States, Insurers Calling Shots On Cancellation ‘Fix’

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FLORIDA ALLOWS RENEWAL OF CANCELED POLICIES

 EDITOR’S NOTE: This recent Commonwealth Fund blog post by Kevin Lucia, Katie Keith, and Sabrina Corlette of Georgetown University Health Policy Institute’s Center on Health Insurance Reforms looks at the individual state decisions so far on adopting President Obama’s proposed policy “fix” for those Americans whose health insurance was canceled, and what factors into those decisions. They point out that “throughout implementation of the ACA’s insurance market reforms, the rubber meets the road in the states,” and conclude, “Whether the policy fix meets its stated goals and allows consumers to keep their policies with minimal market disruption largely depends on the decisions—and legal authority—of state officials and whether insurers voluntarily decide to reissue canceled policies.”

COMMONWEALTHFUND.ORG — Under President Obama’s transitional policy fix for people whose health insurance plans were canceled, states and insurers are encouraged, but not required, to allow people to reenroll in and even renew these plans. This means that health plans that exist today, but do not comply with the Affordable Care Act’s new protections set to go into effect in 2014, could extend through 2015.

States and insurance companies are primarily responsible for executing the policy fix, which comes at a time when stakeholders have undertaken significant efforts to prepare for new changes beginning in 2014. Many of the states that have decided not to adopt the policy fix are those most invested in the success of the law.

In California, which is running their own state-based health insurance marketplace, officials declined to adopt the policy fix, citing concerns that included administrative obstacles, consumer confusion, and a potential increase in premiums in 2015.

In California, which is running their own state-based health insurance marketplace, officials declined to adopt president Obama’s proposed policy fix, citing concerns that included administrative obstacles, consumer confusion, and a potential increase in premiums in 2015.

State decisions on the policy fix. To date, states such as Alaska, Arkansas, California, Colorado, Connecticut, Indiana, Maryland, Massachusetts, Minnesota, Nebraska, New York, Oklahoma, Oregon, Rhode Island, Vermont, Virginia, Washington, and West Virginia, as well as Washington, D.C., have publicly announced that they will not implement the policy fix. Although some of these states are allowing insurers to reinstate canceled policies until December 31, 2013, insurers in these states will not be permitted to renew policies that do not comply with the Affordable Care Act after January 1, 2014.

Of these, the states running their own state-based health insurance marketplace were among the quickest to reach a decision. For the past three years, these states have overcome numerous challenges to build and launch a marketplace and have made critical policy decisions to ensure that their exchanges will thrive. In California, Minnesota, and Washington, for example, state officials declined to adopt the policy fix, citing concerns that included administrative obstacles, consumer confusion, and a potential increase in premiums in 2015.

Not all states are rejecting the president’s proposal, particularly those where the federal government is operating the exchange. To date, Delaware, Florida, Illinois, Michigan, Missouri, New Hampshire, North Carolina, North Dakota, Pennsylvania, South Carolina, Tennessee, and Wisconsin have made official statements that they intend to allow people with canceled policies to renew. Kentucky and Hawaii, both operating their own marketplaces, also adopted the fix. Both states had already allowed the early renewal of policies, which is consistent with the president’s fix. Media reports suggest that the same is true in Alabama, Kansas, Ohio, Texas, and Wyoming.

CLICK HERE to read the complete story on CommonwealthFund.org.

 


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