CHA News Article

Obama Administration Announces Health Insurers and HMOs Not Required to Cancel Existing Policies
Covered California staff to present recommendations to board for possible action at Nov. 21 meeting

President Obama announced yesterday that health insurers and HMOs are not required by federal law to cancel existing policies.  In the White House’s fact sheet on this issue, HHS indicates it is using its administrative authority to:

  •  Allow insurers to renew their current policies for current enrollees without adopting the 2014 market rule changes. This will give consumers in the individual and small group markets the choice of staying in their plan or joining a new marketplace plan next year. HHS will consider the impact of this transitional policy in assessing whether to extend it beyond 2014.
  • Require insurers offering such renewals to ensure consumers are informed about their options. Specifically, insurers offering these renewals must inform all consumers who either already have or will receive cancellation letters about the protections their renewed plan will not include and how they can learn about the new options available to them through the marketplaces, which will offer better protections and possible financial assistance.

To protect against the potential impact this change will have on premiums, HHS will adjust the temporary risk corridor program, which is designed to stabilize premiums as changes are implemented.

California Insurance Commissioner Dave Jones has issued a press release requesting that all California health insurers and HMOs provide current customers the option to renew their existing non-grandfathered policies for 2014 and issue new notices to policyholders, advising them of their options. Commissioner Jones also called on Covered California to release all health insurers selling in the Exchange from the Covered California contract provision that requires health insurers to cancel plans for individual policyholders on Dec. 31, 2013. During today’s Covered California Plan Management and Delivery System Reform Advisory Group webinar, Executive Director Peter Lee said that Covered California staff would very quickly develop a recommendation(s) for the Covered California board of directors and present the recommendation(s) to the board during the Nov. 21 board meeting for possible action.