If you signed up for a health insurance plan from the health insurance exchange website in 2014 and received financial assistance via federal subsidies, then you may have to re-examine your coverage during open enrollment despite the government’s assurance in June that plans would be renewed automatically for 2015.
According to the Congressional Budget Office, approximately 13 million Americans will enroll in a health insurance plan through the health insurance exchange sites by the end of the three-month open enrollment period that begins on Nov. 15 this year. Referred to as federal and state marketplaces, the health insurance exchange sites already service more than eight million people according to a statement made by President Obama in April.
The current administration has said since June that people enrolled in marketplace plans would not have to worry about signing up again for coverage. Those with insurance plans purchased through the exchange sites would enjoy the benefit of automatic enrollment into a similar plan for 2015. Now, the government admits that some people will have to sign up manually if they hope to enjoy the same level of coverage and take advantage of federal subsidies.
A “Passive” Renewal Process
This month, insurers will begin sending renewal notices containing boilerplate messages from the government about enrolling in a new health insurance plan through the marketplace. Many of the letters simply tell consumers not to worry and that they will not “have to do anything” to maintain their existing healthcare plan. However, consumer advocate groups point out that this language is misleading.
In fact, many consumers will have to take a more active role in renewing their coverage because the government can’t guarantee that marketplace enrollees will gain access to the same level of financial assistance that they enjoyed in 2014. Monthly premiums may also rise for millions of enrollees. The renewal notices do mention a change in 2015 premium rates.
The Centers for Medicare & Medicaid Services claimed in June that around 95 percent of marketplace enrollees would not have to renew their policies manually. This agency is responsible for running the federal health insurance exchange. In an updated stance issued last week, one of the agency’s top executives noted that the CMS would encourage marketplace beneficiaries to re-evaluate their policies manually to make sure that their coverage still reflected their needs.
Consumer advocates aren’t the only ones who object to the administration’s vague and misleading language in the renewal notices. Insurers across the country insist that inaccurate data gives the wrong impression to their consumers. For example, many people who use subsidies to pay their premiums might see a significant reduction in the amount of financial assistance they receive. This single fact alone could negatively impact the insurance industry on a large scale.
Is there a reason that the renewal notices contain such vague information? In part, the renewal notices suffer from a lack of up-to-date numbers. The government can’t actually calculate the amount of subsidies available for enrollees in 2015 because the data they have access to is outdated by two years at most. Consumers need to re-evaluate their own plans manually as a result of this outdated information. Family size and income changes periodically, and with outdated information the government can’t provide clear estimates on applicable tax credits.
Other Issues with the System
Manual review also creates more work for the average consumer, and several concerned organizations insist that customers will now have to work harder to find their preferred insurance plans. Each health plan includes a 14-digit number that enrollees can enter into the HealthCare.gov “plan finder” to keep their existing plan. Enrollees can also search for a specific plan using the catalog that the government calls Plan Compare. These methods might sound straightforward enough, but big insurers argue that consumers will find the system complex and overwhelming.
Other issues stem from the government’s lack of organization in terms of record-keeping and data storage. For instance, some people may receive letters notifying them of automatic renewal when those people have had their insurance suspended for non-payment. As of the time of this writing, federal authorities are attempting to resolve record-keeping discrepancies but have fallen behind.
Additionally, some low-income families without access to regular computer use may find it difficult to report changes in their status to the government because the administration plans to eliminate mail as an option for submitting updated information. Consumer advocate groups argue that phone lines will be heavily congested during open enrollment and that eliminating mailed-in submissions will cause undue hardship for many families.
The Benefit of Manual Review
While manual renewals pose a variety of issues for consumers, there are some good arguments in favor of manual renewals. The Affordable Care Act required all eligible Americans to purchase some type of insurance, and for many families the extra expense wasn’t immediately welcome. After nearly a year of healthcare coverage, some families will be better prepared to evaluate their healthcare needs.
Manual policy renewal forces people to re-examine their policy to determine if they need the same level of coverage that they had in 2014. Families that grow or decrease in size may need to adjust their coverage while families with higher incomes in 2014 will need to re-apply for subsidies.
Because families will have adjusted their budgets to include health insurance, more people can now afford to shop around for health insurance on and off the health insurance exchange sites. Like all aspects of a good budget, manual review helps people gain a clearer understanding of their needs and how they can adjust to meet everyday challenges.
Notices will be mailed during the fall, and many marketplace enrollees will receive one notice from the health insurance exchange site from which they purchased their insurance plan and another directly from their insurer. Concerned beneficiaries should contact their insurance company, Centers for Medicare & Medicaid Studies or the HealthCare.gov Customer Service line for more information on policy renewal.