Washington Update

Reaction to Administration’s Fix for Cancelled Health Policies

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Insurers and state insurance regulators, caught off guard by President Obama’s November 14 announcement that insurance companies could temporarily keep people on policies that had been slated for cancellation, were still assessing the impact of the order several days later, CQ HealthBeat News reported. Obama held a closed-door meeting with insurance executives the day after his announcement for what he said were “collaborative” discussions.

During the preceding weeks, millions of Americans had received cancellation notices in the mail because their policies did not include all of the ten “essential benefits” required by the Affordable Care Act. The cancellation notices had become problematic for the president, because in his campaign to pass the Affordable Care Act, he repeatedly told Americans they could keep their health insurance policies if they liked them.

The president’s announcement, made during a television appearance just a day before the House of Representatives voted to allow people to keep their health plans for another year, raised three immediate questions. Because the president’s order does not appear to obligate insurers to let people keep plans that had been cancelled previously, it was unclear how insurers would react. It was also not clear whether state insurance regulators, who are the chief overseers of their insurance markets, would consider the Obama directive to have the force of law. Finally, it was unclear what rates insurers would charge individuals to keep previously cancelled plans because renewal rates for 2014 had not been calculated.

CQ HealthBeat News
pointed out that the proposed fix presented a separate set of issues for each state. Some states, led by Washington, said they would continue to forbid plans that did not meet the minimum benefit requirements. Others states, like California and Florida, said the president’s plan was acceptable, while Texas insurance regulators said insurance company plans did not need their approval.

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