Earlier this month, CMS rolled out final regulations that will result in the federal exchange automatically renewing health plans for 2015 if consumers do not take action by Dec. 15.
Consumers will be re-enrolled in the same plans, if available, or a similar plan if their existing plan is no longer offered through the exchange. They'll also receive the same subsidy to help pay for coverage as they did in 2014, as long as their incomes have not significantly changed and they have authorized IRS to view their tax return.
Sounds convenient, but some stakeholders have expressed concerns. If premiums for the plans have increased, consumers will be responsible for paying the difference, instead of receiving a larger subsidy. If premiums have dropped, consumers could receive subsidies that are too high and would have to repay IRS.
There also are concerns that the federal exchange and insurers might end up having different enrollment and payment records for some consumers, which could cause additional confusion. The federal government is expected to test the auto-enrollment system in October, but that doesn't necessarily mean it will work seamlessly. It also doesn't give federal officials much time for fixes, should there be any hiccups.
The bottom line? Consumers might face higher premiums and higher costs if they don't shop around for coverage, but the ease of re-enrollment might cause individuals to take the easy way out and just stick with their old plan rather than look at the federal exchange for a better deal.
At the same time, having auto-enrollment is a way to make sure people don't face gaps in coverage, and it will probably result in an overall increase in individuals with health insurance. Further, knowing auto-enrollment is an option might incentivize some people to sign up for coverage who wouldn't have otherwise if they had to deal with shopping around every year.
Does the ACA Auto-Renewal Process Need To Be Refined?
Participants in a Senate Finance Subcommittee on Health Care hearing on Tuesday discussed whether to reauthorize CHIP, given new coverage options under the Affordable Care Act.
During the meeting, groups advocating for continued CHIP coverage expressed concern over a potential glitch in the ACA that prevents families from using federal subsidies to offset premium costs if a parent is eligible for "affordable" employer-sponsored coverage. Under the ACA, health plans are not considered to be affordable if they exceed 9.5% of household income, but the standard applies only to costs for individual plans and does not consider the cost of family plans. In addition, advocates said that families could face higher out-of-pocket costs under plans purchased through the ACA's insurance exchanges, which tend to offer fewer coverage options for children.
However, the Medicaid and CHIP Payment and Access Commission said CHIP should only be extended for two years, which it said would be enough time to resolve the coverage glitch.
Meanwhile, Douglas Holtz-Eakin, former head of the Congressional Budget Office, said CHIP "now resides in an insurance landscape that is very different than the one it was created in." He added, "Subsidized insurance is now available to many families currently enrolled in CHIP, and redundancies in coverage should be considered when making funding decisions."
Federal funding for the program is set to expire in September 2015. Sen. Jay Rockefeller (D-W.Va.) and Rep. Henry Waxman (D-Calif.) have both introduced bills to extend federal funding for the program through 2019.
Do We Still Need CHIP?