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Insurers urged to extend policies past year's end

Lawmakers are stepping up pressure on behalf of consumers whose coverage is being canceled as insurance companies address Obamacare's implementation.

By Money Staff Nov 6, 2013 2:01PM

This post comes from Timothy W. Martin and Louise Radnofsky at partner site The Wall Street Journal.


The Wall Street Journal on MSN MoneyFederal lawmakers and state officials are stepping up pressure on insurers to allow consumers whose coverage has been canceled in response to the health overhaul to keep their policies beyond the end of the year.


Insurance Policy © Don Carstens/Brand X Pictures/JupiterimagesOn Tuesday, one of the largest regional health plans in the nation, Blue Shield of California, said it would relax its stance on terminated policies for about 115,000 people after state regulators demanded it do so. Customers now will have until March to decide which plan to choose for 2014, a three-month extension. Because the newer plans generally cost more, the extension could save residents as much as $28.6 million on premiums, said Dave Jones, California's insurance commissioner.


"For 115,000 people, they get additional time to decide what's best for them and their families," he told reporters Tuesday. The California Department of Insurance is reviewing termination letters sent by other insurers in the state to decide whether other companies need to offer consumers similar extensions, Mr. Jones said.


The move by Mr. Jones, an elected Democrat, comes as some other Democrats are seeking ways to allow individual policyholders to keep their current health plans and to defuse the issue of canceled plans, which has become a headache for supporters of the law.


Cancellation letters are expected to be sent to as many as 10 million Americans who buy coverage directly from insurers, rather than through an employer or government program. While these individuals would have to buy new policies, regulators and lawmakers say the extensions would give them more time to shop for an affordable new plan—particularly because continuing problems with insurance exchange websites are preventing many of these consumers from finding new coverage.


Insurers are able to extend some current plans given grandfathered status, because they predate the health law's passage 31/2 years ago and weren't changed significantly since then. Also, many states allow people to keep their coverage until it expires, which for some could be as late as December 2014.


A Blue Shield spokesman said the three-month extension in California "is a bad idea for consumers." Some could have to pay a deductible twice next year, because they would be enrolled in separate plans for 2014, he added.


Vermont Gov. Peter Shumlin, a Democrat, said late last week that he had asked the state's two dominant carriers, Blue Cross and MVP Health Care, to allow customers to keep their plans through March 31. Carriers and state officials were hashing out the details of how to do that on Tuesday, officials said.


"I won't tolerate a situation where Vermonters go into the holiday season worried and confused by their health care options come Jan. 1. That is simply unacceptable," Mr. Shumlin said.


Under the health law, most new plans aimed at individuals must offer a broader array of benefits, such as maternity care or annual physicals. Many consumers who currently buy individual insurance policies are finding that these plans will cost them more money.


U.S. Sen. Mary Landrieu (D., La.) on Monday introduced a bill with Sen. Joe Manchin (D., W.Va.) that would allow insurers to continue to sell any plan offered in the individual market in 2013 in following years. The bill would also require carriers to inform consumers about any parts of their plan that didn't meet the benefits available in newer policies, and to explain to them their reasons if they did decide to cancel the plan.


White House spokesman Jay Carney, asked about Ms. Landrieu's bill Tuesday, said he hadn't seen her proposal, but in principle, allowing insurance companies to continue to offer "substandard" plans "undermines the fundamental promise of the Affordable Care Act, which is that everyone in America should have access to affordable, quality health care coverage." 

Republicans have already introduced similar legislation in the House and in the Senate. A bill from House Energy and Commerce Committee chairman Fred Upton would allow health-insurance issuers to continue to sell all policies on the market in 2013 next year if they want to, regardless of any provisions of the federal health law.


The White House said Tuesday that the president's chief of staff, Denis McDonough, met again with large insurers' CEOs, and discussed cancellation notices as well as the carriers' concerns about technical problems in the insurance marketplaces and broader worries that only sick people are signing up for coverage.


It isn't clear how many other states could demand that insurers allow consumers to stay on plans that expire at year-end. California is one of only a handful of states requiring that by Jan. 1 all health plans sold to individuals, by insurers participating on its exchange, comply with the health law, including those policies that might have expired next year. Most states already allow consumers to stay on their current plans until those plans expire, even if that is in 2014.


As many as 10 million Americans who buy coverage directly from insurers are expected to have their health plans terminated effective Jan. 1 or after. Many of them are self-employed, earlier retirees or young adults in between jobs that provide insurance.


Angered consumers are taking legal action over being dropped. On Monday, two California residents filed a lawsuit in a Los Angeles state court against Anthem Blue Cross, operated by WellPoint Inc., alleging that the insurer misled them into altering individual policies that led to them being canceled this year. In one case, a woman in her 60s upped her deductible, by $1,000, to $6,000 in return for lower monthly payments. In another, a health plan was upgraded to include more robust coverage.


"This was an orchestrated effort by Anthem Blue Cross to get as many people off of these grandfathered plans as possible," said William Shernoff, a Claremont, Calif., lawyer representing both plaintiffs. A WellPoint spokeswoman declined to comment, citing the pending litigation.


Some consumers in California covered by insurers other than Blue Shield hope their carriers give them more time. Steve Duchesne, a 48-year-old from Redondo Beach, received a cancellation letter over the weekend from Anthem Blue Cross, saying his monthly payments for his family of five would jump 50% to more than $1,000.


"It should be extended to the rest of us, since the open-enrollment period runs through March 31. It's a simple matter of fairness," said Mr. Duchesne, who owns a public-relations firm.


More from The Wall Street Journal:


Nov 6, 2013 3:40PM
The Deadline shouldn't be extended but the individuals that already have a crappy plan they like should be able to keep it. Those that have Doctors they like, they should be able to make sure they can keep them also. The only thing the ACA should mandate concerning those policyholders, whether or not the actual Plan is Legit. If the plan isn't an those folks want to keep those plans, don't ask for any assistance.

Pretty much any President, regardless of Party, will do somethings that get on your nerves. Obama is no different. I will say it again, Obama never should have stated you can keep your plan when clearly he likely knew different. That's inexcusable.

It's also inexcusable to give Republicans a Free pass nor the Insurance Industry. Both have waited with Baited Breath to make Health-Care less accessible and less affordable. We the People can't allow either Obama, Republicans, nor the Health-Care Industry to continually play the American people. We can do better, and we must do better.

Nov 6, 2013 2:58PM
The deadline for all individuals and businesses should be extended until 2015. This would give them time to fix the website and allow people to have time to compare different plans.
Nov 6, 2013 4:23PM
How can they extend the policies if obocare says they don't qualify? More twisting the rules to favor obo?
Nov 6, 2013 2:43PM
More total dishonesty going on here. KommieKare automatically overrules ALL state regulation and law. What is really going on here is that the insurance company was extorted into GIVING a KommieKare-compliant plan at the OLD rate until March 2014 to those who were cancelled.

The "newer plans" "saving" money is the give-away. The savings is obviously how much more KommieKare-compliant plans cost compared to the cancelled plans. Plans aren't being "extended" at all. Nothing more than fascist extortion going on here.

It's too bad the national news services report this nonsense as fact, namely that plans are being "extended", when in fact that's not what is going on at all.
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