Obamacare’s Auto-Renewal Mess, Ctd

A reader sighs:

What is wrong with this administration when it comes to their healthcare overhaul? They cannot be this dumb:

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.

So the administration that spent an unconscionable amount of time fighting claims that the ACA was a government take-over of healthcare are considering allowing HHS to take over certain people’s choices for their health insurance. There are no words for how stupid of an idea that is and whoever thought of it should be forced to watch Fox News for a week non-stop until they get the picture.

Another is far more optimistic:

The autorenewal mess … isn’t going to be a mess.  Do you think the people who signed up last year are stupid? They are on the ball, and they are used to shopping. Thirty years of deregulation has taught all of us to check around when a CD comes due, when auto insurance renews, and during open enrollment at  work, and most importantly, when your mobile phone is out of contract.

If you can do your taxes, you can handle this.

And if you can’t, there are people (insurance brokers) who will do it for you – just like there are accountants who will do your taxes for you.  I work in the health insurance industry, for one of the Blue Cross/Blue Shield affiliates, and we are already seeing signs that insurance brokers are all over this. Not all of them, but the smart ones certainly are.  They will be reaching out to their clients, I guarantee it.  There is an incentive; a new policy pays a higher commission than a renewal. So there is a significant financial incentive for the broker to put their customer in a new plan every year.

The reason Obamacare is so rickety and so complicated is that it uses the existing system.  Rather than providing single pay, it depends on a patchwork of state-level insurers; there is no federal market for insurance.   Even the biggest companies have to file their plans at a state level, which is fiendishly complicated because what is OK with one insurance commissioner can be sent back for amendment by the state next door.  If you are a red state living next to a blue state, well … it can be frustrating.

But the genius in the plan is that it greases all the right palms.  The providers are guaranteed payment after decades of writing off uninsured medical – there is now in effect a stop-loss of the amount of the insured’s out of pocket, so rather than eat $50,000 in costs for a hospitalization, the provider will eat the first $12,000 worst case, with the insurance company covering all above that. The insurance companies are given a captive market, and the brokers make money too.  It’s a win all around for private enterprise.

I will be very interested to see what happens if the Supreme Court rules against the federal exchange.  I am guessing the pressure will be on Congress to amend the statute or cede the powerful health care industrial complex to the Democrats for all eternity.

Certainly there will be a few people who fall through the cracks and will be paraded around on Fox News.  Those people deserve the same amount of sympathy as somebody who claims they thought they could just file their taxes once and then the government would take care of it for them – after all, their taxes are coming out of their paychecks.