HHS: Shop for New Exchange Plans To Avoid Cost Increases

On Thursday, Obama administration officials said millions of U.S. residents with federal exchange coverage should shop for a new plan to avoid premium increases or reductions in subsidies, the New York Times reports.

Consumers will automatically be re-enrolled in their current plans if they do not select a new plan by Dec. 15, for coverage effective Jan. 1, 2015. However, consumers can make changes until Feb. 15, 2015, to their plans for the rest of 2015.

HealthCare.gov CEO Kevin Counihan said, "More than seven in 10 of our customers can find lower prices by shopping" for new exchange plans, while "[r]oughly eight in 10 of our customers can get coverage for less than $100 a month after" subsidies (Pear, New York Times, 12/4). He added that "the vast majority of people" with exchange plans would experience "rate increases in high single digits" if they "stay in the same plan" (Ferris, The Hill, 12/4).

Specifically, an HHS report released Thursday showed that premiums for the lowest-cost silver plan for 2015 will increase by an average of 5% in the states that use the federal exchange (Alonso-Zaldivar, AP/Washington Times, 12/4). Meanwhile, premiums for second-lowest cost silver plans, which are used as benchmarks to determine subsidies, have increased by about 2%, according to the report. The increase means that the subsidies individuals receive might change, which could affect consumers' total out-of-pocket coverage costs (Millman, "Wonkblog," Washington Post, 12/4).

Counihan said consumers in most areas are expected to have more exchange plan options (New York Times, 12/4). For example, the report showed that more than 90% of U.S. residents can choose from exchange plans from at least three insurers, up from 74% who had such options during the last open enrollment period. On average, consumers can choose from an additional 10 exchange plans.

Officials added that if all individuals currently enrolled in exchange plans switch to the lowest-cost plans available to them during this open enrollment period, they would save a combined $2 billion on premiums (The Hill, 12/4). HHS Assistant Secretary for Planning and Evaluation Richard Frank said, "We haven't done the calculation" for the amount the average individual would save, but the agency is "highlighting the fact that there are real financial consequences overall to people paying attention and switching" (Novack, National Journal, 12/4).

Convincing Enrollees To Shop for Coverage Might Be Difficult

While federal officials are working to convince individuals to shop on HealthCare.gov, it appears they might have a tough road ahead of them. A Bankrate.com poll released earlier this week showed that a majority of U.S. residents equated shopping for health coverage with having a cavity filled or similarly unenviable activities (Viebeck, The Hill, 12/2).

Regardless, the administration is pushing forward, sending "highly targeted" information to current enrollees about their plan options "when people are in situations where more information will help them," CMS Principal Deputy Administrator Andy Slavitt said. He added that the administration is also encouraging people who want to keep their current plans to update their information in HealthCare.gov to ensure they are "maximizing their tax credits" ("Wonkblog," Washington Post, 12/4).

Fine Print Has Big Changes in 2015 Health Plans

In related news, although many consumers renewing their current exchange coverage expect to receive similar benefits, small details about how those benefits are administered in 2015 could mean higher out-of-pocket costs, the New York Times' "The Upshot" reports.

For example, some of the updated plans note that consumers will not pay anything out-of-pocket for generic prescription drugs but that the costs of specialty medications have increased. Meanwhile, copayments for physician visits might decrease but costs for emergency department visits will increase.

Avalere Health Vice President Caroline Pearson said, "You're getting re-enrolled in the same carrier, but there's basically no guarantees that your product looks anywhere near the same as it did last year."

However, consumers can use a ProPublica tool to compare plan changes. Among other things, the tool can help individuals see changes in their:

• Out-of-pocket maximums for medical care;
• Deductibles;
• Medication costs, including potential increases in specialty medication costs; and
• Copayments (Ornstein et al., "The Upshot," New York Times, 12/4).