An already chaotic, confusing open enrollment period, run by an administration openly hostile to the Affordable Care Act, just got worse.
As health care consumers across the country find themselves with half as much time to enroll, and with far fewer resources for information and assistance, many people across the country are also receiving renewal notices from their insurers showing wildly inaccurate estimates of how much they will have to pay in premiums.
Government officials and health care experts fear many consumers will not do the research necessary to learn that they qualify for far lower premiums than these letters suggest—depressing overall enrollment and weakening Obamacare’s already vulnerable individual market.
The basic problem, flagged this week by the Kaiser Family Foundation, happens every year. Because insurers often have to send out renewal notices to their consumers before they know what next year’s federal tax credits will be, they estimate the new year’s monthly premiums based on the assumption that the consumer will receive the same amount of tax credits for premiums as they did the year before.
But the issue was massively exacerbated this year by the Trump administration abruptly yanking cost-sharing reduction payments from insurers right before the start of open enrollment. That sudden move is causing big premium hikes, but Obamacare shields most consumers from the impact by increasing the federal tax credits. The renewal notices landing in the mailboxes of millions of people around the country show the premium hikes but use last year’s lower subsidy amounts, making it appear as though the plans cost as much as several hundred dollars more per month than they really do.
Though there have been only isolated reports of this problem in local news outlets in various states, the Kaiser Family Foundation’s Larry Levitt told TPM that “it’s reasonable to assume that this is quite widespread.”
“This [premium disparity] has been true in some counties in some years, but never as widespread as we’re seeing this year,” he said.
His colleague, Kaiser senior fellow and former HHS staffer Karen Pollitz, confirmed that while there is no national tracking of the problem, “logically, this is the norm.”
In the midst of an already topsy-turvy open enrollment period, several states are dealing with the fallout of these misleading notices.
Alex Feldvebel, New Hampshire’s deputy insurance commissioner, told TPM that his office has been fielding calls from confused and irate residents—some of whom received letters saying, incorrectly, that their out-of-pocket costs will jump from $200 to $600 per month. He’s been directing them to Healthcare.gov, where most find they will have to pay much less, and in many cases qualify for a free plan, but he said he’s worried about those who don’t call.
“We are concerned that some people who get the renewal notice feel they can barely afford their contributions from the current year, and if they see it triples, that might discourage them from ever going online and signing up,” he said.
Feldvebel noted that the standard renewal form does tell consumers “this is only an estimate” and directs them to update their financial information online, but that caveat comes after paragraphs laying out “your new premium.” And while his office has been working to inform state residents about the premium over-estimates through press releases, on-the-ground outreach and local media interviews, they are struggling against a tidal wave of general misinformation washing over this year’s open enrollment.
“There has been a 90 percent cutback in federal outreach funding,” he said. “There are all the news stories about the non-funding of the CSRs—which tended to create the impression for some people that those subsidies were not available when in fact they are available. So, this year, the renewal notices are just adding to general high level of confusion.”
Insurers are struggling to address the confusion as well.
Kristine Grow, senior vice president of communications at America’s Health Insurance Plans (AHIP), told TPM that “insurance providers give you the best estimate of the subsidy you qualify for, based on the information they have at the time,” and that once they receive information from the Department of Health and Human Services about the federal subsidy levels for 2018, they will send consumers a supplemental notice in the mail.
Independence Blue Cross, which operates in Pennsylvania, has already done so.
“Once we received updated information we sent final renewal packages with 2018 subsidy information via text messages, emails, and regular mail,” Koleen Cavanaugh, Independence’s vice president of marketing, told TPM, adding that the company’s website “also includes a subsidy estimator that allows consumers to quickly determine if they qualify for financial assistance to help pay for their coverage.”
Of the 90,000 tax credit eligible customers who got renewal notices from Independence, Cavanaugh said, more than half are “eligible for a zero premium plan in 2018.”
The effect of Trump’s policy changes go beyond discouraging consumers from renewing.
Experts have long cautioned that consumers who have insurance through Obamacare should actively shop each year to make sure their current plan is still the most affordable option. That is especially true this year, with the changes to the subsidies triggered by Trump’s CSR cuts, and with the new, earlier deadline. If current enrollees don’t actively choose a new plan or drop out of the market by Dec. 15, they will be automatically re-enrolled in their current plan, premium hikes and all, even though they may qualify for higher subsidies under different plans.
Unlike in past years when the deadline was in late January, consumers automatically re-enrolled this year will not be able to make any changes, and may be locked into more expensive plans.