A new Brookings Institution analysis looks at what would be necessary for an auto-enrollment feature to become part of America's health insurance system. Auto-enrollment, which is sometimes used for employee retirement plans, is a mechanism that provides coverage for an individual if the individual does not choose their own plan.

The analysis notes that auto-enrollment could be a way to increase coverage for Americans and reduce premium costs as the insurance pool gains more premium-paying individuals.

“Policies that help the uninsured gain coverage are likely to improve access to care and financial protection for those individuals, reduce uncompensated care burdens for providers, and, because the remaining uninsured are relatively younger and healthier than the population as a whole, lower overall per-capita premiums” writes Christen Linke Young, the study's author. “Auto-enrollment has been embraced by health policy experts across the political spectrum, but it is fraught with policy and operational challenges.”

An auto-enrollment system could affect individuals on employer-sponsored plans, as well as those on plans offered under the Affordable Care Act. Some groups, such as the American College of Physicians, have suggested auto-enrollment could be an alternative to the ACA's individual mandate, which was ended under 2018's tax reform law.

Four big challenges

Enacting an auto enrollment system would face four major problems: getting eligibility information from enrollees; finding a way to collect premiums; determining which plan auto-enrolled individuals would be placed in; and managing mistakes—cases where individuals are enrolled or not enrolled in error.

The paper notes that these problems are difficult to solve under current law. “Existing coverage programs have a patchwork of eligibility rules, and determining what program a person is eligible for requires a great deal of information—about income, family composition, and employer health plan, if any—that is not always available in government datasets,” Young notes. The many different plan options in different geographic markets also adds to complexity of the problem.

Three possible solutions

Young suggests three approaches to address the challenges of auto-enrollment:

A retroactive “backstop” approach, where consumers would be retroactively put in a backstop plan at tax time, to cover any period of uninsurance during the last tax year. “At tax filing, individuals covered by the backstop would be retroactively charged a premium for the plan,” the report said. “This premium would be charged regardless of whether or not the individual used health care services in their months of backstop coverage, and would be income-adjusted to mirror Marketplace financial assistance.”

Assessment and outreach after tax filing is another option. If individuals indicate they are not covered when they file their taxes, the system would take steps to encourage enrollment. The author notes that this approach would be less effective than a truly automatic enrollment.

The third approach is also limited: it would call for specific populations to be targeted during transitions—for example if a person applies for unemployment after leaving a job.

Unemployment insurance applicants could be asked questions to determine their coverage eligibility, and if uninsured they could be directly enrolled into coverage–with premiums automatically deducted from their UI benefits,” Young writes. “These are limited-scope activities and not a population-wide approach to enrollment, but they could still bring new people into coverage.”

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