The Obama administration announced Thursday that most people would be able to renew subsidized health insurance coverage without filing an application and without going back to HealthCare.gov, the website that frustrated millions of consumers last fall.
But some people will have to go into the marketplace again - if, for example, their income has changed or they want to shop for a better deal in 2015.
Under rules proposed Thursday by the administration, most people who purchased health plans in the federal insurance marketplace could automatically renew their coverage and premium subsidies provided under the Affordable Care Act.
More than 5.4 million people selected health plans in the federal exchange for 2014, and 86 percent of them were found eligible for subsidies that lower the cost.
If millions of people had to enroll again through HealthCare.gov it could have proved a logistical nightmare for many consumers, insurers and federal officials.
“There had been talk of everyone having to re-enroll, which would have been a disaster,” said an insurance industry expert who meets often with federal officials and requested anonymity so as not to jeopardize those relationships.
Sylvia Mathews Burwell, the new secretary of Health and Human Services, said the administration was determined to minimize the hassles in the next open enrollment period, which runs from Nov. 15 to Feb. 15.
“We are working to streamline the process for consumers wishing to remain in their current plan,” said Burwell, who issued the rules encouraging automatic renewal.
Aaron Albright, a spokesman at the Centers for Medicare and Medicaid Services, which runs the federal exchange, said: “At least 95 percent of consumers in the marketplace will not have to do anything to renew their plans and their financial assistance. They won’t have to do anything to re-enroll.”
Federal officials will specify the contents of notices that insurers will send consumers later this year. A typical notice says: “Your health insurance coverage is coming up for renewal. You will be automatically re-enrolled and can keep your current coverage.”
The proposed rules show how the Affordable Care Act is becoming entwined in the fabric of national health policy and government regulation. Even as politicians continue fighting over the law, and many Republicans still hope to roll it back, the Obama administration is writing rules to keep the program in operation for years.
Ronald F. Pollack, the executive director of Families USA, a liberal-leaning consumer group, said: “The proposed rules are terrific. The overwhelming majority of people will be able to retain the coverage they gained this year and will be able to keep the subsidies that make insurance affordable.”
Joseph R. Antos, an economist at the conservative-leaning American Enterprise Institute, agreed that the proposed rules would simplify the administration of the program. But he said that they also increased the risk that “many more people will have subsidies that are too high or too low next year.”
People may qualify for subsidies this year if they have incomes up to four times the poverty level (up to $45,960 for an individual). Consumers are supposed to update their information if they have a change in income or life circumstances, like marriage or the birth of a child.
If tax return information indicates that a person’s income has increased to exceed five times the poverty level, the government will renew coverage in the same health plan but eliminate the subsidy.
Likewise, if a consumer has not authorized the insurance exchange to get updated tax information from the Internal Revenue Service, the subsidy payments will end Dec. 31. The Congressional Budget Office estimates that subsidies this year will average $4,400 for each person who receives a subsidy.
While consumers do not have to do anything, it may be to their advantage to ask the government to reassess their eligibility and recalculate their subsidies. Premiums for most plans are expected to increase in 2015, and many consumers will be eligible for larger subsidies, federal officials said.
Supporters of the law had worried that they might have to help millions of people re-enroll in 2015. Without that requirement, Pollack said, “much greater attention can be given to people who remain uninsured and have not been enrolled.”