Covered California will not allow state health insurers to offer extensions of their outdated policies.
The state Obamacare’s board of directors voted unanimously to stay the course, despite lobbying from the California insurance commissioner.
“Delaying the transition won’t solve a single problem,” said board member Susan Kennedy. “If I thought for a minute that by delaying it we could solve some of the problems I would (vote to) delay it.”
The decision was expected as it comes on the heels of similar declarations by other states with their own Affordable Care Act operations, such as New York and Massachusetts.
The vote was taken at the Covered California’s regular board meeting Thursday. The board followed the recommendation of CEO Peter Lee.
Covered California also announced that 79,891 people have enrolled in private health plans as of Tuesday. About 135,000 others found out via the exchange that they are eligible for Medi-Cal.
President Obama, under fire from critics, decided last week to allow yearlong extensions of insurance policies sold in the private market that don’t meet the standards of “essential health benefits” under the Affordable Care Act.
California Insurance Commissioner Dave Jones said of the board’s decision: “Covered California could have honored President Obama’s request, without causing damage to the implementation of the Affordable Care Act or the exchange.”
While the vote rejects Obama’s short-term solution for the problem of cancelled policies, it marks an affirmation of the Affordable Care Act’s viability in California.
States such as California that run their own Obamacare shops had to decide to what extent the extensions would hurt their enrollments. Insurance companies are not required to offer extensions of non-compliant healthcare policies, but they are allowed to do so under Obama’s order.
Washington state, Minnesota, Rhode Island, Indiana and Vermont also said they will not permit extensions of previously canceled policies. North Carolina and Florida are among those allowing the extensions.
The state marketplaces and insurance companies were taken aback last week as Obama scrambled to head off Democratic defections over the issue of canceled healthcare policies. Obama had famously promised that Americans who liked their health insurance would be able to keep it. The new policy applies to those buying health insurance in the private market whose policies were canceled as of Jan. 1.
Healthy younger adults — the so-called “young invicibles” — have been hit with significant increases in replacing their outdated policies with Obamacare-compliant coverage, as was anticipated under the Affordable Care Act. Extensions would keep many out of the state marketplace, perhaps to their detriment.
Lee told reporters Nov. 19 that having a diversified risk pool — with a mix of younger and older customers — “is critical to the ongoing viability and the out-of-the-gate viability of exchanges.”
Lee also worried about Californians staying with “bad” healthcare policies for another year.
Two major Covered California providers — Anthem Blue Cross and Blue Shield — were ordered by the state insurance commissioner to extend policies until the end of the first quarter 2014, because they did not give consumers sufficient notice of cancellations.
“Covered California rejected what President Obama and I asked for — that individual policyholders be allowed to keep their existing health insurance through all of 2014,” Jones said. “Covered California’s decision denies Californians the same opportunity health insurers are giving to its small business customers who are being allowed to renew current policies throughout 2014.”
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