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But Will They Renew?

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You know that it’s not enough to sell coverage to clients. You have to make sure they renew that coverage year after year.

It’s the same thing with the Affordable Care Act (ACA). It wasn’t enough to help people to obtain health insurance during open enrollment season. The next challenge is to keep last year’s enrollees from dropping out of coverage.

Health Affairs looked at this issue as the Dec. 31 deadline for renewing existing coverage is almost here. The author of the Health Policy Brief found a number of pieces to the puzzle surrounding whether enrollees will keep or change their current coverage.
In the initial open enrollment period, the main challenges focused on making people aware of the requirement to obtain coverage, educating the public on how and where to obtain coverage, and helping people navigate the marketplace. During this current enrollment season, efforts are focusing on signing up hard-to-reach segments of the population as well as to keep current enrollees in the system.

In order to maximize policy renewals and continuity of coverage, the Department of Health and Human Services (HHS) issued regulations that allow the federally facilitated marketplace to reenroll people automatically in their current plans unless they take action to change or terminate their coverage, Health Affairs reports. State exchanges are allowed to do the same or adopt an alternative process to renew enrollees. A handful of states are following the federal lead, but others are making changes to the federal renewal process or choosing not to implement automatic renewal.

Why is keeping enrollees in coverage such an issue this time around? A certain segment of the population will always “churn,” or move in and out of coverage, as their family or financial situation changes. In fact, Colorado officials estimated that their state will lose 30 percent of its 2014 enrollment by the end of the year through attrition.

Also at issue, Health Affairs reports, is that states want to keep the maximum number of people enrolled in their exchanges not only to reduce the number of uninsured in their state but to help finance the operating expenses of their exchanges. Beginning in 2015, state exchanges must be self-financing. The state-based exchanges collectively received hundreds of millions of dollars in planning and establishment grants, which helped support them leading up to and through 2014.

HHS is re-enrolling eligible people in their existing plan, assuming it is available, unless the consumers take action. HHS estimates that about 95 percent of people who are enrolled through HealthCare​.gov will be eligible for automatic renewal. Most insurers favor automatic re-enrollment because it helps maintain existing enrollment, and reduces and avoids some of the technical problems associated with the initial enrollment.

In addition, automatic re-enrollment will help reduce some of the pressure on HealthCare​.gov because it will prevent the millions of people who already enrolled in coverage last time from flooding the exchanges during this abbreviated open enrollment period. But it also may discourage consumers from shopping for coverage that better fits their needs and budget.

It may be easier for consumers to keep their existing coverage, but failing to shop around for a better deal could end up costing them. Health Affairs reports that premiums for 2015 vary widely by market and issuer. In some markets, issuers are submitting rates 30 percent higher than their 2014 rates, while in other markets issuers are showing little change or decreasing their 2015 rates. In many markets, these premium changes mean that the benchmark plan in 2015 will be different from 2014.

Health Affairs warns consumers that they may be double billed if they do change plans. If consumers change plans during open enrollment, they must tell their old plans that they are disenrolling. Otherwise, their old plan may continue to bill them.

HHS is rethinking the automatic re-enrollment process for future open enrollment periods, Health Affairs reports. One possibility under consideration would allow consumers to opt in to an automatic reenrollment hierarchy at the time they initially enroll in coverage.

For example, enrollees may be reenrolled in their current plan if their premiums did not increase by more than 5 percent but would be reenrolled in another low-cost plan if premiums did increase above that threshold. This process is still in the exploratory stage, and HHS is requesting comments on how best to implement a policy that respects the value consumers place on price. HHS notes that this change in reenrollment would not apply until the 2016 open enrollment period for plan year 2017.

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Susan Rupe is assistant editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Connect with Susan →

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