As The Policy Cancellation and Extension Saga Turns

At the conclusion of last week’s episode in the real-life drama of individual and small-group health insurance policy cancellations, President Obama had gone on television and announced that if insurance commissioners and individual carriers wanted to, it was fine by him if they simply extended non-PPACA compliant plan coverage in effect as of October 1, 2013, for another 12 months. The National Association of Health Underwriter’s (www.NAHU.org) began keeping an up-to-date chart on the decisions states and carriers made on the matter and our friends at America’s Health Insurance Plans (AHIP) got tricky and made a color-coded map. Meanwhile, the House of Representatives passed a bill that would allow insurers to keep selling new non-compliant plans in 2014 and insurance company CEOs were seen entering and exiting the White House looking confused and unhappy. Image

This week, the show has been no less exciting. It started with weekend drama when the DC Insurance Commissioner, William White, was fired over a press statement that essentially said as a former actuary he would give the president’s plan all due consideration, but in general it didn’t sound like the greatest idea. Then the president and his surrogates announced that they didn’t intend to give insurers much regulatory relief in implementing the plan, particularly with regard to their request for reinsurance help if the extension policy does indeed result in market instability and adverse selection. Senator Marco Rubio (R-FL) took this a step further and proposed a bill to eliminate the law’s risk sharing mechanisms, which are consumer and insurer funded means of helping to shore up insurers that absorb more than their fair share of unhealthy consumers due to the law’s guarantee issue and community rating provisions.  

After that, more and more states insurance commissioners began announcing their decisions and quite a few said no thank you. Among the naysayers was the Covered California board, even though the state’s insurance commissioner had previously been positive. To try and smooth things over, President Obama invited some of the insurance commissioners over to the White House for a chat. Some of the commissioners went to the West Wing for what has been described as an awkward meeting, but six prominent commissioners wrote him a very polite letter saying thanks, but we think its in the best interest of our states if we stay home.

Thereafter, Families USA came out with a study claiming the whole problem was a bit overblown. Late yesterday afternoon, HHS released a letter templatefor insurers to use with consumers who may be able to stay in extended policies and then today they told the world that the last day people have to buy coverage in 2013 for a January 1 effective date is really December 23, not the previously reported December 15. Insurers quickly responded that changing dates again at the last minute is problematic for all, especially considering the wonky enrollment system and also reminded the world that coverage won’t actually be in force on January 1 if the insurer doesn’t have their premium money in hand by then.

We are hoping that our lawmakers will air a rerun next week, since both Congress and your Washington Update authoresses plan on leaving town to celebrate Thanksgiving. But regardless if new drama occurs or we just see more of the same, we’ll include another thrilling plot synopsis of the cancellation and renewal saga in our upcoming blog posts…

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