Update, December 6: On December 3 and December 4, 2014, the Department of Health and Human Services released additional data regarding the second open enrollment period. On December 3, HHS issued its second open enrollment statistical report, covering the week of November 22 to 28, 2014. Not surprisingly, given that most Americans were occupied with the Thanksgiving holiday, activity was down from the first week of open enrollment, with 303,610 plan selections and 520,427 applications submitted, compared to 462,125 plan selections and 1,032,129 applications the first week. Call center volume and healthcare.gov visits were also down sharply. As in the first week, about half (49 percent) of the visitors were new consumers and half (51 percent) were consumers renewing coverage.
Consumers have until December 15 to enroll or reenroll and have coverage effective as of January 1, 2015, while open enrollment lasts until February 15, 2015. Many more enrollments and reenrollments are to be expected before open enrollment wraps up. Moreover, most current enrollees will be automatically reenrolled in their current plan or a similar plan if they do not return to the exchange to choose a 2015 plan, so the statistics do not indicate how many 2014 enrollees will be back for 2015.
A second report, released December 4 by the Assistant Secretary for Planning and Evaluation (ASPE) on Health Plan Choice and Premiums in the 2015 Health Insurance Marketplace, however, emphasizes the importance of current enrollees in fact returning to the marketplace and selecting a plan for 2015 rather than simply being reenrolled passively
The overall picture of the 2015 federally facilitated marketplace (FFM) that appears in the report is quite positive. There are 25 percent more insurers participating in the FFM for 2015 than 2014. Ninety-one percent of enrollees live in a county with 3 or more insurers. On average, 40 plans are available per county, up from 30 for 2014. Although premium increases or decreases vary significantly from state to state, on average premiums for the second-lowest cost silver plan have increased only 2 percent, and premiums for the lowest-cost silver plan have increased only 5 percent, before the application of tax credits.
A primary message of the report, however, is that the FFM insurance market is very dynamic and competitive, with premiums increases or decreases varying significantly from plan to plan. The amount of premium tax credits is set based on the benchmark plan — the second lowest-cost silver plan. The 2014 second lowest-cost silver plan may very well not be the benchmark plan for 2015. Thus, an individual who received the maximum premium tax credit by enrolling in the 2014 benchmark plan may receive a smaller tax credit in 2015 if that plan costs more than the 2015 benchmark plan and the enrollee remains with it. The enrollee will thus have to pay more for the 2014 plan in 2015.
Even enrollees who do not receive a tax credit (and 15 percent of enrollees did not in 2014) may find that they can save money by switching plans for 2015 because less expensive new plans have entered the market or because the relative cost of plans has changed. More than 7 out of 10 current FFM enrollees can find a lower-cost plan at the same metal level by returning to shop. The average consumer who bought a silver plan for 2014 can save almost $492 a year by switching plans. Across all metal levels, 2014 consumers could save almost $2 billion by shopping for a less expensive 2015 plan in the same metal level.
After the application of tax credits, 54 percent of silver plan enrollees could find silver plan coverage for $50 or less per month by returning to the marketplace and shopping for a less expensive plan, while an additional 23 percent could get coverage for $50 to $100. By contrast, if 2014 enrollees do not switch plans, only 31 percent if will get silver plans for $50 or less, and 27 percent will get silver plans for between $50 and $100 ,after the application of tax credits if they do not shop. Other changes in 2014 plans may also make it worthwhile for consumers to return to the marketplace to shop.
It is important to understand that changes can be made and savings achieved without changing metal levels, that is, without taking on increased cost-sharing. While different plans within the same metal level may have somewhat different deductibles, coinsurance, or co-payment levels, they should have very similar total cost sharing levels—that is what it means to have the same actuarial value. They may, on the other hand, have different provider networks or formularies or vary in other important respects, and less restrictive plans are likely to have higher premiums. It is also very important that consumers with incomes below 250 percent of poverty think very carefully before changing from a silver plan to a lower-premium bronze plan, as cost-sharing reduction payments, which can reduce dramatically deductibles and co-insurance amounts, are only available with silver plans. Consumers should not change plans simply to save money without checking out other plan features, but for many people a move to a less expensive plan is a desirable option, as the ASPE report makes clear.
Original post: On December 1, 2014, the Centers for Medicare and Medicaid Services (CMS) released a Guidance for Issuers on 2015 Reenrollment in the Federally facilitated Marketplace (FFM). This guidance sets out in great detail—with clarifying examples—the process which the FFM and insurers will use to send and receive enrollments and reenrollments for 2015, including the process that the FFM will use to communicate to an insurer when a 2014 enrollee selects a different insurer for 2015 coverage. The guidance is primarily directed at insurers but should also be of interest to consumers and those who are assisting them. It demonstrates, I believe, a much higher degree of planning and intentionality than was evident in the 2014 open enrollment period, when enrollment rules often seemed to be developed on the fly.
This post describes the reenrollment guidance, as well as initial enrollment figures for the FFM and other ACA-related developments. Read the rest of this entry »