Joel Ario, managing director at Manatt Health Solutions and former director of the Office of Health Insurance Exchanges at HHS, said the decision is important because consumer research shows that most individuals won't take action on their own initiative and therefore would be likely to let policies lapse. "I think it's critical that if somebody's already gone through the process and gotten enrolled that they can stay in coverage in as many cases as possible," Ario said.
The rules were drafted in consultation with the National Association of Insurance Commissioners and other interested parties. HHS will be taking comments for 30 days before issuing a final rule.
Joe Antos, a healthcare policy expert at the conservative American Enterprise Institute, says that insurers will likely be cheering the decision because it will reduce their administrative burdens and make it easier to hold on to customers. "This helps the actuaries and the insurance companies," he said. "Finally there's a little stability in a completely chaotic program."
But Antos also points out another consequence of the automatic renewal process: it solidifies market-share trends that emerged in the first year of enrollment. That's good news for insurers that saw strong enrollment, but a potential problem for those plans that struggled to gain customers or are planning to compete on the exchanges in 2015 for the first time.
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