Worried that insurers bailing out of the health law’s markets may prompt their customers to drop out, too, the Obama administration plans to steer affected policyholders to remaining insurance companies. But those consumers could get an unwelcome surprise if their new government-recommended plan isn’t what they’re used to.
The backstop was outlined in an administration document circulating among insurers and state regulators. It also calls for reaching those “discontinued consumers” with a constant stream of reminders as the health law’s 2017 sign-up season goes into full swing. Open enrollment for HealthCare.gov starts Nov. 1 and ends Jan. 31. A copy of the strategy was provided to The Associated Press.
The health insurance markets were envisioned as dynamic engines to facilitate private competition, but in many states they have run into problems that could lead to a greater government role.
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Some consumer advocates say the administration’s latest effort will help people hold on to coverage in a challenging year that will also see sharper premium increases. Insurers worry that government picking plans will sow confusion and may trigger a backlash from customers disappointed with reduced options. The administration says consumers have the last word as far as accepting any “alternate” plan they’re offered.
“Many consumers are likely to be wary of information from another insurance company,” said Elizabeth Carpenter of the consulting firm Avalere Health. “Some individuals choose a plan based on a name they recognize or reputation. Other patients may also understand that things like benefit design and networks are likely to change, in some cases significantly, from one carrier to another.”
The Obama administration said it isn’t able to provide an estimate of the number of people who’ll get the notices, but independent experts say it could range from several hundred thousand to 1 million or more.
The market churn is due to a combination of big-name insurers leaving because of financial losses and the collapse of nonprofit insurance co-ops. Insurers say customers have turned out to be sicker than expected. Many younger, healthier people have stayed away, even at the risk of fines for being uninsured.
Created by President Barack Obama’s health care law, insurance markets like HealthCare.gov provide subsidized private coverage for people who don’t have a job-based plan. About 11 million people are currently covered.
The original idea was for the markets to force insurers to offer quality coverage at affordable prices. But many communities, particularly rural areas and small cities, will have just one carrier next year. Democratic presidential candidate Hillary Clinton is calling for a stronger government role through the introduction of a public insurance plan.
With the markets struggling, administration officials worry that insurer exits could complicate their desire to deliver strong sign-up numbers in the president’s last year. So they are leaving nothing to chance.
The document, titled “Marketplace Consumer Communications: Discontinued Plans,” says affected consumers may get 20 or more reminder messages between Nov. 21 and Dec. 15, which is the deadline for selecting coverage effective Jan. 1.
The earliest notices will start this month. Around the second week of November, consumers whose insurers are leaving the market will get a notice that HealthCare.gov has matched them to another plan. They could also receive materials from the new insurer, including a welcome kit and a bill.
Christen Linke Young, a senior administration official overseeing the health care markets, stressed that consumers are under no obligation to accept the new plan.
“Under no circumstances is anyone going to be enrolled in a plan or need to pay anything without their consent,” she said. “Consumers are getting an option, but they are not getting enrolled into that product without their consent.”
Last year, most renewing customers checked their options before paying their first month’s premium. But this year, they may not have other viable choices if they live in an area reduced to one insurer.
Displaced customers who fail to sign up by the end of open enrollment will get another chance to do so in 2017, what’s termed a “special enrollment period” because their insurance company left the market.
The new policy will be effective in most states, which use HealthCare.gov for sign-ups. In some cases, state regulators may have different rules.
Supporters of the health care law say the administration is taking a reasonable step, since losing customers would only further weaken the markets.
“If you want as many people as possible to remain covered, what they are doing is a good idea,” said Judy Solomon of the Center on Budget and Policy Priorities, which advocates for low-income people. “They are doing the best they can with a difficult situation on this one.”