(Bloomberg) — Patient Protection and Affordable Care Act (PPACA) exchange customers who choose to re-enroll in insurance plans would automatically default to cheaper coverage during sign-up periods, protecting them from price increases, under rules proposed by the U.S. government.
The rules, which wouldn’t apply until the 2016 benefit year, were released yesterday by the Centers for Medicare & Medicaid Services (CMS). The changes, which also include requirements for insurers on the transparency of their rate increases, are open to public comment.
Changing the way open enrollment works may help the Obama administration address one of the quirks of PPACA, which also known as Obamacare. On Dec. 15, consumers who are already insured through the PPACA public exchange system will automatically be enrolled again in their current plan, even if their insurer has raised prices on premiums.
That means customers who aren’t aware they should be shopping around will be getting higher bills in January than they expect, though they can still change to lower-priced plans through Feb. 15. There were about 6.7 million people covered through PPACA exchange insurance plans through Oct. 15, and the administration has been urging them to check whether their premiums are rising.
“Because premiums may change significantly from one year to the next, the plans that are most competitively priced in one year may not continue to be the most competitively priced in subsequent years,” the agency, which oversees the federal health insurance exchange programs run by the U.S. Department of Health and Human Services (HHS), said in its proposal. “Because we believe that many consumers place a high value on low premiums when selecting a plan, we believe that consumers could benefit from alternative re-enrollment hierarchies.”
10 percent increases
The most popular plans in the marketplace in 2014 are increasing their premiums by 10 percent on average in 2015, according to Avalere Health, a Washington consulting firm. In 2014, 28 percent of exchange users chose the lowest-cost silver- level plan, the firm said. Consumers who shop around during the enrollment period will probably find a cheaper plan, Avalere said.
While open enrollment for public exchange coverage began last weekend without the technical problems that plagued the federal government’s HealthCare.gov site last year, PPACA’s supporters have faced several setbacks. Sylvia Mathews Burwell, the HHS secretary, said this week that her agency made a mistake when it added dental-plan customers to recent figures on PPACA exchange enrollment, drawing criticism from Republicans such as Representative Darrell Issa of California.
Earlier this month, Burwell lowered the bar for the administration’s goals, saying the number of people insured by PPACA exchange exchange plans would increase to about 9.1 million next year.
–With assistance from Alex Wayne and Anna Edney in Washington.