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ObamaCare Discuss Plan to simplify 2015 health renewals may backfire at the General Forum; Plan to simplify 2015 health renewals may backfire email print By RICARDO ALONSO-ZALDIVAR Associated Press Posted Jul. 27, 2014 @ ...

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Old 07-30-2014, 01:43 AM
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Default Plan to simplify 2015 health renewals may backfire

Plan to simplify 2015 health renewals may backfire

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By RICARDO ALONSO-ZALDIVAR
Associated Press
Posted Jul. 27, 2014 @ 4:24 pm

WASHINGTON | If you have health insurance on your job, you probably don’t give much thought to each year’s renewal. But make the same assumption in one of the new health law plans, and it could lead to costly surprises.

Insurance exchange customers who opt for convenience by automatically renewing their coverage for 2015 are likely to receive dated and inaccurate financial aid amounts from the government, say industry officials, advocates and other experts.

If those amounts are too low, consumers could get sticker shock over their new premiums. Too high, and they’ll owe the tax man later.

Automatic renewal was supposed to make the next open-enrollment under President Barack Obama’s health care overhaul smooth for consumers.

But unless the administration changes its 2015 approach, “they’re setting people up for large and avoidable premium increases,” said researcher Caroline Pearson, who follows the health law for the market analysis firm Avalere Health.

It could be a new twist on an old public relations headache for the White House: You keep the health plan you like but get billed way more.

“It was our preference for (the administration) to have the capacity to update people’s subsidy information, but they haven’t been able to get that built,” said Brendan Buck, a spokesman for the industry trade group America’s Health Insurance Plans.

Here’s the issue, in a nutshell:

To streamline next year’s open enrollment season, the Health and Human Services Department recently proposed offering automatic renewal to 8 million consumers who are already signed up.

But the fine print of the HHS announcement said consumers who auto enroll will get the “the exact dollar amount” of financial aid they are receiving this year.

That’s likely to be a problem for a couple of reasons, not to mention inflation.

First, financial aid is partly based on premiums for a current benchmark plan in the community where the consumer lives. Because more plans are joining the market and insurers are submitting entirely new bids for 2015, the benchmark in many communities will be different.

Second, financial aid is also based on household income. If your income goes down, you are entitled to a bigger health insurance tax credit. If it goes up, you get less. The 2014 amounts could well be out of date and incorrect for many people. Financial assistance is also affected by age, family size and where people live.

And that doesn’t get into another motivation for consumers to shop around: Premiums and choices for 2015 are changing, so your current plan may no longer be a good deal.

“Just continuing in the same plan with the same credit is not going to be the optimal outcome for most people,” said Judy Solomon of the Center on Budget and Policy Priorities, which advocates for low-income people. “Your 2014 credit is going to be lower in most cases, and in some cases it could be too high.”

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Plan to simplify 2015 health renewals may backfire - News - The Leader - Corning, NY
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