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Regulators, Insurers Scramble Following Obama’s Extension of Plans

by Christine Stuart | Nov 15, 2013 6:30am
(7) Comments | Commenting has expired
Posted to: Congress, Equality, Health Care, White House

Hugh McQuaid file photo

State Insurance Commissioner Thomas Leonardi

Regulators at Connecticut’s Insurance Department were busy Thursday dealing with President Barack Obama’s announcement that he would extend for one year some plans that were cancelled in 2014 as a result of the Affordable Care Act.

Facing criticism from all sides and plummeting poll numbers, Obama put insurance companies back in the spotlight by encouraging them to reinstate the plans, but only if state insurance regulators agreed to allow those plans back in the marketplace.

State Insurance Commissioner Thomas Leonardi said his department is “carefully examining the full effect that this change would have on all Connecticut policyholders.”

It’s unknown at the moment how many consumers in Connecticut have had their plans cancelled.

“The ACA is an expansive and complex law built on myriad consumer protections, and any change deserves careful and thoughtful analysis,” Leonardi said.

The ACA, also known as Obamacare, included a provision that allowed people who, at the time of its passage, had coverage that did not meet the law’s standards to keep their plans if their plan hadn’t changed. The concept of grandfathering those plans will be expanded another year as long as the insurance companies are still willing to offer them and regulators are still willing to allow them.

“State insurance commissioners still have the power to decide what plans can and can’t be sold in their states, but the bottom line is, insurers can extend current plans that would otherwise be cancelled into 2014,” Obama explained during a televised press conference. “And Americans whose plans have been cancelled can choose to re-enroll in the same kind of plan.”

But the late-in-the-game decision by Obama to extend enrollment in those plans may work against consumers.

“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,” America’s Health Insurance Plans’ President and CEO Karen Ignagni, said in a statement. “Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace.”

The danger is that if “fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase in the marketplace and there will be fewer choices for consumers,” Ignagni, head of the national trade association for the health insurance industry, said.

Access Health CT CEO Kevin Counihan agreed with Ignagni’s assessment.

He said a key principle of the Affordable Care Act is a balanced risk pool. So, demographically speaking, the key is a good distribution of younger, healthier people — who aren’t using many medical services but are paying into the system — to offset the costs of older, maybe sicker, individuals who are using the medical services more frequently.

Obama’s announcement “may incent people to stay with plans outside the exchange that could have a deleterious effect on the pool,” Counihan said.

It also only gives insurance carriers about seven weeks to come up with new rates that would have to be approved by regulators before allowing consumers to re-enroll.

Democratic Gov. Dannel P. Malloy said his administration is examining the ramifications of Obama’s statements.

“We understand there is uncertainty among some policyholders and that is why I have asked Commissioner Leonardi to carefully review the legal and regulatory questions that this poses,” Malloy said. “As a part of this review, Lt. Gov. Wyman is also convening a meeting with the Exchange and other stakeholders.”

In the meantime, he urged residents to check out the rates on the Access Health CT website to see how they stack up to their existing policy.

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(7) Comments

posted by: dano860 | November 15, 2013  8:59am

Mr. Owebama has overstepped his authority. The Constitution does not allow for him to alter existing law as he has done, more than once.
He will be responsible for the next economic down turn after he gets done destroying the insurance industry.
I don’t know who is advising him but this is going to create a larger mess than ever. Most of the States aren’t in a position to reverse direction and it takes more than a week to review all of the actuary data and reset pricing.
This is less than a fix too, a one year reprieve will not be enough time to affect positive change.
This is a last ditch effort to placate the Democrats facing re-election. I don’t believe it will do anything but turn people against them even further.
THEY should have read it before they passed it!
What a mess he has created.

posted by: JAM | November 15, 2013  9:05am

The “Obama Solution” isn’t going to happen, and that’s how he wants it. In addition to massive logistical problems, it undermines the whole idea of ObamaCare which is to shift the cost of insuring the high risk people to the low risk.
You may agree or disagree with it, but that’s how it’s set up. The “Obama Solution” is political cover with the hope it can’t be implemented.
So now the question is who is going to take the hit : the St Regulators, or the Insurance companies. My guess, the Ct Ins Dept will follw suit allowing the old policies to be reinstated knowing as a practical matter it won’t happen.
Then all the pols can blame the Insurance Companies. Problem Solved!

posted by: UConnHoop | November 15, 2013  10:05am

How many more examples do these people need to finally conclude that this law is a disaster and cannot be fixed?

posted by: DirtyJobsGUy | November 15, 2013  12:33pm

My small company has seen a +64% increase to buy our identical policy in 2014.  Our current policy is comprehensive and generous (no junk policy Mr. President or Senator Murphy).  I have seen reports that this is common in the small group market across the nation.  We will end up getting a policy with greater deductibles and co-insurance (which we reimburse our employees for).  I’m guessing our expenditures will rise 30 to 50% minimum.    Sorry the exchange policies are not only expensive but have no where near the provider coverages we expect. 

So why did the progressives insist on on-line exchanges and not sell via the existing licensed and training insurance brokers?  Why insist on non-insurance type coverages (pediatric dental)? 


posted by: Just Saying | November 15, 2013  12:53pm

Gee, I thought extensive government meddling into the private sector would improve things. Guess not. But the sheeple who vote in CT will retain our congressional delegation despite their collective support of Obamacare. And our two brilliant US Senators are safe despite Murph’s deciding that the media was at fault for not talking about the successes of ACA. What a crew. CT should be proud.

posted by: Art Vandelay | November 15, 2013  1:50pm

The ADA was written with one and only one purpose, to steer the country into a single payer socialized system totally controlled by the government.  Doesn’t anyone see it?  The law was written so private insurance companies for individuals and employee plans could never comply.  The goal was to steer these people into the exchanges so the government could have total control.  It’s as plain as the nose on your face.  The problem was that the computer program crashed and the walls came tumbling down.  It’s not going away.  The Democrats & Obama won’t quit until the Government has total control.

posted by: lkulmann | November 17, 2013  7:08am

I’m still trying to figure out why the CT Insurance Department doesn’t regulate Medicaid. They dress up their website with all the ACA information but defer legal regulatory questions to DSS. The CT Department of Social Services does the regulating of that hunk of cash. The only regulating DSS does is click LIE and DENY and EMBEZZLE.