Obamacare 2.0: Open enrollment starts Saturday

Obamacare 2.0: What you need to know
Obamacare 2.0: What you need to know   

After a spectacularly botched launch last year that not even Obamacare's biggest foes predicted, open enrollment in the still-new health insurance system resumes Saturday, with several changes that have advocates both hopeful and worried.

New on deck this second Obamacare season: a three-month, instead of 6½-month sign-up window; automatic re-enrollment for most current customers; easier online price comparisons for plans on HealthCare.gov; and significantly higher tax penalties if you fail to have health insurance in 2015.

Premium prices for plans sold on Obamacare exchanges are set to rise, on average, just modestly over last year's prices, according to data released Friday by the federal government. Analysis of that data by the consultancy Avalere Health showed that average prices for the lowest cost, most popular types of plans for a hypothetical 50-year-old nonsmoker grew by 4 percent or less in the states served by HealthCare.gov.

And more insurers are selling plans this season, indicating growing confidence in the exchanges among those companies.

HealthCare.gov website seen on Nov. 12, 2014.
Adam Jeffery | CNBC
HealthCare.gov website seen on Nov. 12, 2014.

"Whether consumers visit the simpler, faster and more intuitive HealthCare.gov or contact the call center, they're going to find more choices and competitive prices," said U.S. Health and Human Services Secretary Sylvia Mathews Burwell.

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But there's another difference this year: No more "low-hanging fruit" from customers eager to buy health insurance after being effectively locked out of the market, or by people looking to replace their old plans that were not compliant with new Affordable Care Act standards.

Key dates for consumers to keep in mind

November 15, 2014 Second open enrollment period begins
December 15, 2014 Consumers must select plan for coverage to begin by January 1, 2015. Currently enrolled consumers must renew coverage and application for financial assistance or current coverage and advance premium tax credits will be automatically renewed for January 1 in most cases
February 15, 2015 Last day of second open enrollment period. Consumers who select plan on this date will have new coverage take effect by March 1, 2015
April 15, 2015 All individuals who file taxes must indicate coverage in 2014 or face a tax penalty; all individuals who received advance premium tax credits in 2014 must file federal income tax return and reconcile tax credit amount
Source: Kaiser Family Foundation

Everyone selling or promoting Obamacare insurance agrees the remaining pool of 32 million or so uninsured Americans will be tougher to sign up because of issues such as language barriers, lack of knowledge about insurance and the financial assistance available to buy it, or other reasons.

"We know that this enrollment period presents some new and differed challenges," said Anne Filipic, president of the leading Obamacare sign-up advocacy group Enroll America. "There's no doubt that we will need to work harder and smarter to reach the uninsured."

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"Another challenge ... we need to make sure that people who got coverage in the previous enrollment period maintain that coverage," Filipic said. "We're not expecting this to be a walk in the park, but we are confident."

Outreach money cut

Enroll America got $20 million in funding to do outreach this enrollment season, $7 million less than last year, when Obamacare was generating much more interest in the general media. But the group has 4,000 more volunteers and is more focused on promoting in-person assistance because of data showing people that got that help were much more likely to sign up last year.

Obamacare advocates got some potentially good news this week when the Gallup polling organization released a survey Thursday showing that 55 percent of the currently uninsured plan to get health coverage this year. On Friday, Gallup released another poll showing that more than 7 in 10 people who bought health plans from an Obamacare exchange in 2014 rated that coverage and health care as "excellent" or "good," with about the same number saying they plan on re-enrolling in their current exchange plan.

Gruber's careless remarks
Gruber's careless remarks   

But Gallup also said that almost 30 percent of uninsured respondents were unaware they must have insurance or pay a fine, which will be up to 2 percent of their adjusted gross income next year, double this year's penalty. And 46 percent of the uninsured were "not familiar at all" with the Obamacare exchanges, which is the only place they can buy coverage with financial assistance in the form of federal subsidies.

Those statistics underscore some of the challenges of boosting enrollment significantly in Obamacare's second year.

By the close of the first enrollment season in mid-April, more than 8 million people enrolled in individual Obamacare plans sold on both the federally run online marketplace HealthCare.gov and on the 15 other exchanges run by the District of Columbia and individuals states. That tally was seen as a success, because HealthCare.gov had been crippled for its first two months of operation after it launched Oct. 1, 2013, by a technological train wreck that left it unable to enroll many people. Only a huge, round-the-clock repair effort got that site on track in December.

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Total enrollment since has drifted down to about 7.1 million currently, as people either stopped paying premiums, got covered outside the exchanges, or other reasons. Earlier this week, the Obama administration announced it was projecting that only an additional 2 million people will be enrolled in Obamacare plans by the end of 2015. That 9.1 million total customer target is significantly less than the 13 million that the Congressional Budget Office has projected for 2015.

