Rewind on ACA: If You Like Your Current Health Plan, You Can Keep It For Now – If The Insurance Company Lets You

By: Laura Miller Andrew

Today, President Obama announced that individuals and small businesses who currently have health insurance policies that do not meet the requirements of the Affordable Care Act that have received or will be receiving cancellation notices because of ACA requirements, can renew the policies for another year if they meet certain conditions. The coverage had to be in effect on October 1, 2013 and the health insurance issuer must send a notice to all individuals and small businesses that received (or are scheduled to receive) a cancellation or termination notice. This notice must include specific information including: (1)  any changes in the insurance policy, (2)  which ACA mandates are not included in the policy, (3) information about the right to enroll in an ACA compliant policy through the Health Insurance Marketplace (including possible subsidies), (4) how to access a policy in the Marketplace, and (5) information about the right to enroll in health insurance coverage outside of a Marketplace that is ACA compliant.

The Letter to State Insurance Commissioners about this change was released after President Obama’s comments and encourages the states to allow insurance companies to provide this transitional relief to individual and small group market policyholders. The big unanswered question is whether this announcement will change anything. As stated by Karen Ignagni  of America’s Health Insurance Plans, “Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace. If due to these changes fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase in the marketplace and there will be fewer choices for consumers.” In “plain English”, this means that if only individuals who have more serious medical conditions and who need the broader coverage offered by the ACA enroll in the ACA and the young, healthy individuals choose to keep their current non-ACA policies, the cost of providing the ACA coverage could increase exponentially because of this “adverse selection.”

The possibly more serious issue is that the letter does not require state regulators to allow the current health policies to continue, nor does it require insurance companies to agree to continue to offer the policies.  Health insurance companies  have already sent letters to millions of individuals, canceling their policies. To “reverse course” may be difficult and cause a paperwork nightmare.  Also, for individuals who already selected new ACA compliance plans, will they get a second chance to keep their old policies? While the announcement and letter are politically expedient, it appears to shift the burden to the State Commissioners and the insurance companies to fulfill the promise made by President Obama.

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