The Obama administration proposed new rules Thursday to let most Americans with health plans in the federal health insurance marketplace be enrolled automatically in a second year of coverage, but the approach prompted swift questions about how it would work and who would benefit.
Under the method proposed Thursday by federal health officials, the government will renew people in their current health plans as long as their incomes and covered family members are not changing — and as long as the plan will be offered through the federal marketplace for 2015.
Through this arrangement, the government will give people eligible for federal help in paying for their insurance the same subsidy they have now, as long as they gave permission for their tax records to be checked automatically when they first applied to join the insurance exchange.
Federal health officials portrayed this method, with rules that would need to be finalized, as a way to allow more than nine in 10 Americans who signed up for coverage that began this year under the Affordable Care Act to keep their coverage without needing to return to HealthCare.gov, the Web site for the marketplace.
“We are committed to simplifying the experience for consumers by allowing auto-enrollment,” Sylvia Mathews Burwell, the new secretary of health and human services, said in a statement. “We are working to streamline the process for consumers wishing to remain in their current plan.”
These rules have been anxiously awaited by consumer advocates and others concerned about whether the policies and the computer systems underlying the federal health insurance marketplace would make it easy or cumbersome for people to continue their new coverage.
For their part, administration officials have been eager to give consumers an easy path to continue in the exchange for the second year. They hope to lessen memories of the beginnings of HealthCare.gov — a launch in October so problem-ridden that many people were thwarted as they tried to sign up, compelling President Obama to apologize.
By early spring, when the first sign-up period ended, 5.4 million people had chosen health plans through the federal exchange and nearly 3 million more through 14 separate state-run marketplaces — more than anticipated. But uncertainty has lingered over how well people like their new health plans, how many are continuing to pay the monthly premiums, and what will happen in the fall once the second enrollment season opens Nov. 15.
But the rules proposed Thursday will not allow everyone to enroll automatically, and in fact may mask messy subtleties that could end up requiring many people to return to HealthCare.gov, after all, according to several health policy specialists.
The wrinkles stem, in part, from a main difference between the new federal insurance marketplace and routines elsewhere in the health-insurance industry. While renewing coverage each year is a common experience, the federal exchange has an added layer of complexity because the 2010 health-care law that created it also provided for the first time for Americans well into the middle class to receive federal tax credits to help them afford private insurance policies.
According to federal figures, 87 percent of the people in the federal insurance marketplace are receiving subsidies. On average, the tax credits are $264 per month, lowering monthly premiums from $346 to $82. The amount of help families get depends on their income.
Under the proposed rules, the government will renew people’s insurance with their subsidy intact only for consumers who gave permission for the insurance exchange to check their tax records to make sure their reported income is accurate. Federal officials said that about 100,000 applicants during the first sign-up period did not provide such permission, so their coverage would be renewed for the coming year without any subsidy. They will receive federal notices that they need to reapply if they want their subsidy to continue.
In general, federal health officials said, continuing people’s current subsidies makes sense because customers in the insurance exchange must report through HealthCare.gov any changes in their incomes within a month of the change — so the subsidies should be up to date.
But Robert Laszewski, a consultant who has been critical of the law and has clients across the health-care industry, said that most people with this new insurance do not understand that they need to report income changes to the government. So, in practice, he said: “Virtually everyone is going to have to go back to HealthCare.gov. This is auto-
enrollment in spin only.”
Ron Pollack, executive director of the consumer-health lobby Families USA, said the administration’s plan could promote stability, diminishing “churn” — people moving in and out of various health plans, which is common in public insurance programs such as Medicaid.
It is not yet clear how many of the health plans on the federal marketplaces this year will be offered for 2015, or how popular the remaining ones will be, because insurers around the country are in the midst of deciding which plans to offer and at what price. Under the proposed rules, if a plan disappears, consumers would automatically be assigned to the most similar other one offered by the same insurer. If the insurer dropped out entirely from the area in which someone lives, the consumer would be enrolled in the most similar plan available from a different insurer.
Pollack noted a possible drawback for consumers to letting HealthCare.gov renew them automatically: The government plans to send notices about this auto-enroll option in late summer or early fall, before the full set of insurance choices is available in many parts of the country. “They may not have information about other plans that could be selected,” he said — a particular concern because early evidence suggests that new health plans coming into certain states’ marketplaces may be less expensive than ones already available.
In a related enrollment decision, federal health officials recently told insurance-industry representatives said that one intended enrollment avenue that was unavailable last year, called “direct enrollment,” would not be offered during the second enrollment period because the computer capacity will not be ready. In direct enrollment, customers can go to insurance agents and brokers to figure out their subsidies through the exchange and sign up for coverage.