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ACA renewals will be easier under proposed rules

Most Americans enrolled in private health insurance through the new Affordable Care Act exchanges will be able to renew their coverage automatically next year under rules proposed by the U.S. government.

About 8 million people signed up for private plans using the exchanges, including 5.4 million who used the federal healthcare.gov system. The rules released Thursday will ensure that most of those customers are able to effortlessly remain covered, as is common in employer-sponsored health plans.

Insurers and consumer advocates have been concerned the new rules may make renewals too complicated or force millions of people back to government websites. Under the proposal, 95 percent of customers who purchased plans through the federal website will be automatically renewed, unless they seek changes in their policy or their subsidies, according to the Department of Health and Human Services.

“A key lesson from public health programs is that far too much ‘churning’ takes place, with people frequently gaining and losing insurance,” Ron Pollack, executive director of Families USA, a consumer advocacy group in Washington, D.C., said in a statement. “The Affordable Care Act can fix this problem by ensuring effective notification of renewal requirements and by simplifying re-application systems.”

Under the renewal process, people receiving subsidies this year for their monthly premiums will get the same subsidy next year unless they decide to recalculate the discount.

In many cases, it may be more advantageous for customers to recalculate their subsidies in order to keep up with increases in their insurance premiums. That will require using healthcare.gov, federal call centers, or an insurance broker or application counselor, according to HHS.

About 87 percent of customers who purchased plans from the federal exchange created under the Patient Protection and Affordable Care Act received premium subsidies, in the form of a tax credit. The subsidy reduced their monthly premiums about 76 percent, on average, to $82, according to a June 18 report by HHS.

In most cases, the size of the subsidy was based on customers’ incomes in 2012, the most recently available tax return when they applied for coverage.

Under an earlier renewal process the government outlined in 2012, the federal exchange would have automatically recalculated subsides based on customers’ 2013 tax returns and sent a notice informing them of their new discount and premium. While the federal exchange still monitors changes in income reported to the Internal Revenue Service, it won’t automatically recalculate subsidies under the new process.

Fourteen states that run their own exchanges can use the federal renewal guidelines or write their own, subject to federal approval. States may also use the older renewal process.

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