Reversal on Insurance Gets Mixed Response
RALEIGH, N.C. – A month after President Barack Obama announced people could keep insurance policies slated for cancellation under the federal health overhaul, the reversal has gotten a mixed response from insurers, state regulators and consumers.
Many consumers complained in October and November after insurers notified them that their individual policies were being canceled because they did not cover pre-existing conditions, hospitalization, prescription drugs or seven other basic benefits required under the law. In pitching the overhaul, Obama had long promised that people who liked their policies could keep them.
Then Obama announced Nov. 14 that companies could continue existing policies that don’t meet the minimum requirements if state regulators approved.
Older policies are being allowed to continue in 36 states, either because officials allowed it after Obama’s announcement, decided not to intervene in any way or had made a decision earlier in the year to extend non-compliant policies for a period of time.
Even so, insurers were given a choice of whether to continue the policies, and some declined to do so.
In Kentucky, insurers Humana, United Healthcare and Assurant chose to extend old policies while Anthem and Bluegrass Family Health opted against it. Seven companies in South Carolina are extending individual plans the federal law considers substandard, while six companies are extending plans in the small group market. Twenty are not participating.
In North Carolina, only Blue Cross and Blue Shield, which controls about 80 percent of the state’s market for individual and small-business policies, offered to renew plans covering 474,000 people that had been slated for cancellation. North Carolina’s insurance commissioner allowed the company to raise premiums by between 16 percent and 24 percent.
Prices on non-compliant policies are rising in other states, as well.
Anthem Blue Cross in Maine plans to raise premiums by an average of 12 percent on its no-longer-canceled policies.
The Blue Cross provider in neighboring New Hampshire expects an average 7 percent increase, an amount that is in line with previous years’ premium increases. Blue Cross Blue Shield of Illinois said it would seek undefined price changes.
Raleigh attorney Jeff Poley, 42, says he is fine with paying more for his current policy, considering what it would have cost him to switch to a new one. He has been covered with a high-deductible health policy from Blue Cross for the past two years, which currently costs $137 a month. The plan does not cover maternity and some other benefits required under the Affordable Care Act.
When he initially received a cancellation notice, Blue Cross said the closest plan that met all of the new federal requirements would cost nearly twice as much.
But after Obama’s announcement, Blue Cross offered to extend Poley’s old plan for another year at $170 a month. His wife is covered by a policy through her law firm.
“I was glad for the one-year reprieve, but I would still like a permanent fix because I don’t need abortion coverage, I don’t need maternity coverage,” said Poley, who said he exercises vigorously about six days a week. “We as a family had made that choice, and we are two intelligent people who know better what’s good for our family than the government does.”
About 15 million Americans buy policies as individuals, according to Families USA, an advocacy organization that backs health reform.