A letter sent to insurance commissioners Thursday outlines White House guidance to address the problem of insurance cancellations under Obamacare. The letter places the onus on insurers to choose whether they will continue offering canceled or would-be canceled plans.
“Health insurance issuers may choose to continue coverage that would otherwise be terminated or canceled, and affected individuals and small businesses may choose to re-enroll in such coverage,” says the letter, sent from Gary Cohen, director of consumer information and insurance oversight at the Centers for Medicare and Medicaid Services.
The administrative fix allows insurance companies to continue offering plans that do not meet the new, more-comprehensive standards set under the health care law.
Under what is referred to as a “transitional policy,” insurers and consumers will be allowed to renew their coverage in the individual or group market for the policy year between Jan. 1, 2014 and Oct. 1, 2014.
The guidance comes with certain conditions. Coverage must have been in effect on Oct. 1, 2013, so new customers cannot purchase these plans, and the insurance companies must inform consumers of alternative options available through the health insurance marketplace.
“State agencies responsible for enforcing the specified market reforms are encouraged to adopt the same transitional policy with respect to this coverage,” the letter reads.
The policy does not, however, require companies to comply, and industry experts say it may be too late to reverse cancellations.
Obama was not shy about the political nature of the announcement Thursday.
“What we want to do is to be able to say to these folks, ‘You know what, the Affordable Care Act is not going to be the reason why insurers have to cancel your plan,’ ” Obama said. “Now, what folks may find is, the insurance companies may still come back and say, ‘We want to charge you 20 percent more than we did last year, or we’re not going to cover prescription drugs now.’ “
Needless to say, insurance companies aren’t so pleased with the solution.