When the health insurance marketplaces open on Sunday, consumers shopping for
2016 coverage may encounter steeper premium increases than last year and more
plans that offer no out-of-network coverage.
According to an analysis released Monday evening by the Health and Human
Services Department, the cost of the second-lowest silver plan in states using
the federal marketplace will rise an average of 7.5 percent for 2016 coverage.
Silver plans are the most popular type of marketplace plan. They pay 70 percent
of medical costs, on average, leaving consumers to cover 30 percent. And premium
tax credits that are available to people with incomes up to 400 percent of the
federal poverty level — about $47,000 for one person — are benchmarked to the
second-cheapest silver plan.
But the overall increase doesn’t tell the whole story for those shopping for
insurance in the individual market — generally people who don’t get coverage
through their work. Depending on the market, consumers may see larger or smaller
increases or even declines in premiums. Premium changes for the second-lowest
cost silver plan ranged from a 13 percent average decrease in Indiana to a 36
percent average increase in Oklahoma.
The consulting firm McKinsey & Company earlier had analyzed premiums reported in 26 states and found that in
more than half of the rating areas in those states there will be a new
insurer offering the lowest-cost silver plan next year.
“It’s indicative of the price jockeying that’s still going on in the market,”
says Erica Coe, co-leader of McKinsey’s Center for U.S. Health System Reform.
“If consumers want to have the lowest cost silver plan, they’ll have to
shop.”
The open enrollment season for marketplace coverage runs from Nov. 1 through Jan. 31. People who want coverage to begin on
Jan. 1 must buy a plan by Dec. 15.
Although most consumers zero in on premiums when comparing plans, next year
it could be especially important to pay attention to the network of doctors and
hospitals that are part of the plans that they’re considering. There will likely
be fewer plans that cover broad networks of providers, says Kathy Hempstead, who
directs health insurance coverage issues for the Robert Wood Johnson Foundation.
In addition, a growing number of marketplace plans will cover only doctors or
hospitals in their provider networks.
“The PPO and POS categories are definitely shrinking,” Hempstead says,
referring to preferred provider organization and point of service plans, both of
which typically offer coverage of out-of-network providers, although consumers
generally have to pay a larger share of the cost. Instead, consumers may see
more health maintenance organizations that don’t provide any out-of-network
coverage.
Despite the well-publicized demise of nine health insurance co-operatives and
other insurer exits, carriers moving into new markets next year will likely
offset the declines. The number of carriers selling plans should be essentially
unchanged at roughly 327 next year, according to McKinsey data based on 42
states.
This year, consumers in most states will have access to online tools to use
while shopping for plans. Healthcare.gov unveiled its 2016 plans Sunday on the
website, allowing customers in the two-thirds of states that use that federal
marketplace to browse through plans in their area to see premium prices ahead of
the actual start of enrollment. The revamped site also offered consumers a cost
estimator to help determine their likely out-of-pocket costs in the plans. Two
other new tools touted by federal officials to allow consumers to type in their
doctors’ names or medication details and see whether they’re included in various
plans are not yet ready to roll out. Federal officials said they hope to have
them online soon, although they could not say if the tools would be ready by
Nov. 1.
Some state-based marketplaces have similar tools available.
Although the online tools may streamline the process of comparing plans,
consumers should always confirm details about doctors, hospitals and medications
they receive online with the health plan directly.
Consumers who want telephone or in-person help choosing a plan can locate
assistance on the state or federal marketplace websites. In addition, Enroll
America, a consumer group that focuses on health insurance enrollment, connects
people with local help through its website.
Even though shopping for plans should be easier this fall and it’s in
consumers’ best interest to check out their options, chances are many won’t.
People who don’t renew their federal marketplace coverage will generally be
automatically re-enrolled for Jan. 1 in their current plan, or a similar one if
their plan has been discontinued. The government will incorporate the most
up-to-date income, benchmark premium and poverty data when calculating the subsidy for auto-renewal.
That’s different from the past. When people didn’t update their income or
other information for 2015 plans, they were automatically assigned the same
premium tax credit amount they received in 2014.
Consumers who are automatically re-enrolled can change their plan until the
end of January. But that may not be the best move, says Judith Solomon, vice
president for health policy at the Center on Budget and Policy Priorities.
“You’ll start your deductible all over again,” she says.