By Tricia Brooks, Georgetown University Center for Children and Families
In recent guidance, CMS revealed its plan for the first round of financial eligibility redeterminations and marketplace plan renewals for the millions of people who enrolled in a qualified health plan (QHP) through Healthcare.Gov. A companion notice of proposed rulemaking would provide both the federal and state-based marketplaces additional flexibility as their systems evolve and mature. The proposed rule would allow HHS to specify alternative procedures for a given plan year for the federal marketplace. State-based marketplaces may adopt the federal procedures or seek HHS approval of alternative procedures.
The good news is that the rules and guidance provide an opportunity for consumers to be automatically reenrolled in the same or a similar plan without taking action. But without contacting the marketplace for the 2015 plan year, enrollees will receive the exact same amount of premium tax credits (PTC) and same level of cost-sharing reductions (CSR) that they received in 2014. This automatic re-enrollment process will not take into consideration changes in the premium cost of the 2015 silver benchmark plan, updated age rating, or the current federal poverty level (FPL) thresholds, all factors that are necessary to determine the right level of financial assistance.
Is this a concern? Not so much if the enrollee’s household size and income remains steady…and not if their plan remains largely unchanged in terms of cost and benefits. However, even a very small change in income or the FPL could qualify a family for a plan than that pays 94% of costs versus one that pays 87% of costs. Such a difference is huge for a low-income family.
To ensure the most accurate assessment of PTCs and the right level of CSRs, all enrollees should be prompted to contact the marketplace at renewal. However, draft standards for plan renewal notices missed the mark by putting the emphasis on the fact that enrollees need to take “no action” to remain enrolled rather than encouraging them to return marketplace to update their eligibility. There is still time for CMS to issue additional guidance that will better coordinate the content and timing of marketplace and QHP renewal notices to ensure that consumers understand the process and what steps they should be taking.
One more thing. The guidance establishes a hierarchy for issuers to renew coverage in a substitute plan or product if the enrollee’s current plan is no longer available. While guaranteeing enrollment in the same or a very similar plan is a good thing, there are two circumstances where the consumer’s needs should trump this hierarchy. Individuals or families who qualify for cost-sharing reductions should only be reenrolled in a silver plan so they can take advantage of lower out of pocket costs. Additionally, an individual or family should never be enrolled in a plan outside the marketplace if they qualify for premium tax credits. In all cases, issuer notices should very clearly list all changes in premiums, benefits, cost-sharing, drug-formularies and provider networks so that enrollees understand how the plan in which they are being reenrolled differs from their current plan.
In the coming year, CMS should work toward additional system functionality to support a more robust automatic annual redetermination process. The agency should also assess the feasibility of taking on responsibility for plan reassignment rather than leaving it in the hands of issuers. In the meantime, enrollee education, clear notices, and training for call center representatives, navigators and certified application counselors will be key to a successful first round of QHP renewals and for maintaining our country’s coverage gains.