Gov­ern­ment to pick plans for dis­placed cus­tomers

Daily Local News (West Chester, PA) - - BUSINESS - By Ri­cardo Alonso-Zal­divar

WASH­ING­TON » The Obama ad­min­is­tra­tion is wor­ried that in­sur­ers bail­ing out of the health law’s mar­kets may prompt their cus­tomers to drop out, too. So it plans to match af­fected con­sumers with re­main­ing insurance com­pa­nies.

The hope is to keep peo­ple cov­ered, but there’s con­cern that the gov­ern­ment’s match-mak­ing will cre­ate con­fu­sion and even some dis­ap­pointed cus­tomers.

The new back­stop was out­lined in an ad­min­is­tra­tion doc­u­ment cir­cu­lat­ing among in­sur­ers, state reg­u­la­tors, and con­sumer groups. It also calls for reach­ing “dis­con­tin­ued con­sumers” with a con­stant stream of re­minders as the law’s 2017 signup sea­son ramps up. Open en­roll­ment for Health­Care.gov starts Nov. 1 and ends Jan. 31.

The insurance mar­kets were en­vi­sioned as dy­namic en­gines of pri­vate com­pe­ti­tion. But in many states, they have run into prob­lems.

Some con­sumer ad­vo­cates say this lat­est ef­fort will help peo­ple re­tain cov­er­age in a chal­leng­ing year when pre­mi­ums also are ris­ing. Other ad­vo­cates, how­ever, worry it will cause con­fu­sion. In­sur­ers fear a back­lash from cus­tomers dis­ap­pointed with re­duced op­tions. The ad­min­is­tra­tion says con­sumers have the last word on ac­cept­ing any “al­ter­nate” plan they’re of­fered.

“I’m con­cerned that the al­ter­na­tive plan will look like a ‘rec­om­mended choice’ by the mar­ket­place,” said El­iz­a­beth Colvin, direc­tor of In­sure Cen­tral Texas, an Austin non­profit that helps peo­ple sign up for cov­er­age.

“The way it is pre­sented could be in­ter­preted as, ‘This is a plan we rec­om­mend,’ or ‘This is a plan we think will work for you,’ or ‘this is one of the bet­ter plans,’” Colvin said.

The ad­min­is­tra­tion said it isn’t able to pro­vide an esti-

mate of the num­ber of peo­ple who’ll get no­tices about their new plans. It could range from sev­eral hun­dred thou­sand to 1 mil­lion or more, say in­de­pen­dent ex­perts.

Big-name in­sur­ers are leav­ing the mar­ket be­cause of fi­nan­cial losses and non­profit insurance co-ops are col­laps­ing. In­sur­ers say cus­tomers have turned out to be sicker than ex­pected. Many younger, health­ier peo­ple have stayed away, even at the risk of fines for be­ing unin­sured.

Mar­kets such as Health­Care.gov pro­vide sub­si­dized pri­vate cov­er­age for peo­ple who don’t have a job-based plan. About 11 mil­lion peo­ple are cur­rently cov­ered.

The orig­i­nal idea was that com­pet­i­tive mar­kets would force in­sur­ers to of­fer qual­ity cov­er­age at af­ford­able prices. That tends to work in metro ar­eas. But many ru­ral com­mu­ni­ties and small cities will have just one car­rier next year.

Demo­cratic pres­i­den­tial nom­i­nee Hil­lary Clin­ton is calling for a stronger gov­ern­ment role through the in­tro­duc­tion of a pub­lic insurance plan.

With the mar­kets strug­gling, ad­min­is­tra­tion of­fi­cials worry that in­surer ex­its could com­pli­cate their de­sire to de­liver strong sign-up num­bers in the pres­i­dent’s last year. So they are leav­ing noth­ing to chance.

The ad­min­is­tra­tion doc­u­ment says af­fected con­sumers may get 20 or more re­minder mes­sages just be­tween Nov. 21 and Dec. 15, which is the dead­line for se­lect­ing cov­er­age ef­fec­tive Jan. 1.

That could lead to prob­lems if the gov­ern­ment can’t turn off the no­tices af­ter a cus­tomer has picked a new plan. “Con­sumers panic and think some­thing went wrong,” said Colvin, the pro­gram direc­tor in

Austin.

The ear­li­est no­ti­fi­ca­tions will start this month. Around the sec­ond week of Novem­ber, con­sumers whose in­sur­ers are leav­ing the mar­ket will get a no­tice that Health­Care.gov has matched them to an­other plan. They also could re­ceive ma­te­ri­als from the new in­surer, in­clud­ing a wel­come kit and a bill.

Chris­ten Linke Young, an ad­min­is­tra­tion of­fi­cial over­see­ing the health care

mar­kets, stressed that con­sumers are un­der no obli­ga­tion to ac­cept the new plan.

“Un­der no cir­cum­stances is any­one go­ing to be en­rolled in a plan or need to pay any­thing with­out their con­sent,” she said. “Con­sumers are get­ting an op­tion, but they are not get­ting en­rolled into that prod­uct with­out their con­sent.”

Last year, most re­new­ing cus­tomers checked their op­tions be­fore pay­ing their

first month’s pre­mium. But this year, they may not have other vi­able choices if they live in an area re­duced to one in­surer.

Dis­placed cus­tomers who fail to sign up by the end of open en­roll­ment will get an­other chance to do so in 2017, what’s termed a “spe­cial en­roll­ment pe­riod.”

The new pol­icy will be ef­fec­tive in most states. In some cases, state reg­u­la­tors may have dif­fer­ent rules.

Some con­sumer ad­vo­cates say the ad­min­is­tra­tion is tak­ing a rea­son­able step, since los­ing more cus­tomers would fur­ther weaken the mar­kets.

“If you want as many peo­ple as pos­si­ble to re­main cov­ered, what they are do­ing is a good idea,” said Judy Solomon of the Cen­ter on Bud­get and Pol­icy Pri­or­i­ties, which ad­vo­cates for low-in­come peo­ple. “They are do­ing the best they can with a dif­fi­cult sit­u­a­tion on this one.”

THE AS­SO­CI­ATED PRESS

Wor­ried that in­surer ex­its from the health law’s mar­kets may cause many peo­ple to lose cov­er­age, the Obama ad­min­is­tra­tion plans to au­to­mat­i­cally pick a plan from a dif­fer­ent car­rier for af­fected con­sumers.

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