CMS Considers Changes to Automatic Re-Enrollment in Health Insurance Marketplace Plans

On Friday, Jan. 31, the Centers for Medicare and Medicaid Services (CMS) issued the proposed annual Notice of Benefit and Payment Parameters rule for 2021. The proposed rule includes various provisions that would change Health Insurance Marketplace plan standards. Our focus here is the proposed changes to the automatic re-enrollment process.

Currently, marketplace enrollees can be automatically re-enrolled in their current plan if they take no action. Benefits of automatic re-enrollment include reduced administrative expenses, consumer convenience, stabilization of the insurance risk pool due to retention of healthier enrollees, and coverage continuity.

CMS proposes to modify the automatic re-enrollment process for low-income enrollees who receive subsidies that cover their entire plan premium. The change would require these enrollees to actively re-enroll or be automatically re-enrolled in the same plan but without subsidies.

CMS believes this change will incentivize enrollees to return to the marketplace during open enrollment to update their contact and income information, with a goal of reducing subsidy expenditures based on dated and potentially incorrect enrollee information. CMS specifically requests feedback on whether to adopt the approach only for marketplaces that use the federal platform, like Arkansas, or also marketplaces that operate their own eligibility and enrollment platforms.

During the open enrollment period for 2019 coverage, 19,665 people in Arkansas were automatically re-enrolled in coverage. A subset of this number may have zero-dollar premiums and could be affected by this approach should they not actively select a plan in future open enrollment periods.

CMS has provided a fact sheet on the proposed rule.