Anthem could easily leave again next summer. We could find ourselves back in this situation, and that’s why we want accountability.”

Dixon will continue to purchase a small-group plan for his family from Anthem, but next year will be able to do that, thanks to the change from Richmond, without the extra cost of paying an employee.

He said he’ll pay about $400 less a month than he would have buying individual insurance from Optima.