Even if you like your Obamacare insurance plan, Health and Human Services may move you by default into a different one — often with a different network of providers. In such situations, you wouldn't get to keep your doctors and other providers unless you acted.
That's what HHS's Center for Medicare and Medicaid Service has indicated in a 300-page proposal dumped yesterday so it would get minimal media attention (a six-page summary is here). Bloomberg News is one of the few outlets which has noticed it, and is predictably spinning it as a good thing (bolds are mine throughout this post; and numbered tags are mine):
Obamacare Users Would Move to Low-Cost Plans Under U.S. Proposal
Obamacare customers who choose to re-enroll in insurance plans would automatically default to cheaper coverage during sign-up periods, protecting them from price increases [1], 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 and Medicaid Services. 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 the Patient Protection and Affordable Care Act. On Dec. 15, consumers who are already insured through the government marketplace will automatically be enrolled again in their current plan [2], 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. [3] There were about 6.7 million people covered through Obamacare insurance plans through Oct. 15, and the administration has been urging them to check whether their premiums are rising.
... The most popular plans in the marketplace in 2014 are increasing their premiums by 10 percent on average in 2015 [4], 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.
Notes:
[1] — No, what this does is "protect" the government from having to tell the nation the degree of cost increases in existing plans to existing customers. Auto-switching them to another lower-cost plan will enable them to claim a lower cost increase than a true year-over-year, apples-to-apples comparison.
[2] — Auto-renewal is not a "quirk," it's how much insurance normally works, and it's how many consumers expect that insurance will work. Auto-defaulting consumers into a lower-cost plan and forcing them to do something about it if they want to keep their current plan's design and provider network is (here we go again) heavy-handed, authoritarian over-reach.
[3] — Customers normally don't worry about "shopping around" unless and until they become dissatisfied with their current plan. Some may even be willing to absorb relatively high cost increases to maintain the status quo, especially if they or one of their children is fighting a serious disease which is being managed by a trusted doctor or other provider. What's wrong with that? Nothing, unless your goal is backdoor rationing. All other things being equal, the auto-default lower-cost plans will on average have more frugal plan designs.
[4] — HHS doesn't want to have to disclose double-digit increases again. Default re-enrollments into other plans is a way to "solve" that problem on the backs of its users.
Nowhere does Bloomberg's Crayton Harrison indicate that default enrollment into another plan will often if not usually mean a default switch to a different provider network, and the sudden need to change doctors, switch to other providers, and review approved drug lists.
Reason.com's Peter Suderman has more (HT Instapundit):
It's not just auto-reenrollment. It's auto-reassignment, at least for those who pick that option. Basically, if you like your plan, but don't go out of your way to intentionally re-enroll, the kind and wise folks at HHS or state health exchanges might just pick a new plan—perhaps with different doctors, clinics, cost structures, and benefit options—for you. And if you want to switch back? Good luck once open enrollment is closed. There's always next year.
A hassle? Maybe. But have faith: They know what's best.
Presumably the idea came up because, even though by some measures premiums aren't rising by large amounts this year, premiums for many of the lowest cost and most popular plans from last year are rising quite a bit. And since HHS decided over the summer to institute auto-renewal, and since the majority of Obamacare enrollees are expected to take no action and thus stay in their current plans, the reality is that under the current system a lot of enrollees are likely to see large premium hikes, just because they didn't shop around for a new plan.
This sort of problem was more or less inevitable with automatic renewal, which was probably instituted as a way to shore up enrollment and prevent too much attrition in year two. The easy, straightforward way to fix it would be to turn auto renewal off. But that might result in lower enrollment. And anyway, why go the obvious route when there's the possibility of having federal and state health bureaucrats make even more choices for you?
This isn't an actual rule yet; it's just a proposed rule. But the fact that Obamacare's overseers are thinking like this says a lot—about their government-knows-best bureaucratic mentality and about the complications of the law itself.
Of course they know best, because, as Jonathan Gruber has said, they think we're all "stupid."
By the way, the opportunities for graft seem substantial. How long will it be before bureaucrats and insurers figure out that becoming one of the auto-default plans is worth a lot of money?
Cross-posted at BizzyBlog.com.
