Auto-Renewing ObamaCare Policies May Cost the Most-Needy $1000s

By doing nothing & auto-renewing out-of-pocket contributions will rise 62 Texas Insider Report: WASHINGTON D.C.  For the 8 million people who persevered through all the software trap-doors in the ObamaCare Health Exchanges and signed up for coverage earlier this year their policies are likely to automatically renew come November when open enrollment begins. What could be so wrong about re-upping with the same ObamaCare Health Plan? Turns out plenty.   But consumers who automatically re-up with the plan they already have could face steep and unexpected premiums and out-of-pocket costs particularly if they received a federal subsidy. Yes after all the headaches consumers endured last year during or after the programs launch one analysis of proposed plans and rates in nine states by Avalere Health a health care research & consulting firm. says renewing the same policy may cost far more in premiums ... unless they proactively take steps to comparison shop. This is due to the fact that their current policies may not be the best fit their individual circumstances.

(Automatic re-enrollment) could conceivably mean people will pay more in premiums unless they proactively take steps to comparison shop" said Jenna Stento a senior manager at Avalere Health.

If you made a good choice last year what could be so wrong about re-upping with the same plan? Turns out plenty particularly for those among the 87 of enrollees in health insurance exchange plans who received a federal subsidy to help pay for premiums. And understanding why thats a problem the result of complicated quirks in the Affordable Care Act which established the exchanges in the first place isnt easy. The Obama Administration announced last month that consumers who bought their policies on the federal exchange would have them automatically renewed as well as the amount of their subsidies.  It will be up to each state exchange whether to offer a similar automatic renewal. People whose level of income has changed would need to enroll again since it would affect the amount of their subsidies.

Premiums Up 8

Overall premiums on the exchanges in 2015 may be a bit higher for most people according to Avaleres analysis of proposed plans and rates in nine states. Avalere found that the average premiums for Silver plans will climb an average of 8. (There are four grades of plans offered starting with Bronze plans with the cheapest premiums but higher deductibles and co-pays and moving up to Silver Gold and Platinum.) Heres why.

Changing Benchmarks

The subsidy people receive is pegged to the second-lowest priced Silver plan the so-called benchmark plan" meaning that the amount of a subsidy any individual receives no matter which plan he or she selects is based on how much they would receive if they picked that benchmark plan. In a hypothetical example Avalere provides:

1. Sue is a Maryland resident who enrolled in the 2014 Benchmark Silver plan in her region offered by CareFirst Blue Cross -- which had a monthly premium of $214.
2. Based on her income Sues contribution toward her monthly premium was set at $58 so she qualified for a monthly federal subsidy of $156 to make up the difference.
3. If Sue had chosen a plan with a higher premium her federal subsidy would have remained fixed at $156 and she would have had to pay more out of her own pocket.
4. In 2015 however according to Avaleres analysis CareFirst Blue Cross will no longer be the 2nd lowest Silver plan in Sues region but the 9th lowest out of 18 Silver plans
5. This means Sues Plan will lose its status as the benchmark plan.
6. CareFirsts new monthly premium is $267.
7. The new benchmark Silver plan (the Silver plan with the 2nd lowest premium) will be the Kaiser Foundation Health Plan with a monthly premium of $231.

Sues contribution remains the same but she will now qualify for a higher federal subsidy of $173 to make up the difference between her ability to pay $58 per month and the higher $231 monthly premium of the new benchmark.

If or when she automatically re-enrolls with CareFirst she will have to cough up another $36 a month. By doing nothing her out-of-pocket contribution will rise by 62.

Or here is another example:

1. Dave" enrolled in the benchmark Silver plan called Health Cooperative in the state of Washington which had a monthly premium of $281.
2. He received a federal subsidy of $85 each month leaving him with a monthly out-of-pocket bill of $196.
3. In 2015 BridgeSpan Health will replace Group Health as the benchmark plan in Daves area with a premium of $263 a month.
4. Because of that lower premium Dave will be entitled to only a $67 a month federal subsidy leaving him again with a $196 monthly out-of-pocket expense if he switched to BridgeSpan.
5. But if Dave sticks with Group Health which hiked its premiums to $313 he will have to pay $246 each month out of his own pocket.
6. That is nearly a $600 increase when compared to last year.

And says Avalere these are not a theoretical wrinkles. Of the nine states whose 2015 premiums Avalere examined (Connecticut Indiana Maryland Maine Oregon Rhode Island Vermont Virginia and Washington) all but Vermont appear headed for a new benchmark plan when open enrollment commences. Consumers who live in six of these states may have an unpleasant surprise when they see their bills if they let their policies automatically renew. There could be significant financial value to take a look at the site and see if there might be more affordable options for you given the changes since last year" Steno said.

Website Tools

As re-enrollment approaches numerous health care advocacy organizations including Easter Seals the March of Dimes the Livestrong Foundation the National Alliance on Mental Illness and many others have urged the U.S. Department of Health and Human Services which operates the federal health exchange and the states that run their own exchanges to develop tools on their websites that will help consumers identify the plans that best fit their particular circumstances. That is also why health advocates want all the exchanges to offer calculating tools that would enable customers to plug-in information on their actual health care usage from the previous year to get an idea of how much they would be likely to spend in each plan in the year ahead. Our goal is that every state website will have the information to help you understand your real out-of-pocket costs" said Marc Boutin president of the National Health Council which offered its own calculating tool for customers during the last enrollment. But with all the computer mishaps in the first enrollment year neither the 36 federal nor 15 state exchanges had such a tool in the first year. Colorado tried in the first year but consumers found the tool confusing and the exchange disabled it. It is not currently clear which if any other states will have such a tool in place either. Exchanges websites also did poorly in providing two other categories of information of great interest to consumers:

1. Offering up-to-date lists of the medical providers who were in each network plan or
2. Telling consumers which medications each health plan covered.

Such key pieces of information could make a difference of thousands of dollars. And due to last years disastrous roll-out most exchanges will have modest ambitions for the second enrollment period. While offering consumers a smooth enrollment experience has been the goal of most exchanges a smooth experience wont necessarily be enough to guarantee landing the best policy.