Health Law Has Caveat on Renewal of Coverage

Millions of consumers will soon receive notices from health insurance companies stating that their coverage is being automatically renewed for 2015, along with the financial assistance they received this year from the federal government.

But consumer advocates and insurers say they see a significant potential for confusion because some of the information will be out of date and misleading on costs and other aspects of coverage. Some people who have been receiving monthly subsidy payments this year could get much less if they stay in their current health plans.

The Obama administration announced in June that most people with insurance purchased in the federal marketplace would be automatically enrolled in the same or similar plans next year, so they would not need to file applications or go back to to continue their coverage.

Now, however, the administration is emphasizing that consumers should revisit the marketplace to make sure they are getting the right amount of financial assistance and to compare other health plans.

President Obama said in April that eight million people had enrolled in private health plans through federal and state marketplaces created under the Affordable Care Act. The Congressional Budget Office estimates that the total will climb to 13 million in the next open enrollment period, which runs for three months starting on Nov. 15.

Federal officials told insurers this month to send out standard renewal notices written by the government. The notices inform consumers of the new monthly premium for their health plans in 2015 and the most recent amount of any subsidy, or tax credit, paid for a household in 2014.

In many cases, insurers will notify consumers that they face higher premiums but will not provide them any information about higher subsidies in 2015, a prospect that distresses insurers and consumer advocates.

A typical letter to consumers says: “You don’t have to do anything. You’ll automatically be enrolled and just have to pay the monthly premium.” In some cases, it says, “You will be automatically enrolled in a new plan, but the plan won’t offer lower co-payments, co-insurance and deductibles based on income.”

In June, the administration emphasized the benefits of passive re-enrollment. “At least 95 percent of consumers in the marketplace will not have to do anything to renew plans and their financial assistance,” Aaron Albright, a spokesman for the Centers for Medicare and Medicaid Services, the agency that runs the federal marketplace, said at the time.

Consumer advocates complained that this was the wrong message to send because it incorrectly implied that no action was required and that nothing was changing, and administration officials have responded.

“We will encourage everyone to come back to the marketplace to update their eligibility information and shop for the best coverage option that meets their needs,” Andrew M. Slavitt, the No. 2 official at the Medicare agency, said last week.

Federal officials said they did not have the ability to compute 2015 subsidies from the income data currently available to them, which could be one or two years old. For this reason, they said, consumers should go back to the marketplace and report changes in income or family size, which could affect the amount of their subsidies.

Kaiser Permanente, the large nonprofit health plan, said in a recent letter to the administration that requiring consumers to go to an exchange to ascertain their new subsidies would “significantly increase the administrative burdens on enrollees, marketplaces and carriers,” and seemed to defeat the purpose of a “passive renewal process.”

If people update their information online, Mr. Albright said, they will be directed to the “plan finder” at, where they can see all the insurance options available in their area. If they like their current coverage, they can renew it by entering the 14-digit identification number for their health plan. Or they can search for the plan in the online catalog of private insurance options known as Plan Compare.

Insurers have complained to the administration that the process is much more cumbersome than the one followed by workers at private companies. “Consumers will be frustrated and confused by having to locate their current option in Plan Compare, or by having to type a 14-digit number directly into the website,” Blue Cross and Blue Shield plans said in a recent letter to the administration.

Tax credits are affected by the premium cost for a benchmark “silver” policy and could change even if a person has the same income and the same health plan next year, experts say.

The government says people with insurance should report “income or life changes” — if, for example, they marry, have a new baby or start receiving coverage through a job. The changes can be reported online or by telephone, but administration officials said the federal exchange would no longer accept such information by mail. Consumer groups objected to elimination of the mail option. Many low-income people do not have ready access to computers, said Lynn Quincy, a health policy analyst at Consumers Union, and “call centers will be inundated with millions of new applicants during the open enrollment period.”

Consumers can expect at least two notices this fall, one from their insurer and another from the federal or state exchange through which they bought their insurance.

The federal exchange does not have accurate enrollment and payment records for some consumers because the “back end” of the computer system for, which keeps such data, has not been completed. As a result, the government and insurers have records that can differ on who is enrolled, the dates of coverage and demographic factors used to calculate premiums and tax credits.

Thus, for example, an insurer may have halted coverage for a consumer who failed to pay premiums, but the government may not have a record of the termination, so the federal marketplace would send a notice saying the coverage will be renewed in 2015.

The government and insurers are trying to reconcile their records, but the effort is behind schedule.

“This coming year will be one of visible and continued improvement, but not perfection,” Mr. Slavitt said.

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