The Obama administration said Thursday most Obamacare federal exchange customers will be able to easily re-enroll in their current plans at the end of this year, offering a convenience that they hope will help head off the kinds of disruptions that plagued the overhaul’s initial rollout late last year.
Officials said many other Americans — for example federal employees — auto-enroll in their plans year after year, so it makes sense to bring that convenience to Obamacare’s exchange plans.
“As we plan for open enrollment in year two and continue to build a sustainable long-term system, we are committed to simplifying the experience for consumers by allowing auto-enrollment,” said Health and Human Services Secretary Sylvia Mathews Burwell. “We are working to streamline the process for consumers wishing to remain in their current plan.”
Auto-enrollment is designed to save time and money by not requiring the 5 million-plus enrollees on the federal marketplace to reselect their plans.
Timothy Jost, a health policy expert at Washington and Lee University School of Law, said auto-enrollment notices mailed or emailed to Obamacare enrollees will be quite clear, in “bold print,” about how much the person will have to pay in the new year.
“It tells people that, and hopefully people will read,” he said.
Indeed, a new study suggests people should scrutinize their options instead of blindly re-upping their plans.
Avalere Health, a Washington-based consultancy, studied fluctuations in the cost of the second-lowest cost silver plan in given regions — the benchmark by which federal premium assistance is measured. In six of nine states studied by Avalere, market upheaval will cause the 2014 benchmark silver plan to lose its status in 2015.
“In the vast majority of states, these plans are getting more expensive,” said Caroline Pearson, a vice president at Avalere.
That triggers a ripple effect in which a person’s subsidy doesn’t help them out as much as it used to. Avalere used the example of “Sue from Maryland,” who makes $17,500 per year and pays $58 per month for her benchmark silver plan, after a subsidy is applied.
When her plan loses its benchmark status because of rising costs, her personal monthly cost will rise to $94 per month.
According to HHS guidance, the government will automatically recalculate tax credits so long as an enrollee authorized agencies to obtain updated tax information.
The small number of people whose new reported incomes indicate they would no longer qualify for financial assistance will be auto-enrolled into their plans, but without a tax credit. State-based exchanges can adopt this model or take a different path.
Mr. Jost said people are likely to shift around within the marketplace in search of a better deal. In theory, that will force insurers to compete for business.
“On the whole, I think this will be beneficial for consumers,” he said.