WASHINGTON — The federal government will choose health plans for hundreds of thousands of consumers whose insurers have left the Affordable Care Act marketplace unless those people opt out of the law's exchanges or select plans on their own, under a new policy to make sure consumers maintain coverage in 2017.
That may make for a jarring start to the health law's fourth annual open enrollment period, which starts Nov. 1, a week before Election Day, and runs through Jan. 31. While the administration says 20 million people have gained insurance through President Barack Obama's signature health law, it has suffered setbacks: Nonprofit health insurance co-ops created by the law have shut down; major health insurers have withdrawn from its marketplaces; and the ones that remain have raised premiums sharply.
Now, as the administration struggles to adjust to those changes, consumers may be surprised to learn that they have been placed in a health plan offered by a different insurance company, which is likely to have different doctors, benefits and drugs that are covered.
Consumers in discontinued plans will often receive a welcome kit from the new company, with a bill for the January 2017 premium.
"Without health coverage or an exemption," the discontinuation notice says, "you may have to pay a penalty of $695 or more when you file your taxes."
Assigning consumers to alternate plans, the Obama administration says, will protect them from coverage lapses. And, it notes, consumers are free to choose another plan if they do not like the one chosen for them. But the alternatives may be limited.
For example, UnitedHealth, one of the nation's largest insurers, is pulling back from Affordable Care Act marketplaces, saying it has lost hundreds of millions of dollars.
Ben Wakana, a spokesman for the Department of Health and Human Services, said consumers would not be enrolled in any plans without their consent since they would generally have to pay the first month's premium to activate coverage.
Federal officials say consumers should actively shop for a plan in the marketplace and update their income information so subsidies can be properly calculated. In the last open enrollment period, they said, 43 percent of consumers returning to HealthCare.gov switched plans.