Restoration of canceled insurance isn't a given
Obama's reversal gives final say to state regulators, individual insurers
URBANA — Health Alliance Medical Plans is all for letting its thousands of customers with canceled health insurance plans continue them for another year, but that's a decision the state will first have to allow, company CEO Jeff Ingrum said.
On Thursday, President Barack Obama reversed course and said millions of Americans should be allowed to renew individual coverage plans now ticketed for cancellation under the Affordable Care Act — but with certain conditions. One is that state insurance regulators have the final say.
Insurers would also need to notify customers that the existing plans they'd be keeping don't offer all the benefits required under the new law, and there are other health plan options (with potential payment subsidies) available for them in the government marketplace.
Under pressure from consumers as well as congressional Democrats, Obama said the administration no longer would require insurance companies to jettison current individual and small group plans that fall short of the minimum coverage standards under the law, effectively shifting responsibility for cancellations to the industry itself. The change would be good for just one year, though senior administration officials said it could be extended if problems persist.
Speaking of the millions of people whose coverage is being scrapped, Obama said, "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 spoke at a news conference where he repeatedly took responsibility for the woeful rollout of the health care program known by his name. Officials disclosed on Wednesday that fewer than 27,000 enrollments were completed in 36 states in the first month of operations for HealthCare.gov.
Including enrollment of more than 79,000 in the 14 states with their own websites, the nationwide number was 106,000 for October sign-ups. But that is still far fewer than expected and a mere fraction of the cancellation notices that have gone out because of the law — more than four million according to an Associated Press survey.
Mike Claffey, a state health care spokesman, said Illinois Department of Insurance Director Andrew Boron has been in contact with federal authorities since Obama's announcement.
"We are closely monitoring the situation," he said. "In light of the latest developments, we are carefully evaluating the department's options under state law and through the lens of what's best for Illinois health care consumers."
Meanwhile, Blue Cross Blue Shield of Illinois officials said the company, which has the most customers in the state's individual market, is "determining next steps," but they stopped short of promising to renew its canceled plans.
Shonn Hild, a landscaper from Sullivan, whose health plan was canceled recently, said Obama's proposal may be "too little, too late." He said he called Blue Cross on Thursday after the president's announcement and was told the company is gathering information. But "as of right now they do not have any plans to bring back the discontinued plans," Hild said he was told.
Health Alliance would be "more than happy" to help its customers extend their current health plans — in effect through the end of the calendar year — for another year, Ingrum said.
"We have about 19,500 members on our individual plans, and I think most of them would like to keep what they've got," he said.
Obama's one-year fix should create less fear for people facing their options, Ingrum said, and he thinks it was a good move. However, he warns, "at this time, it's only a delay so it doesn't necessarily mean this issue has totally been fixed. All they've done at this point is announced a delay."
Danville insurance agent Jim Moore was happy to hear the news, saying he's got a long list of customers to get back to.
"If they would say all people can keep their existing plans for a year, 99 percent of my people would keep their existing plans for a year," he said. "I don't see any reason they wouldn't."
Moore has been hunting for new health coverage along with his customers, since learning he and his wife are facing a more-than-double increase in premiums for their Health Alliance plan.
Keeping the current plan would be their best choice for a year, he said.
"My attitude is if we can delay it for a year, maybe we'll see what this is doing to people and they'll see what this is doing to people and scrap the whole thing," he said.
Janice Popovich of Mahomet, who has been facing doubled Health Alliance plan rates for coverage for her family of four, said being able to keep the current plan would help temporarily.
"That would definitely help my situation for sure, but my concern is what will come for the future, because it's not a permanent solution, obviously," she said.
Jim Duffett, executive director for the pro-health care reform organization Campaign for Better Health Care, said this is a short-term fix that he doesn't expect to compromise the overall impact of the Affordable Care Act.
It would have been a larger concern if people would have been allowed to keep their old health plans indefinitely, he said, because some of those plans contained such thin coverage they didn't even include hospitalization.
The insurance industry has known for three years it would have to meet new standards of coverage, and could have begun moving their customers into new plans and educating them about what was coming more gradually instead of waiting until the last minute, Duffett said.
"For many people who think they've been covered, they're not, and it's unfortunate the insurance industry didn't begin easing people into plans that met these standards," he said.
Ingrum said it's not fair to suggest insurance companies should have been changing customers' policies early when the government promised they could keep the policies they liked. At the heart of this issue are promises that weren't kept and a federal health marketplace that is "not ready for prime time," he said.
"We followed the rules and did what we were supposed to do," Ingrum added.
Duffett contends this has been an education process for people, and he urges policyholders to look at what their plans offer and what else is available in the government marketplace.
The analogy he has been using for a shift to new health coverage standards is the effect of new safety standards for the automotive industry, he said.
"They've instituted seat belts, airbags and safety glass and many other things, and we've definitely seen the lives of people being saved from automobile accidents," he said.