New one year extension for current insurance plans

[MichaelB]

I imagine this is due to the delay in the healthcare.gov website.

Obama Moves To Delay Cancellations Of Insurance Plans : The Two-Way : NPR

President Obama announced Thursday that Americans who have had their health insurance plans canceled because of his Affordable Care Act can keep those plans for another year if they wish.

In the next few days we'll hear how this will be implemented.

 

[ziggy29]

I hope they have worked with the insurers to get their pledge that they are willing to rescind their cancellation letters, otherwise it's a hollow promise. Because of the botched rollout this is probably a good thing as long as the insurers will delay cancellations by a year.

 

[MichaelB]

I hope they have worked with the insurers to get their pledge that they are willing to rescind their cancellation letters, otherwise it's a hollow promise. Because of the botched rollout this is probably a good thing as long as the insurers will delay cancellations by a year.

I agree. It's not clear what details have been worked out, the only thing I'm confident of is the media will get it mostly wrong. What really matters (IMHO) is that anyone currently insured can find a reasonable option and the ACA policies currently available for 1/1 remain available.

 

[2B]

• Why would an insurer not cancel most policies and force people on to the high deductible plans? Trying to selectively work out all these details will be a paper nightmare and it must be done within days.
• Insurance companies have planned to cancel these policies for months and have figured their recipients going to the exchanges when they determined their pricing.
• Will the insurance companies stay on the exchanges?
• Do insurance companies get forced to continue policies?

Yep, implementation will be the big question.

 

[pb4uski]

I hope they have worked with the insurers to get their pledge that they are willing to rescind their cancellation letters, otherwise it's a hollow promise. Because of the botched rollout this is probably a good thing as long as the insurers will delay cancellations by a year.

It is a hollow promise. The only thing they said was that they wouldn't require policies that are not ACA compliant to be recinded, but that the reviving of cancelled policies would be up to state insurance commissioners and the insurers. They are hoping that the commissioners and insurers will backtrack but there is no requirement that they do so. So much for "the buck stops here" - more passing the buck IMO.

The problem that I see is that the insurer's likely predicated their pricing on customers of these non-compliant policies becoming customers of the new exchange policies, so the pricing probably falls apart in many cases.

Possible a good political move by the administration, but it may create more problems than it solves and is political sleight of hand to focus attention somewhere other than DC IMO.

 

[MichaelB]

Lets please leave political analysis and speculation out of this and focus on how this affects getting health insurance.

 

[pb4uski]

If one keeps their previously cancelled plan for 2014, since it would not be purchased through the exchange and would not be ACA-compliant wouldn't that mean that the buyer would not be eligible for a subsidy? If so, I can see a lot of people keeping their plan because it is in their comfort zone but ending up paying more because the lose the subsidy (probably unknowingly).

Also, since premiums usually go up every year anyway, it would seem that the insurers would want some sort of increase over 2013 premium levels to cover people for all of 2014.

Too little, too late - and not too well thought out.

 

[2B]

Lets please leave political analysis and speculation out of this and focus on how this affects getting health insurance.

+1

The problem is now a major, yet undefined, change in the rules. If I was depending on the exchanges or any coverage based on the ACA next year, I'd be very concerned. Companies can play by the rules but they need to know what they are. Major, seemingly ramdom, changes do not make for happy insurance companies.

 

[winger]

Don't forget, insurance companies caused these problems to begin with. Selling lousy policies, and excluding pre-existing conditions. Our current system is broken, and needed fixed. Change is painful to some.

No sympathy here.

 

[MichaelB]

The problem is now a major, yet undefined, change in the rules. If I was depending on the exchanges or any coverage based on the ACA next year, I'd be very concerned. Companies can play by the rules but they need to know what they are. Major, seemingly ramdom, changes do not make for happy insurance companies.

Agree. Even if the insurers did get a heads up, lots of work is needed. It's easy to lose in the insurance business.

I'm confident things will eventually work out, hopeful the damage will be contained, and still expect to enroll in the ACA compliant policy I chose among the 136 available to us. Call me Polly...and DW Anna...

 

[audreyh1]

Of course if you were on a state risk pool - those are still going away Jan 1, 2014. But your new ACA plan is liable to be considerably cheaper.

 

[2B]

Of course if you were on a state risk pool - those are still going away Jan 1, 2014. But your new ACA plan is liable to be considerably cheaper.

