Amid the uproar over President Obama's now untenable "If you like your insurance you can keep it" pledge, California's Insurance Department has obtained a temporary delay for some Blue individual policies on track to sunset in 2014.
California Insurance Commissioner Dave Jones has secured an agreement with Blue Shield of California to allow individual and family policyholders to extend their coverage through March 31, 2014, whereas the company had planned to end them before the new year.
The extension will affect an estimated 115,000 Californians, who were given 90 days notice. Jones objected to Blue Shield's December 31-effective cancellations, arguing that 180 days notice should be given if an insurer will no longer be selling in a particular market.
Jones, a former state legislator from Sacramento who was elected to the job of top insurance regulator in 2013, also pointed out some consumer insurance issues stemming from the rollout Covered California, which required insurers selling in the exchange to end pre-health reform health plans, and argued that it probably would not have been too detrimental on exchange risks pools to let individual policies continue at least for some time into next year.
"I disagreed with health insurers' decision to cancel policies and Covered California's decision to require health insurers selling in the exchange to cancel existing policies," Jones said in a media statement.
"The existing policies are likely to have a broader network of medical providers and for those who are not eligible for premium subsidies, a lower cost than what is available in 2014," he continued. "There is nothing in the healthcare reform law that requires insurers to narrow their provider networks, but some insurers are doing so, which means consumers will want to confirm that their doctors and hospitals are in the network before selecting new coverage."
Covered California is allowing insurers selling qualified group health plans to let their small business customers renew their existing health plans. Jones said the exchange "should have allowed individuals and families to do the same."
As part of Jones' agreement with Blue Shield, the company is sending new notices explaining the new option to remain on the plan until March.
"If all of the policyholders elect to stay in their existing plans until March 31, the premium savings could be as high as $28.6 million," said Jones, who's also encouraging consumers and employers to use Covered California's site to check their potential costs with premium assistance included.
Blue Shield of California, which is selling both individual and group policies in the exchange, is also telling members that "there are significant risks" for extending coverage through March. "They may have to pay a deductible twice," the company said on its website. "When they transition to a new policy in April, they may have to meet a separate deductible for the new plan and may not receive credit for their earlier payments."
They'll also miss out on about a quarter-year's worth of tax credits, and eventually they'll have to enroll in an ACA-compliant plan anyway, the Blue Shield noted.
The extension option comes amid hundreds of consumer anecdotes from people with policies being phased out, and proposals in Congress to allow more "grandfathering" under the ACA. The issue came to a head in the media after the Wall Street Journal ran the account of a patient with late stage gallbladder cancer who has lived seven years with the disease despite the 2 percent average five year survival rate and now is seeing her UnitedHealth individual PPO being cancelled, as UHG leaves the California individual market at the end of the year.
"I believe that there's been a crisis of confidence created in the dysfunctional nature of the website, the canceling of policies, and sticker shock from some people," as Maryland Democratic Senator Barbara Mikulski told CMS Administrator Marilyn Tavenner during a congressional hearing in early November..