Wed, Oct 01 2014
Thousands of consumers who were granted a reprieve to keep insurance plans that don’t meet the federal health law’s standards are now learning those plans will be discontinued at year’s end, and they’ll have to choose a new policy, which may cost more.
Cancellations are in the mail to customers from Texas to Alaska in markets where insurers say the policies no longer make business sense. In some states, such as Maryland and Virginia, rules call for the plans’ discontinuations, but in many, federal rules allow the policies to continue into 2017.
Insurers sending the notices to some customers include Anthem, one of the largest insurers in the country, Baltimore-based CareFirst, Health Care Services Corporation in Chicago, Kaiser Permanente in Oakland, Calif., Humana in Louisville, Ky., and Golden Rule, an Indianapolis subsidiary of UnitedHealth Group.
One reason behind the switch is that insurers determined they can make more money selling plans that comply with the Affordable Care Act, often at higher premiums that may be subsidized by the government.
“They’re getting a lot more revenue, often for the same person,” said consultant Robert Laszewski, a former insurance executive.
Last year, similar cancellation letters sent to more than 2 million customers created a political firestorm for President Barack Obama, who had repeatedly promised that “if you like the plan you have, you can keep it.”
In response, the administration encouraged states to allow insurers to extend existing plans, even if they didn’t meet the health law’s standards. Both states and insurers had to agree to the deadline extension and not all did.
It is unclear how many consumers might be affected by the latest round of cancellations, happening in the weeks leading up to Election Day, which could play into the hands of the law’s critics.
Still, experts anticipate less of a backlash this time, noting that the furor last year came amid the disastrous rollout of the federal health insurance website, while this year’s enrollment is expected to be smoother. In addition, fewer people will be affected.
“We all knew this day was coming that insurance companies would transfer to plans that were fully compliant with ACA,” said Carmen Balber of Consumer Watchdog, a Santa Monica, Calif.-based advocacy group. “That’s a good thing. We supported the delay a year ago because consumers didn’t have the time or ability to appropriately shop for plans … But it’s time.”
Policyholders will have the choice to switch to different coverage from the same insurer, or buy from another one during open enrollment, which begins Nov. 15.
“Consumers whose private insurers choose to discontinue their plans may have access to better options through the health insurance marketplace … [including] the opportunity to qualify for financial assistance to help them afford premiums, and improved consumer protections,” said Ben Wakana, a spokesman for the Health and Human Services Department.
source : Canceled Health Plans: Round Two