The Texas High Risk Pool would have been $7,500/yr with a $7,500 deductible per individual. There were no family plans. My best choice I've seen on an exchange is $12,000/yr for a family of two with a $6,700 individual deductible. That's cheaper but not earth shattering.

 

[2B]

I just saw a news article that said that individual state insurance commissioners can decide which cancelled policies not meeting the ACA can be allowed in their state. The justice department would be directed to not prosecute these companies for this violation of the law. This is a one year extension only.

Further comment could not help but be considered political.

 

[audreyh1]

The Texas High Risk Pool would have been $7,500/yr with a $7,500 deductible per individual. There were no family plans. My best choice I've seen on an exchange is $12,000/yr for a family of two with a $6,700 individual deductible. That's cheaper but not earth shattering.

My deductible was $5,000/year - same as the new ACA policy I'm considering. But that was probably from when I originally bought, not new policies. They did not raise deductibles as policies got older. You always had an option to switch to a higher deductible to lower your premiums (slightly), but couldn't reduce your deductible.

The max OOP is coming down. I vaguely remember mine may have been $10K, but maybe that was out-of-network. I'm not sure.

My premium is coming way down - that's what's cheaper.

 

[2B]

My deductible was $5,000/year - same as the new ACA policy I'm considering. But that was probably from when I originally bought, not new policies. They did not raise deductibles as policies got older. You always had an option to switch to a higher deductible to lower your premiums (slightly), but couldn't reduce your deductible.

My premium is coming way down - that's what's cheaper.

There were choices of deductibles but it was only by raising the annual cost by a near equivalent amount. If you really didn't think you would need much medical care, the high deductible was the way to go. If I was getting expensive cancer treatment, I would probably have looked at the lower deductibles.

I'm glad you're saving some big bucks.

 

[audreyh1]

There were choices of deductibles but it was only by raising the annual cost by a near equivalent amount. If you really didn't think you would need much medical care, the high deductible was the way to go. If I was getting expensive cancer treatment, I would probably have looked at the lower deductibles.

I'm glad you're saving some big bucks.

DH will save in premiums too, and he's not on a risk pool. His deductible and max OOP will also come down.

If he stayed with about the equivalent plan (silver PPO), his premiums would be about the same, but both his deductible and max OOP would be lower - particularly the latter. So that helps.

But now he has the option to switch to a much lower premium HSA eligible bronze PPO plan (same network), with the same lower deductible and max OOP. That's where the big savings are coming in.

no subsidies.

 

[ziggy29]

My main concern is this: Most of the people hardest hit by the cancellations were probably "preferred risk" individuals who were facing large rate increases under ACA. But at the same time, the ACA plans were priced in a way that assumed these people would be in that risk pool.

So if many of the folks who were about to lose their old plans suddenly no longer have to get an ACA policy, doesn't that mean that the ACA policies have been significantly underpriced (with many of those healthier folks not in the pool for 2014) as the overall pool of insureds in the ACA plans is "sicker" than the actuaries originally assumed?

 

[Mulligan]

My main concern is this: Most of the people hardest hit by the cancellations were probably "preferred risk" individuals who were facing large rate increases under ACA. But at the same time, the ACA plans were priced in a way that assumed these people would be in that risk pool. So if many of the folks who were about to lose their old plans suddenly no longer have to get an ACA policy, doesn't that mean that the ACA policies have been significantly underpriced (with many of those healthier folks not in the pool for 2014) as the overall pool of insureds in the ACA plans is "sicker" than the actuaries originally assumed?

That is possible, but if I remember correctly, Michael has mentioned some "hold back" money that the government will hand out to insurers the first few years to mitigate
some of the potential early imbalance of insurers taking on too many unhealthy people. Maybe this will work as a backstop until the bleeding stops and a proper balance of healthy/unhealthy participants is found.

 

[2B]

That is possible, but if I remember correctly, Michael has mentioned some "hold back" money that the government will hand out to insurers the first few years to mitigate
some of the potential early imbalance of insurers taking on too many unhealthy people. Maybe this will work as a backstop until the bleeding stops and a proper balance of healthy/unhealthy participants is found.

Everything I've seen has had rates guaranteed for six months. I'm looking a eHealthInsurance.com for 2014 policies and not the Federal Exchange. I know I don't qualify for a subsidy even if I retire this year. It also appears that Cobra is cheaper.

