HHS Secretary Sylvia Mathews Burwell. / Alex Wong, Getty Images
About 95% of those who bought health insurance on the federal exchange will be able to re-enroll automatically for 2015, the Obama administration said Thursday, but a new study suggests the move is unwise unless consumers shop around fist.
The Department of Health and Human Services' new rules will make Healthcare.gov plans more like private sector and federal employee insurance plans, which most people re-enroll in every year. State-based marketplaces may take this approach as well, or propose an alternative.
But insurance plans on the new state and federal exchanges are trickier in one respect than employers' plans because they come with federal subsidies that can lower premiums. This premium assistance is linked to the second-lowest-cost silver plan - the so-called benchmark plan - in an area. Those who receive subsidies and select a more expensive plan must pay the difference between the benchmark plan premium and their choice.
In a report out Thursday, the healthcare research firm Avalere said six of nine states it analyzed will have a new benchmark plan. And in seven of the nine states, a different plan will become the lowest-cost silver plan.
Auto-enrollment "makes sense for continuity, but just because it can be done does not mean it will be in their best interest," says Avalere CEO Dan Mendelson. "This is a buyer-beware situation."
Federal regulators are encouraging consumers to use the open-enrollment period to update their information and make sure their health coverage needs remain the same next year.
And then there's cost.
"Most enrollees in 2014 chose a plan based on the monthly premium, (but) the lowest-cost plans in 2014 may no longer be low cost in 2015," said Elizabeth Carpenter, director at Avalere Health. "Before consumers renew their 2014 plan, they should consider the trade-off between continuity of care and lower monthly premiums."
Those who opted out of automatically getting their tax credit next year will be ineligible for auto-enrollment, as will those making more than 500% of the federal poverty limit, HHS says.
Under the HHS rules, consumers in the 36 states that use Healthcare.gov will receive notices telling them how to update their information to get a tailored and updated tax credit that keeps up with any income changes. Insurers will provide information about the premium and the amount they are eligible to save on their monthly bill close to the beginning of the open-enrollment period.
Read the original story: Most can auto-enroll for insurance, but should they?