Marketplace Customers Could See Higher Premiums, No Coverage For Out-Of-Network Care

When the health insurance marketplaces open on Sunday, consumers shopping for 2016 coverage may encounter steeper premium increases than last year and more plans that offer no out-of-network coverage.

According to an analysis released Monday evening by the Health and Human Services Department, the cost of the second-lowest silver plan in states using the federal marketplace will rise an average of 7.5 percent for 2016 coverage. Silver plans are the most popular type of marketplace plan. They pay 70 percent of medical costs, on average, leaving consumers to cover 30 percent. And premium tax credits that are available to people with incomes up to 400 percent of the federal poverty level — about $47,000 for one person — are benchmarked to the second-cheapest silver plan.

But the overall increase doesn’t tell the whole story for those shopping for insurance in the individual market — generally people who don’t get coverage through their work. Depending on the market, consumers may see larger or smaller increases or even declines in premiums. Premium changes for the second-lowest cost silver plan ranged from a 13 percent average decrease in Indiana to a 36 percent average increase in Oklahoma.

The consulting firm McKinsey & Company earlier had analyzed premiums reported in 26 states and found that in more than half of the rating areas in those states there will be a new insurer offering the lowest-cost silver plan next year.

“It’s indicative of the price jockeying that’s still going on in the market,” says Erica Coe, co-leader of McKinsey’s Center for U.S. Health System Reform. “If consumers want to have the lowest cost silver plan, they’ll have to shop.”

The open enrollment season for marketplace coverage runs from Nov. 1 through Jan. 31. People who want coverage to begin on Jan. 1 must buy a plan by Dec. 15.

Although most consumers zero in on premiums when comparing plans, next year it could be especially important to pay attention to the network of doctors and hospitals that are part of the plans that they’re considering. There will likely be fewer plans that cover broad networks of providers, says Kathy Hempstead, who directs health insurance coverage issues for the Robert Wood Johnson Foundation. In addition, a growing number of marketplace plans will cover only doctors or hospitals in their provider networks.

“The PPO and POS categories are definitely shrinking,” Hempstead says, referring to preferred provider organization and point of service plans, both of which typically offer coverage of out-of-network providers, although consumers generally have to pay a larger share of the cost. Instead, consumers may see more health maintenance organizations that don’t provide any out-of-network coverage.

Despite the well-publicized demise of nine health insurance co-operatives and other insurer exits, carriers moving into new markets next year will likely offset the declines. The number of carriers selling plans should be essentially unchanged at roughly 327 next year, according to McKinsey data based on 42 states.

This year, consumers in most states will have access to online tools to use while shopping for plans. unveiled its 2016 plans Sunday on the website, allowing customers in the two-thirds of states that use that federal marketplace to browse through plans in their area to see premium prices ahead of the actual start of enrollment. The revamped site also offered consumers a cost estimator to help determine their likely out-of-pocket costs in the plans. Two other new tools touted by federal officials to allow consumers to type in their doctors’ names or medication details and see whether they’re included in various plans are not yet ready to roll out. Federal officials said they hope to have them online soon, although they could not say if the tools would be ready by Nov. 1.

Some state-based marketplaces have similar tools available.

Although the online tools may streamline the process of comparing plans, consumers should always confirm details about doctors, hospitals and medications they receive online with the health plan directly.

Consumers who want telephone or in-person help choosing a plan can locate assistance on the state or federal marketplace websites. In addition, Enroll America, a consumer group that focuses on health insurance enrollment, connects people with local help through its website.

Even though shopping for plans should be easier this fall and it’s in consumers’ best interest to check out their options, chances are many won’t.

People who don’t renew their federal marketplace coverage will generally be automatically re-enrolled for Jan. 1 in their current plan, or a similar one if their plan has been discontinued. The government will incorporate the most up-to-date income, benchmark premium and poverty data when calculating the subsidy for auto-renewal.

That’s different from the past. When people didn’t update their income or other information for 2015 plans, they were automatically assigned the same premium tax credit amount they received in 2014.

Consumers who are automatically re-enrolled can change their plan until the end of January. But that may not be the best move, says Judith Solomon, vice president for health policy at the Center on Budget and Policy Priorities. “You’ll start your deductible all over again,” she says.

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