 

[MichaelB]

That is possible, but if I remember correctly, Michael has mentioned some "hold back" money that the government will hand out to insurers the first few years to mitigate
some of the potential early imbalance of insurers taking on too many unhealthy people. Maybe this will work as a backstop until the bleeding stops and a proper balance of healthy/unhealthy participants is found.

Part of the rollout includes a reinsurance risk for (IIRC) 2 years. In other words, if the insured pool has a higher risk profile than the benchmark, the insurer receives compensation. I'll post details later if I can track them down. When I first heart the announcement this afternoon my first thought was this would need to be extended another year.

 

[sheehs1]

My main concern is this: Most of the people hardest hit by the cancellations were probably "preferred risk" individuals who were facing large rate increases under ACA. But at the same time, the ACA plans were priced in a way that assumed these people would be in that risk pool.

So if many of the folks who were about to lose their old plans suddenly no longer have to get an ACA policy, doesn't that mean that the ACA policies have been significantly underpriced (with many of those healthier folks not in the pool for 2014) as the overall pool of insureds in the ACA plans is "sicker" than the actuaries originally assumed?

I don't think so ziggy. Meaning, I don't think the ACA policies were underpriced (without the subsidy that is).

At least that is my experience here in Va. Some states could vary. Anthem BC/BS in Virginia was/is offering the same policies on and off the exchange at the same prices going forward. The only incentive to go to the exchanges is only if you qualify for a subsidy. No other reason. They are the major carrier here.

Their private Off exchange policies sold to individuals even have the same names and the same levels of Bronze, Silver...etc.

 

[pb4uski]

My main concern is this: Most of the people hardest hit by the cancellations were probably "preferred risk" individuals who were facing large rate increases under ACA. But at the same time, the ACA plans were priced in a way that assumed these people would be in that risk pool.

So if many of the folks who were about to lose their old plans suddenly no longer have to get an ACA policy, doesn't that mean that the ACA policies have been significantly underpriced (with many of those healthier folks not in the pool for 2014) as the overall pool of insureds in the ACA plans is "sicker" than the actuaries originally assumed?

Yes, I think you are right. It seems likely that there will be adverse selection issues as a result of this last second change, but it remains to be seen whether the state insurance commissioners and insurers will play along.

 

[sheehs1]

Hope this isn't too political but it might address some people's concern about whether the insurers are mandated to offer the policies that were canceled. Certainly not a done deal by any means...but...it is a possibility.

Landrieu's Obamacare 'Keep Your Plan' Bill Gains Merkley As Co-Sponsor - Business Insider

 

[ziggy29]

I don't think so ziggy. Meaning, I don't think the ACA policies were underpriced (without the subsidy that is).

At least that is my experience here in Va. Some states could vary. Anthem BC/BS in Virginia was/is offering the same policies on and off the exchange at the same prices going forward. The only incentive to go to the exchanges is only if you qualify for a subsidy. No other reason. They are the major carrier here.

Their private Off exchange policies sold to individuals even have the same names and the same levels of Bronze, Silver...etc.

We may have our signals crossed here. The insurers don't care about the subsidies. They get paid the full premium regardless of the allocation of the payments from individuals and Uncle Sam.

I'm saying that people in these individual plans who want to keep them are probably healthy enough that they can get covered for less than the current ACA plans (which assumed a wider pool of insureds). But if they can stay in their current (cheaper) plans for another year, then some of the healthier folks who were being counted on as part of the risk profile of the ACA plans are not there, at least not in 2014.

But again, that requires that the insurers play along. And I hope this announcement wouldn't have been made unless many (if not most) of them were ready to play along.

 

[Mulligan]

Hope this isn't too political but it might address some people's concern about whether the insurers are mandated to offer the policies that were canceled. Certainly not a done deal by any means...but...it is a possibility. Landrieu's Obamacare 'Keep Your Plan' Bill Gains Merkley As Co-Sponsor - Business Insider

I personally would stand to save thousands of dollars a year from this proposal, so it wouldn't offend me, until I got dropped.. . But seriously I don't understand why the initiators of this proposal were original supporters of the ACA. I do not see how Obamacare can survive with all the healthy people staying on their current plans. This has to be political pandering. I understand a one year extension, but how can supporters of this be supporters of Obamacare, too? Unless they are more worried about keeping their job, or they are counting on Mr. Reid blocking it and thus being able to save face, and yet still implement the ACA. Not trying to be political, just trying to figure out the logic, as I know they surely understand the consequences of this proposal.