Changes may be coming for those with cancelled health insurance policies
On November 14, 2013, President Obama announced that, ”insurers can extend current plans that would otherwise be canceled into 2014, and Americans whose plans have been canceled can choose to re-enroll in the same kind of plan” (The White House Blog). However, it was left up to the state insurance commissioners and insurers to decide if they were going to allow old policies to be renewed for the 2014 year. According to the President, “insurance commissioners still have the power to decide what plans can and can’t be sold in their states.”
It wasn’t long after the President’s statement that state Insurance Commissioners began to respond:
Washington state Insurance Commissioner, Mike Kreidler, announced that he will not be allowing insurance companies to extend current plans,“I understand that many people are upset by the notices they have recently received from their health plans and they may not need the new benefits today. But I have serious concerns about how President Obama’s proposal would be implemented and more significantly, its potential impact on the overall stability of our health insurance market.” The Commissioner went on to say, “I do not believe his proposal is a good deal for the state of Washington. In the interest of keeping the consumer protections we have enacted and ensuring that we keep health insurance costs down for all consumers, we are staying the course. We will not be allowing insurance companies to extend their policies. I believe this is in the best interest of the health insurance market in Washington.”
Arkansas Insurance Commissioner, Jay Bradford, also released a statement regarding the ACA announcement, “The Arkansas Insurance Department took steps on March 15, 2013, to provide carriers the option to extend current plans by issuing Bulletin 7-2013.” It seems the state had already found a way to avoid the cancellation issue as, “The majority of carriers writing individual health insurance policies in Arkansas have chosen to extend coverage through December 30, 2014. This action allowed Arkansans to keep their existing health insurance coverage through calendar year 2014.”
The Florida Office of Insurance Regulation and Commissioner, Kevin McCarty, released a statement very different from that of Washington state, “Most health insurers in Florida have already voluntarily extended coverage for affected policyholders through 2014. However, for those companies that did not, the Office pledges to work with any company that chooses to continue coverage in accordance with the President’s transitional policy, and to facilitate the continuation of coverage for Floridians.”
California Insurance Commissioner, Dave Jones, who recently worked with Anthem Blue Cross and Blue Shield of California to delay the cancellation of policies, backed the President with his statement which “requested that all California health insurers and HMOs provide current customers the option to renew their existing non-grandfathered policies for 2014 and issue new notices to policyholder advising them of their options.” Commissioner Jones stated that, “The President’s action today makes it crystal clear that health insurers and HMOs are not required by federal law to cancel existing policies.”
In other states, like Oregon, officials are considering their options and no decisions have been made. In Minnesota, Gov. Mark Dayton, officials from the state’s health exchange, MNsure, and the Commerce Department, are evaluating how Minnesota should move forward. “Our Department of Commerce and MNsure staff are presently analyzing the details of the president’s pronouncement and will have more detailed information later about its effect on Minnesotans,” Dayton said in a statement.
A statement from the National Association of Insurance Commissioners expresses concern with the decision to extend coverage, “We have been particularly concerned about the way the reforms would impact premiums, the solvency of insurance companies, and the overall health of the marketplace. The NAIC has been clear from the beginning that allowing insurers to have different rules for different policies would be detrimental to the overall market and result in higher premiums.” The NAIC also expressed concerns about uncertainties caused by the change, “it is unclear how, as a practical matter, the changes proposed today by the President can be put into effect. In many states, cancellation notices have already gone out to policyholders and rates and plans have already been approved for 2014. Changing the rules through administrative action at this late date creates uncertainty and may not address the underlying issues. We look forward to learning more details of this policy change and about how the administration proposes that regulators and insurers make this work for all consumers.”
As state’s begin to announce their plans for moving forward, the decision to extend current policies may not actually be left up to state insurance commissioners and insurers:
The President’s announcement came as Democrats, led by Senator Mary Landrieu of Louisiana, work on legislation to extend current coverage. “The president’s announcement was a great first step, and we will probably need legislation to make it stick,” said Landrieu, who has five co-sponsors, all Democrats.
On Friday November 15, the House approved legislation that would allow health insurance companies to continue to sell policies that do not comply with the ACA. The Upton bill, also known as the “Keep Your Health Plan Act,” was proposed by Rep. Fred Upton (R-Mich.). Thirty-nine Democrats joined with the Republican majority in support of the bill.
The beginning of open enrollment on October 1, 2013, was supposed to clear the confusion – now it seems we will just have to keep waiting.
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Jillian Carlile Research Analyst & Health Exchange know-it-all Strenuus firstname.lastname@example.org
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