Ken Fasola, CEO of the Web-based insurance brokerage HealthMarkets, said he and others at the company were surprised to hear the lowered expectations from the administration.

"We're a lot more optimistic than we were last year," Fasola said.

That's because even before HealthMarkets has begun advertising this season about Obamacare plans, the company was getting a significant number of calls from people asking about those plans.

"We're already close to 1,000 appointments a day" with such people, Fasola said. "We've added capacity to our call center because we think the volume is going to be up."

Last Obamacare open-enrollment season, HealthMarkets sold about 100,000 plans.

"This year, we expect to do a lot more than that," Fasola said. "Our current call volume suggests we're going to be very busy on Saturday."

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Fasola was previously a top executive at UnitedHealthcare, the biggest insurer in the U.S. Last season, UnitedHealthcare took a pointedly cautious approach to Obamacare, selling plans in just five states. This year, the insurance giant will sell plans in 23 states, including ones served by HealthCare.gov. Overall, there are 77 new insurers selling Obamacare plans, a 25 percent increase.

It's not just big insurers or new entrants that are bullish on selling Obamacare plans. In Connecticut, the small, nonprofit insurer HealthyCT is expanding its plans offered on the state-run exchange there from just eight plans to about two dozen.

"We think it's just a great opportunity for us," said Ken Lalime, CEO of HealthyCT, which last season became the first new health insurer in a quarter-century in Connecticut, a state dominated by giants such as Aetna, Cigna and Anthem.

In addition to new plans, HealthyCT has cut prices, with an overall 8.5 percent reduction in premiums over last year. Lalime said he's hoping those "extremely competitive" prices, coupled with expanded networks of health providers for those plans, will boost his company's market share from just 3 percent his year to a bit more in 2015.

HealthyCT also has contracted with a new broker that has entered Connecticut, Regions Health, which has opened storefronts in four major cities, Hartford, New Haven, Waterbury and Bridgeport. Lalime said that the broker is banking on "foot traffic" generating enough business to sustain operations there.

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"I think being in a storefront is the way to go," said Lalime.

Changes online

But online, there have been changes to stave off the technological disaster that occurred in the first months of enrollment last year that left most people unable to sign up for coverage.

"For most consumers who are renewing coverage, up to 90 percent of their application will be prefilled based on last year's application," the Health and Human Services Department said. "And a new streamlined application reduces the number of screens to 16 with fewer clicks to navigate through the questions for most consumers signing up for the first time. Last year, consumers went through 76 screens to sign up for coverage. This year, along with a simpler, faster application, consumers can shop and enroll on a smartphone, tablet, computer, or by calling the call center or with in-person assistance."

Urging enrollees to review plans

Most people currently in HealthCare.gov plans, which were sold in 36 states, will be automatically re-enrolled unless they make a switch, such as choosing another plan sold on the exchange.

HHS and Obamacare advocates have been repeatedly urging current customers to not assume that their current plan will be the one that best fits their needs or pocketbook for 2015. That is particularly true because about 85 percent of customers receive subsidies to help buy insurance, subsidies which can dramatically reduce the actual amount of money people have to pay for coverage. Those subsidies are determined by a complicated formula that is tied to the price of the second-least expensive "silver" plan sold in a person's area on the exchange. Silver plans cover about 70 percent of health costs.

A change in the benchmark plan's price can affect the amount of subsidies that people receive for their own plans—even if a person's income doesn't change.

"What's really important is for consumers to go back online to the marketplace, or talk to a broker or an assister, and see how this affects you," said Cynthia Cox, an analyst as the Kaiser Family Foundation.

On Friday afternoon, the federal government released data files showing all Obamacare plan rates, and out-of-pocket cost limits.

"Today's data provide further evidence that the Affordable Care Act is working to improve competition and choice among marketplace plans in 2015," said Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner. "Consumers should shop around, with new options available this year they're likely to find a better deal."

CMS said that the data show "that new, lower-cost plans are available this year and premiums are remaining stable." However, CMS did not release an analysis about how prices have changed, on average, from 2014's prices, and it doesn't reflect the impact of subsidies.

In addition, subsidies offered by HealthCare.gov are being threatened by a legal challenge that the Supreme Court will hear in the coming months. Plaintiffs in that case claim the subsidies are illegal because of the argument that the ACA only allows customers of state-run exchanges to receive financial aid, not those who buy insurance from the federal exchange.

For now, the subsidies remain available to people nationwide, if they have low or moderate incomes. The Obama administration is contesting the Supreme Court challenge.