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Administration Urges Comparison Shopping for Health Law Plans

By Rebecca Adams, CQ HealthBeat Associate Editor

December 4, 2014 -- More than 70 percent of people now enrolled in a health law marketplace plan could get cheaper monthly premiums by returning to the marketplace and picking a different plan, say Obama administration officials. But less than 6 percent of the 6.7 million current enrollees had renewed their coverage by Nov. 28, and those who don't switch in the next 11 days will be automatically renewed in their same plan for 2015.

Administration officials said recently that they did not know how many of the 397,870 people who renewed coverage by Nov. 28 chose different plans.

Consumers who have a silver plan, which pays for 70 percent of medical costs, could save an average of $492 per year by picking a different silver plan, according to a Department of Health and Human Services (HHS) report released last week.

And if consumers look at all of their options, in every tier of coverage, 79 percent of them could find a plan with a premium of less than $100 after tax credit subsidies, the report found in its data from 35 of the states that use

One reason why consumers should shop around is the value of subsidies is not going up as much as the cost of the cheapest plans in the silver tier of coverage. The value of subsidies is tied to the second-lowest cost silver plan in a market, and premiums for those plans are increasing by 2 percent on average, before tax credits. But the average premium cost for the cheapest silver plans are rising by 5 percent, according to the report.

If consumers don't switch and their plan premium cost goes up by the average amount, those people could find that their subsidy doesn't go as far.

"There are real financial consequences overall to people paying attention and switching and looking for the lowest cost plan in the type of policy that they're interested in having," said HHS Assistant Secretary for Planning and Evaluation Richard Frank on a call with reporters.

"That just underscores again the importance of people coming back," Kevin Counihan, the chief executive officer of the marketplace, told reporters.

Some states have much higher than average increases or decreases in premium costs.

The total savings in premiums if all current consumers switched to the cheapest plan available would be $2 billion, the report said. Frank said he didn't have data available on how much each consumer could save on average.

By historical averages, premiums for individual insurance are rising less than in the recent past, said Frank.

Administration officials are working to reach people in the short time that is left by mail, email and phone calls to warn them before they are auto-renewed into their current plan, or if that plan is not being offered again, a similar plan. CMS Principal Deputy Administrator Andy Slavitt said that many customers will be contacted at least three times and some as many as a dozen times.

Counihan said that the marketplace is far easier to use this year than last year and he believes the administration is off to a good start.

"We're where we want to be at this point in our implementation," he said.

Rebecca Adams can be reached at [email protected].

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