How to Make Health Care Coverage Forget-Proof
By David Kendall
It happens to everyone. Both your kids get the flu. Your boss asks you to work extra shifts. You care for your aging mother so she can stay in her own home. Life gets in the way, but when that prevents someone from signing up for health care coverage, it carries real repercussions for them and their family. This problem affects millions of people. In fact, six of every 10 people without health care coverage in America are eligible for free coverage or subsidies that make coverage affordable — if they would just sign up.
Luckily, there’s a fairly simple solution to this big problem: automatic enrollment for people who forget to sign up for coverage. Representative Ami Bera (D-CA) has introduced legislation to do just that — it lets states use automatic enrollment for Medicaid and the Affordable Care Act’s (ACA) exchanges. Bera’s proposal would start with people who are eligible for coverage and do not have to pay any premium. It would provide grants to states to set up auto-enrollment, and it would give states access to information to determine who is eligible for coverage. People enrolled automatically would receive a notice of the enrollment and would have 60 days to decline the coverage.
Six of every 10 people without health care coverage in America are eligible for free coverage or subsidies that make coverage affordable.
The idea of auto-enrollment stems from behavioral science research about how people make choices. People favor a default choice over making their own choice, everything else being equal. When this idea was applied to people enrolling in retirement plans, the results were dramatic. In one study, an employer that automatically enrolled employees in a retirement policy with the option to opt-out saw 86% of employees stay in the retirement plan, but when employees had to sign themselves up, the number of employees participating was only 49%.
Setting good default choices is a widespread, standard practice in health. Enrollment in Medicare Part A for hospital care is automatic for those receiving Social Security benefits. Enrollment in Medicare Part D for prescription drug coverage is automatic for many low-income individuals. And re-enrollment for exchange health plans is automatic for those who don’t choose a new plan.
Setting up auto-enrollment for the ACA will of course take some work. Federal records of who is eligible will need to be reliable enough to use for auto-enrollment. States may need to improve the accuracy of basic information of enrollees. Small employers that do not provide coverage may want to participate in auto-enrollment for their employees. Rep. Bera’s legislation gives states the latitude to figure out these issues and what will work best.
Auto-enrollment will have two main benefits. It can ensure that Americans get access to high-quality care without fear of devastating financial losses. And it can help lower premiums for everyone.
Access to affordable, high quality care shouldn’t be something that we let anyone take for granted. Open enrollment in the exchanges comes once a year. It is far too easy to miss information about enrollment or to put off enrolling because of more pressing concerns. When someone doesn’t have coverage, they may find out they have cancer or face any number of other injuries or diseases. They will probably not be able to afford care, leaving them to choose between bankruptcy or severe health problems.
Auto-enrollment will also lower health insurance premiums for everyone by getting more healthy people enrolled. When you are healthy, getting coverage is naturally a lower priority than when you are sick. When fewer healthy people enroll in a health plan, the plan has less money available for people who are sick.
Finding new ways to get more healthy people to enroll is especially important following the GOP’s repeal of the individual mandate penalty, which imposed a fee for not enrolling in coverage. Auto-enrollment can help, although Congress also needs to take more immediate steps to stabilize the exchanges for 2019.
Democrats and willing Republicans in Congress can defend and extend the ACA by enacting provisions like auto-enrollment. The long-held progressive goal of universal coverage is within our grasp if we continue to build upon the foundation that our current programs provide.
David B. Kendall is the senior fellow for health and fiscal policy at Third Way.