Six weeks after Healthcare.gov opened, President Obama announced that the administration will delay a key point of the PPACA (Patient Protection and Affordable Care Act.)  The state insurance commissioners now have the option of letting insurers continue recently-cancelled plans through 2014, while still encouraging consumers to peruse public marketplaces.

The president's plan does not require the insurance companies to take back the Americans they kicked off, but does give them the option of taking the customers back if they want. This last minute change has consequences of its own. Premiums have already been set for next year based on an assumption of a certain number of people buying their insurance from the exchange. Healthcare Payer reports that according to Karen Ignagni of America's Health Insurance Plans, "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,"

The cancellations, estimated to affect up to 7 million Americans, are due to new standards in the Affordable Care Act that insurance companies are required to meet.  The administration argues that many of the canceled plans were subpar and that many people can buy better insurance for less on the federal marketplace. The law significantly overhauled the individual insurance market, prohibiting plans that kick people off if they become sick or hiking premiums due to illness, among other reforms.

This means that insurance companies that sent cancellation notices to an estimated two million Americans in the last few weeks may reinstate the policies.   But it remains unclear whether insurance companies will rescind the cancellations they've already handed out, since the Obama administration is not requiring them to do so. And the extension is only for one year, so the fix only delays the fact that many Americans will not be able to keep their current insurance under the new law.

Finally, according to FierceHealthcare, continuous security threats are a great concern, as Americans continue to enter very sensitive personal information into HealthCare.gov. In fact, one month prior to the launch, a high government official, Chief Information Officer Tony Trenkle stated that, there are limitless security threats that would expose insurance buyers to identify theft. As Washington continues to search for answers and make adjustments, we will keep you updated on the changes and conversations as they take place.

 

References:

MacDonald, Ilene. (11/14/2013). ACA key component delayed: Americans can keep insurance for another year. FierceHealthcare. Retrieved from: http://www.fiercehealthcare.com/story/Obama-aca-key-component-delayed-americans-can-keep-insurance-another-year/2013-11-14.

 

Brino, Anthony. (11/14/2013). Obama defers to states with policy extension. Healthcare Payer Newsweek, 3(47). Retrieved from: http://www.healthcarepayernews.com/content/obama-defers-states-policy-extension-fix.