Alternate headline: HHS Decides to Make Plan Choices for the Grubes. In a Friday afternoon filled with document dumps, HHS announced that its controversial auto-enrollment plan would be significantly changed in 2016. This year, enrollees who allowed their plans to auto-renew risked running up big tax bills, thanks to annual recalculation of subsidies and base rates. To solve that problem, HHS wants people to allow the Obama administration to auto-enroll them into the lowest-cost plan in their 2016 tier, regardless of what the coverage or deductibles will be:
Another proposal calls for having Obamacare customers be “defaulted” to a lower-cost insurance plan instead of their current plan.
“Under current rules, consumers who do not take action during the open enrollment window are re-enrolled in the same plan they were in the previous year, even if that plan experienced significant premium increases,” CMS said.
“We are considering alternative options for re-enrollment, under which consumers who take no action might be defaulted into a lower-cost plan rather than their current plan.”
Although CMS said it is considering allowing state-run Obamacare exchanges to implement that default option in 2016, the agency is eyeing using that option on the federal Obamacare exchange HealthCare.gov starting only in 2017.
While the defaulted option could protect customers from sticker shock once their now-pricier plan renews, the option also increases the likelihood that people will find themselves in a plan that doesn’t include their preferred doctors or hospitals.
The ObamaCare sales pitch has really progressed, has it not? We started at If you like your plan, you can keep your plan, which Politifact belatedly called the Lie of the Year once ObamaCare rolled out in 2013. After that, the White House line was If you liked your plan, it’s because you were too stupid to know what’s good for you, but you’ll like what you can pick now. Finally, we’ve arrived at You’re still too stupid to choose your own plan, so you’ll like what we tell you to like.
If this sounds familiar, it’s because it follows the basic message of Jonathan Gruber ever since Congress passed ObamaCare. This system was set up by people who have contempt for Americans exercising free choice, and it was designed to remove choice in favor of elitist diktats.
Peter Suderman points out that the actual solution to this problem is to turn off auto-renewals and instruct people to enroll each year for their coverage. That’s what most employers do as well; every employer for which I’ve worked has required their employees to enroll each year in order to make sure they are informed of pricing and coverage changes. HHS won’t do that, though, because they’re afraid of the attrition:
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?
At the moment, this is a proposal, not yet a rule change. There may be some room in it to give users the option to turn off auto-renewal, although one might imagine just how difficult it will be to find that option in a notoriously-unfriendly system. Don’t expect HHS to back away from this plan, though, especially after having 1.3 million enrollees disappear from their system in just 5 months this year.
It’s becoming a real clown show, bro. Or maybe a clown shoe, Mary.