If You Like Your Obamacare Health Plan, You Can Keep It, If HHS Doesn't Pick a New One For You



Here's a Friday Obamacare news-dump for you: In a 300-page regulatory proposal released late this afternoon, the Department of Health and Human Services announced that it is considering changing Obamacare's auto-renewal rules so that, within the health law's exchanges, instead of being automatically renewed into your current health plan, you'd be moved into the lowest cost plan from the same service tier.

From the attached fact sheet

Under current rules, consumers who do not take action during the openenrollment window are re-enrolled in the same plan they were in the previous year, even if that plan experienced significant premium increases. 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.

(Fact sheet via Adrianna McIntyre; proposal first noted by Politico.) 

States running their own exchanges could start doing this in 2016, and federal exchanges could start in 2017. 

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? 

This isn't an actual rule yet; it's just a proposed rule. But the fact that Obamacare's overseers are thinking like this says a lot—about their government-knows-best bureaucratic mentality and about the complications of the law itself. 

Update: There does appear to be some possibility of user choice built into the plan; although the summary fact sheet doesn't note it, enrollees would be able to select whether or not they want to be involved in auto-reassignment. Enrollees still, however, wouldn't know exactly what they would be getting into when they made their choice.