On Nov. 21, 2013, California became the ninth state to reject the transition policy for canceled plans. The Board of Directors for California’s health insurance Exchange, Covered California, unanimously voted to uphold its Dec. 31, 2013, deadline for health insurance companies to discontinue plans that don’t meet basic ACA standards. This means that health plans in California will be required to meet ACA standards in 2014.
The Board also extended the deadline for enrollment for coverage taking effect on Jan. 1, 2014. Individuals will now have until Dec. 23, 2013, instead of the original deadline of Dec. 15, 2013, to enroll through the Exchange for coverage to be effective on Jan. 1, 2014.
Overview of the Transition Policy
The Affordable Care Act (ACA) includes key reforms that create new coverage standards for health insurance policies, beginning in 2014. For example, effective for 2014 plan years, the ACA imposes new modified community rating standards and requires individual and small group policies to cover a comprehensive set of benefits.
Over the last few months, millions of Americans have received notices informing them that their health insurance plans are being canceled because they do not comply with the ACA’s reforms. President Obama has received criticism that these cancelations go against his assurances that if consumers have a plan that they like, they can keep it. Both Republican and Democrat members of Congress have been advocating changes to the ACA to resolve the cancelation issue.
Responding to pressure from consumers and Congress, on Nov. 14, 2013, President Obama announced a new transition policy for 2014. Under the new policy, individuals and small businesses whose coverage has been canceled (or would be canceled) because it does not meet the ACA’s standards may be able to re-enroll or stay on their coverage for an additional year.
However, this one-year reprieve will not be available to all consumers. Because the insurance market is primarily regulated at the state level, state governors or insurance commissioners will have to allow for the transition relief. Also, health insurance issuers are not required to follow the transition relief and renew plans, and have expressed concern that the change could disrupt the new risk pool under the federal and state Health Insurance Marketplaces.
On Nov. 21, 2013, the Covered California Board of Directors unanimously voted to uphold its Dec. 31, 2013, deadline for health insurance companies to discontinue plans that don’t meet basic standards. The board cited that extending the deadline offers no benefit to the consumer and may create confusion about accessing affordable health care coverage through Covered California.
The Board, consistent with President Obama’s recommendations, also urged Covered California staff to implement helpful tools for consumers currently enrolled in affected plans to better understand their options.
According to the Board, the decision to maintain the original deadline also confirms the state Exchange’s commitment to transitioning Californians into plans that are compliant with the ACA’s reforms, protecting consumers from double deductibles and stabilizing the risk pool to control costs for consumers beginning in 2014.
Additionally, Covered California is implementing the following five key strategies to aid enrollment and help affected consumers:
- Extending the deadline for enrollment for coverage taking effect on Jan. 1, 2014, from Dec. 15, 2013, to Dec. 23, 2013, and extending the deadline for payments due from Dec. 26, 2013, to Jan. 5, 2014.
- Establishing a telephone hotline for consumers to resolve enrollment questions, available at 855-857-0445.
- Sending information directly to nearly 1.13 million affected individuals that provides clear options for coverage. The information will be sent from Covered California and the individual’s current insurance provider.
- Collecting and reporting data, on a regular basis, showing the impacts of conversion for individuals.
- Engaging consumers in their communities through the thousands of Certified Insurance Agents, Certified Enrollment Counselors and Certified Educators now deployed statewide.
According to Covered California Executive Director Peter V. Lee, “These new strategies will provide consumers a better enrollment experience, more flexibility in the selection of a plan and, most importantly, increased knowledge with which to make the best health coverage choice possible.”
Other State Decisions
Several states have agreed to allow insurers to extend canceled policies for another year, including Oregon, North Dakota, Hawaii, Wisconsin, Ohio, Kentucky, Tennessee, Maryland, Virginia, North Carolina, South Carolina and Florida.
However, a number of other states have decided against permitting insurers to use the transition policy, including Connecticut, Washington, Minnesota, New York, Indiana, Vermont and Rhode Island.
Some states, such as Maryland, are allowing renewals with specific provisions.