Skip to main content
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Digital Health
    • Transformation
    • ESG
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • Newsletters
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Insurance
November 14, 2013 12:00 AM

Reform Update: White House move to limit insurance cancellations may backfire

Paul Demko
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Obama

    (Story updated at 7:00 p.m. ET.)

    Seeking to defuse a growing political furor as millions of Americans receive cancellation notices from health insurers, the Obama administration will not require insurance companies to upgrade existing individual plans to meet the requirements of the federal healthcare law for 2014.

    The announcement comes a day after the administration reported that just 106,000 Americans enrolled in private plans through the law's health insurance exchanges through Nov. 2. A number of Democrats have signaled they would support legislation to address the cancellations and the troubled rollout of the exchanges.

    “This fix won't solve every problem for every person, but it's going to help a lot of people,” President Barack Obama said in announcing the change during a White House briefing Thursday.

    But the change, which administration officials said can be done without legislation, could lead to increased premiums and undermine the risk pool for the fledgling state and federal insurance exchanges. In addition, insurance commissioners in at least two states—Washington and Arkansas—quickly indicated that they would not allow insurance firms to reinstate canceled plans.

    The change is, in essence, an extension of the grandfather clause that was part of the Patient Protection and Affordable Care Act. Under that provision, individuals can keep plans they had at the time the law was enacted in 2010 (unless the insurer had made significant changes to the plan). The administration now says the exemption will allow consumers to keep any plan they're currently enrolled in—provided their insurance company continues to offer it.

    “We put a grandfather clause into the law, but it was insufficient,” Obama said. “That's something I deeply regret because it's scary getting a cancellation notice.”

    Insurance companies will have the discretion to decide if they want to continue offering the non-complying plans for 2014. They'll also need to get permission from state insurance commissioners. Given that there are fewer than six weeks left until those plans would take effect, this could prove a formidable logistical hurdle to overcome.

    Insurers that choose to take advantage of the change also will have to follow two rules. They'll have to notify consumers what benefits their plans exclude that would otherwise be required under the Affordable Care Act. In addition, they must tell consumers that they have other options available to them through the exchanges.

    “Changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers,” Karen Ignagni, president and CEO of the trade group America's Health Insurance Plans, said in statement reacting to the policy. “Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace. If now fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase and there will be fewer choices for consumers.”

    The National Association of Insurance Commissioners and the American Academy of Actuaries likewise said that the administration's new policy could upset the individual insurance market.

    Premiums approved for 2014, the actuaries said, may not “adequately cover the cost” of providing benefits for a population with higher claims than what was assumed when premiums were calculated. The group also said relaxing the plan cancellation requirements could hike premiums for 2015.

    “Insurers cannot increase premiums in future years to make up for prior losses,” the organization said in a statement. “However, assumptions regarding the composition of the risk pool would reflect plan experience in 2014.”

    Meanwhile, the change is unlikely to placate Republicans who have repeatedly sought to repeal or cripple the controversial healthcare legislation. But Obama took action after a growing chorus of Democrats, including former President Bill Clinton, called for allowing current individual policies to be renewed.

    The House is expected to vote Friday on a bill, sponsored by Rep. Fred Upton (R-Mich.) that would allow insurance companies to continue selling all policies currently on the market in 2014 regardless of their adherence to ACA requirements. It would also stipulate that any policy sold by insurers satisfies the individual mandate.

    CO-OPs poised to expand to three more states

    Plans under the Consumer Operated and Oriented Plans were originally expected to be established in all 50 states under the Affordable Care Act. But after funding was slashed by $1.4 billion for CO-OPs as part of the fiscal cliff deal at the end of last year, many pending applications were dropped.

    That left 23 such not-for-profit plans operating nationwide. Currently, only one CO-OP, CoOportunity Health, operates in more than one state; it operates in Iowa and Nebraska. CO-OPs are not-for-profit health plans that are supposed to be guided by the concerns and needs of consumers rather than profits.

    But that could change soon. Three other plans—Kentucky Health Cooperative, Montana Health CO-OP and Minuteman Health (Massachusetts)—have submitted plans to the CMS to expand operations into a neighboring state. If approved, that would mean consumers in West Virginia, New Hampshire and Idaho would be able to purchase CO-OP plans.

    Partnership seeks to expand exchange enrollment in Vermont

    Vermont Gov. Peter Shumlin and the Vermont Association of Hospitals and Health Systems announced a partnership Tuesday to encourage greater participation the state's health insurance exchange. According to figures released by the federal government this week, just 1,325 individuals had chosen an insurance plan through Vermont Health Connect as of Nov. 2. Under the partnership, hospitals across the state will help train outreach workers, provide onsite enrollment and distribute information about the online marketplace.

    Follow Paul Demko on Twitter: @MHpdemko

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    diversity2_i.png
    How Connecticut's Broker Academy targets health disparities
    cybersecurity_i.jpg
    Massachusetts health insurer faces ransomware attack, member data at risk
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Daily Finance Newsletter: Sign up to receive daily news and data that has a direct impact on the business and financing of healthcare.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Jobs
      • People on the Move
      • Reprints & Licensing