Obamacare’s Auto-Renewal Mess

It could create a backlash:

Unless people provide updated information and have their eligibility re-determined, most who received subsidies for marketplace coverage in 2014 will automatically receive the same dollar level of subsidies in 2015.  (These subsidies consist of advance payments of premium tax credits, which are paid to insurers on enrollees’ behalf to help cover the enrollees’ premiums.) But since many factors that affect the level of people’s subsidies change from year to year, a high percentage of people who auto-renew will receive advance premium credits that turn out to be too low or too high.  To avert such problems, consumers need to return to the [Federally Facilitated Marketplace] (rather than auto-renewing) to receive an updated eligibility determination.  That is the only way to ensure they receive the correct level of benefits.

Adrianna McIntyre is concerned:

According to Gallup, only seven percent of newly-insured exchange enrollees plan to shop around. An overwhelming 68% plan to keep their current plan; the remaining 25 percent expect to find coverage elsewhere, drop coverage, or aren’t sure. Call me a skeptic, but I’m hard-pressed to believe two-thirds of exchange enrollees fully understand the volatile nature of subsidies and want to keep their current plans anyway.

Hence, the administration considering changing enrollees’ plans for them:

Under current rules, consumers who do not take action during the open enrollment window are re-enrolled in the same plan they were in the previous year, even if that plan experienced significant premium increases. We are considering alternative options for re-enrollment, under which consumers who take no action might be defaulted into a lower cost plan rather than their current plan.

Suderman opposes this move:

It’s not just auto-reenrollment. It’s auto-reassignment, at least for those who pick that option. Basically, if you like your plan, but don’t go out of your way to intentionally re-enroll, the kind and wise folks at HHS or state health exchanges might just pick a new plan—perhaps with different doctors, clinics, cost structures, and benefit options—for you. And if you want to switch back? Good luck once open enrollment is closed. There’s always next year.