A little-discussed provision under Obamacare allows people to make changes to their health insurance plans if their insurer drops out of healthcare.gov, even though most other enrollees will be locked into their plans once the enrollment period ends.
Changes are permitted during a special enrollment period that was allowed under the Obama administration and continued by the Trump administration.
If existing customers fail to change, renew, or cancel their health insurance coverage by Dec. 15, and their insurer is no longer participating in the exchange, they are automatically placed into a plan similar to the one they just lost. But those customers aren't locked into the plans if they don't want them or cannot afford them, and have a couple of months to switch coverage.
The ability to change coverage is especially pertinent this year, as a wave of health insurers have left the exchanges in the face of millions of dollars in losses and uncertainty from the Trump administration about how the law will be carried out. Changes to open enrollment, such as a shorter enrollment period and less federally funded advertising about the law, can complicate customers' understanding of what their options are.
According to guidance from the Centers for Medicare and Medicaid Services, "consumers whose issuer isn’t offering their plan in 2018 are eligible for a special enrollment period due to losing coverage and have the opportunity to choose a different plan." For them, a 60-day special enrollment period is triggered when their new coverage starts in January, meaning the drop deadline to get a different plan is March 1, though they can sign up for plan by Dec. 31 to receive coverage for the new year, a CMS official confirmed.
As long as customers pay premiums by Dec. 31 for the plan they were automatically enrolled into, whether themselves or through subsidies, they will not face a gap in coverage if they opt to make a change early in the new year.
Not every customer who has been automatically re-enrolled receives the same flexibility. Though people can stop paying their premiums at any time, which would cause them to become uninsured, they cannot change to a plan they might prefer unless they meet one of the conditions for switching, such as moving, having a baby, or getting a divorce.
"The special enrollment period applies if you have a PPO and your insurer is dropping all PPOs and switches them to HMOs, for example. But it doesn't apply for more minor changes, like deductible or copay increases," said Louise Norris, who has blogged extensively about the topic for Healthinsurance.org and co-owns a health insurance agency with her husband.
In 2018, unlike in 2017, customers who are automatically re-enrolled into the same plan, for the most part, cannot switch to a plan just because it is less expensive or because they notice that a doctor they prefer is no longer covered.
Every year during open enrollment, a certain number of Obamacare customers don't change, cancel, or re-enroll in a health insurance plan.
Rather than get cut off completely and risk becoming uninsured, they are automatically re-enrolled into the same plan they had the previous year. If that plan isn't available, they get bumped into a similar one and will be notified at several points around open enrollment.
Though the provision is intended to make things easier for people who may receive subsidies and want to keep the same plan, for others it carries the risk of being placed in coverage that they might not want or cannot afford. Even if it's the same plan as the previous year, another plan might be less expensive or have a better network of doctors and hospitals.
Read more: Obamacare customers look for alternatives
"The bottom line is that health insurance providers want to ensure individuals have reviewed all their options and are satisfied with their coverage for 2018 including the cost, the network, and their benefits," said Cathryn Donaldson, a spokeswoman for America's Health Insurance Plans, which represents insurers.
The open enrollment period last round spanned 90 days, which allowed anyone who missed the Dec. 15 deadline to have coverage start Jan. 1 to still change their plans, even if they had been automatically re-enrolled. Come Jan. 1, they still had about a month to make a decision.
"Previous auto-enrollments happened with time still left on the clock, so if a person got renewed in a plan that they did not like or that cost them too much, there was still a correction window," said David Anderson, a research associate at Duke University's Margolis Center for Health Policy. "This year, the auto-renewal will occur without a correction window."
Many customers will be locked into their plans unless faced with a life change that qualifies them for a special enrollment, such as a divorce, the birth of a child, or a move. Last year, 2.8 million people of the 12.2 million total signups nationwide were automatically re-enrolled. It is not known how many of this total chose a different plan when they found out or decided to drop out altogether and become uninsured.
Questions about whether healthcare.gov will be able to retain customers linger, and auto-renewal is a contributing factor. By the first half of this year, enrollment in both state and federal exchanges fell from 12.2 million to 10.1 million people. Though there is attrition throughout the year, as customers stop paying their premiums or land jobs that offer health insurance coverage, other factors may make the plans less attractive to customers.
For instance, the price of premiums for midlevel plans sold on healthcare.gov has risen by an average of 37 percent, which is largely the result of President Trump ending payments to insurers that reimburse them for offering lower out-of-pocket costs to low-income customers.
This year, 29 percent of healthcare.gov customers have just one health insurance company offering coverage, and it may not be the same insurer that they received coverage from the year before. For many, that will mean having access to a different set of doctors and medical facilities, a circumstance that could be disruptive for someone receiving ongoing care for a chronic condition, for example.
Advocates also have been concerned that customer confusion about the law, caused by ongoing battles on Capitol Hill, will hurt enrollment. Trump has called Obamacare "dead" and Republicans are on the cusp of repealing the individual mandate that obligates people to have health insurance or pay a fine. A recent poll from the left-leaning Public Policy Polling found that 30 percent of respondents weren't sure when the open enrollment deadline was.
The option to buy coverage that doesn't follow Obamacare's mandates is also ahead as the Trump administration prepares to publish new rules about association health plans and short-term health insurance plans. Both are likely to offer less expensive alternatives, but insurers fear they will further deplete the portion of healthier enrollees who buy Obamacare-compliant plans.
Healthcare groups this week wrote that the executive order directives "all increase adverse selection in insurance markets that serve millions of individuals and employers."
"We are concerned that this could create or expand alternative, parallel markets for health coverage, which would lead to higher premiums for consumers, particularly those with pre-existing conditions,” they wrote in a letter urging states not to accept the federal regulations.
If more customers drop plans in 2018, it would lead to higher premium prices and lower insurer participation in later years.