By Sandy Ahn and Sabrina Corlette
Open enrollment this year will bring a variety of changes for the federally facilitated marketplaces (FFMs). Officials will be implementing new renewal policies and improving ways to communicate with and display plans to consumers. The administration has made these policy changes for 2017 in an effort to ensure not just a better shopping experience, but also to minimize disruptions of coverage and financial assistance. We summarize some of the 2017 changes for FFMs below.
Renewals and redeterminations
As they did last year, eligible consumers who take no action will be automatically renewed into coverage and with financial assistance, if applicable. Unlike last year, however, the FFM will try to ensure that eligible enrollees who receive cost-sharing reductions because they have chosen health plans in the silver metal level remain in silver level plans and continue receiving financial assistance. Moreover, since the amount of the premium tax credit is based on the second lowest cost silver plan, continued enrollment in a silver plan can help eligible enrollees maximize the value of their financial assistance.
In addition, if an insurer discontinues a silver plan within a certain product line (i.e., HMO vs. PPO), the FFM will ensure that enrollees in that plan are renewed into another silver plan in the most similar product line offered by the same insurer. If no silver plan is available, however, the FFM will renew eligible enrollees into the next higher or lower metal level plan of the most similar product from the same insurer.
The marketplace also has a hierarchy for re-enrollment that kicks in when an insurer is pulling out of the marketplace altogether and its enrollees don’t return to the FFM to actively re-enroll with a new company. In this situation, state regulators have the option of directing the re-enrollment process on the marketplace, but the FFM serves as the default. The FFM will automatically re-enroll eligible enrollees into marketplace plans with the lowest premium in the same metal level and the same product network type. Re-enrollment must be in marketplace plans to ensure the continuation of financial assistance, if applicable. The FFM must also prioritize silver level plans for those consumers who had 2016 silver plans when possible.
Additionally, as they did last year, the marketplace will discontinue financial assistance for 2017 coverage to enrollees who failed to file a tax return and reconcile their premium tax credits. This is a requirement for financial assistance. Unlike last year, however, the marketplace will provide some flexibility to enrollees who are part of a household in which the tax filer failed to file a return. These new rules are particularly relevant for households with adult dependents, such as an elderly parent or disabled adult child. In such a case, if the tax filer for the household failed to file a return or reconcile the previous year’s tax credits, the enrollee (i.e., the adult dependent) can return to the marketplace to update his or her information for a January 1, 2017 coverage start date. So long as he or she had previously authorized the marketplace to access IRS tax data, he or she has the opportunity to get an eligibility determination for financial assistance. Thus, as long as someone in this particular situation takes action by December 15, 2016, they may be able to maintain their financial assistance. If they take no action, however, their financial assistance will be discontinued starting January 1, 2017, along with the rest of their household.
Notices
Renewal and discontinuation notices for 2017 will also be getting a facelift. Not only will the proposed notices be shorter, they should more clearly provide enrollees with direction on what to do compared to last year’s notices. For example, the statement: “You don’t have to do anything” from last year’s notices is gone. It has been replaced with a statement that if the enrollee doesn’t take action by a date (likely December 15, 2016), they will be automatically re-enrolled into similar coverage. Moreover, the notices will use a step-by-step format that directs enrollees to update their information and to select a plan, even the same one; gone is the option to not do anything. With discontinuation notices, the use of text boxes and the word “urgent” along with penalty amounts for not having coverage help to convey the importance of shopping and getting coverage, and the consequences for not acting. The administration is expected to finalize the new language for the 2017 notices soon.
Consumer shopping tools
Like last year, the out-of-pocket cost calculator and the doctor look-up and prescription drug check tools will be available at the start of this year’s open enrollment. Quality ratings of health plans, however, will not be available nationwide as originally envisioned. The FFM will make them available as a pilot in five states: Michigan, Ohio, Pennsylvania, Virginia and Wisconsin in order to allow for consumer testing. State-run marketplaces are also no longer required to have the quality ratings up in time for OE4.
In addition, the FFM is encouraging insurers to offer new types of plans – called “Simple Choice” plans. These are standardized options that have the same fixed deductible, out-of-pocket limits, and copayments for specified services within the bronze, silver, gold and platinum metal levels. These plans also provide pre-deductible coverage of certain benefits like primary care or an appointment for a mental health or substance use disorder. While it is not yet known how many insurers will offer these Simple Choice plans, the FFM has promised to display them “prominently” in the plan compare feature of healthcare.gov.
Shopping
These new policies will help shape – and hopefully improve – consumers’ open enrollment experiences. But one constant – the benefit of shopping – remains. Enrollees who shopped and switched plans during the last open enrollment saved an average of $42 dollars a month in premiums or approximately $500 a year. Annual plan shopping ensures that enrollees get the opportunity to see what new plans and features are being offered. Moreover, as premiums and the amount of the premium tax credit change year to year, shopping maximizes the value of financial assistance.
2 Comments
Regarding the Marketplaces push for people to shop and switch plans often, is the message getting out to them about the harm this does? Yes, there are a few dollars savings ($42/mo avg, you said) but the lack of continuity of care and the lack of familiarity, ever, with their plans, more than offset the savings, I think. Even in a tiny state like Montana, our three insurers offer over 40 plans, almost all of them changed each year, many of them offering different provider networks. People switch to save a few dollars and then find out they can’t see their old providers. As a broker, I help my clients through all this, advising them of when there are REAL premium imbalances that suggest a good re-look is in order. But my ability to help on the real issues is diminished by the fact that my clients who are content and have no reason to change call (in response to the YOU MUST SHOP message) and take up the time I could be using to help where it’s actually helpful. I think this promotion of shopping and switching EVERY YEAR, for its own sake, is a huge disservice to the consumers. When brokers used to promote switching, it was called churning…(I became a broker just in response to Obamacare, but I’m somewhat aware of the old landscape)
Thanks for your comment and your point that shopping and switching may not be for all consumers. The marketplace does encourage enrollees to be active purchasers so that they can choose plans according to the factors that are most important to the individual; factors like price, provider networks, quality, customer service. As you point out, plans change every year including provider networks, and some enrollees may find that even if they don’t switch plans, they can no longer see their provider because he/she is no longer part of the network. If seeing a certain provider in-network is the most important factor to a consumer, then looking at the health plan (which may have changed) or shopping is encouraged. Overall, shopping is encouraged so that enrollees can see what other options exist for them and switch, if necessary. Also, since the amount of financial assistance for premiums is tied with the second lowest cost silver plan, which changes year to year, enrollees receiving financial assistance are encouraged to shop so that they can maximize the value of their financial assistance. As you rightly point out, the marketplace is a new landscape. As both the marketplace and its consumers mature, the message to shop (and switch, if necessary) may change. However, since we’re only still in year 4, the marketplace is encouraging its consumers to shop so that they can choose plans according to factors that are most important to them and to maximize the value of their financial assistance.
1 Trackback or Pingback