Insurance commissioner: Obama plan won’t save most canceled CT health policies
The vast majority of health plan cancellations in Connecticut are not the result of the federal health law and wouldn’t be affected by a policy change President Obama offered last week to allow more people to keep their coverage, Insurance Commissioner Thomas B. Leonardi said Monday morning.
Speaking to Ray Dunaway on WTIC radio, Leonardi said about 27,000 policies have been canceled in the state, but that only about 9,000 of them are being discontinued because they don’t comply with the health law commonly known as Obamacare. The others could have been continued into 2014 under the law, but insurance companies decided to discontinue them.
“A lot of what you’re seeing here is the insurance companies doing what is their normal business practice of looking at their policies, their books of business and making cancellations in the normal course,” Leonardi said.
Leonardi said in an interview Monday afternoon that his figures were based on extrapolations from numbers provided by Anthem Blue Cross and Blue Shield, the state’s largest insurer.
Last week, in response to anger at the hundreds of thousands of policies being canceled across the country, Obama announced that insurance companies would be allowed to extend policies that don’t meet the health law’s requirements. Obama had previously promised that people who liked their plans could keep them under the health law.
It will be up to Leonardi’s department to determine whether Connecticut will allow policies to be extended. Last week, Gov. Dannel P. Malloy, a Democrat who appointed Leonardi, indicated that Leonardi and Lt. Gov. Nancy Wyman, who heads the state’s health insurance exchange board, would examine the issue before making a decision.
At least one state leader is pushing for action. On Friday, Senate Minority Leader John McKinney, a Fairfield Republican who is running for governor, warned that state law wouldn’t permit plans to be extended unless the legislature and governor took action, and challenged Malloy to call a special legislative session to address it.
Leonardi said Monday that no decision had been made about whether to allow plans to be extended. “We will come up with a recommendation for the governor that we think is appropriate based on the facts,” he said.
Even if the state permits it, insurance companies would be allowed to decide whether to continue policies now slated for cancellation. If they do, they would have to come up with new prices for the policies and get them approved by the insurance department before Jan. 1, less than seven weeks away.
The insurance industry, the national association of insurance regulators and the American Academy of Actuaries have all raised concerns about Obama’s policy change, warning that it could destabilize the insurance market and could be problematic to implement.
Obamacare effectively created two tiers of individual-market health plans. Those that were in effect before the law passed in March 2010 are known as “grandfathered,” and can be continued as long as the benefits and costs don’t change significantly. The policies are not available to new customers, and insurance companies aren’t required to continue offering them.
Separately, health plans that began after the health law passed do not have grandfathered status and won’t be allowed to be sold after Jan. 1, 2014, unless they meet the new requirements taking effect as part of the health law. Most are unlikely to comply with the new requirements, which include covering a set of “essential health benefits” that includes items like maternity and pediatric dental and vision care that virtually no plans cover now, covering at least 60 percent of members’ medical costs and meeting specific targets for the percentage of medical costs they cover.
Obama’s policy change would allow the health plans sold after March 2010 to also be considered grandfathered for a year, letting people who have them keep them if state regulators permit it and insurers decide to extend the plans.
Leonardi said Monday that the vast majority of the health plans being canceled are grandfathered under Obamacare and could have been continued into 2014 if the insurers had chosen. The number of people whose plans are being canceled because of the health law is relatively small, he said.
“But I understand, believe me, that if you’re one of those people, you’re confused, you’re not happy, and I get that, and that’s why we’re working to figure this one out,” he said.
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