The Obama Administration repeatedly
stated “If you like your healthcare plan, you can keep it,” once the Affordable
Care Act is enacted. However, millions of people received cancellation notices
from their insurance companies because their policies did not meet the minimum requirements
of basic coverage mandated by the Affordable Care Act.
The minimum requirements
include coverage for preexisting conditions, hospitalization, prescription
drugs, emergency services, maternity and newborn care, mental health and
substance abuse services, laboratory services, rehabilitative services and devices, pediatric services
including oral and vision, ambulatory patient services and preventative and
wellness services and chronic disease management. The plans that were canceled
do not offer coverage for one or many of these conditions. All of the plans on
the healthcare exchanges will cover these basic conditions.
On November 14th President
Obama held a news conference announcing the decision to allow insurance
companies to keep individuals on health insurance plans that do not meet the
law’s requirements for an additional year. The directive does not require insurance
companies to allow customers that were already notified of cancellations to
come back. It does give insurance companies the discretion to take back
customers to offer the non-compliant insurance plans for one more year.
The ‘fix’ caught state insurance
regulators by surprise and was not well-received by representatives of some
states. Many states require insurance commissioners
to approve policy changes before the insurers will be allowed to reissue the
plans. Regulators in six states will not allow consumers with noncompliant insurance
plans to renew their coverage for next year. These regulators based their
refusal on concerns about the effects on the state health exchanges, the weak
benefits the canceled plans offer, and the increased premiums insurance
companies were charging individuals that wanted to keep or reenroll in their
canceled plans.
Like many parts of the Health Care
Exchange roll out, this aspect is more complicated than advertised. However,
the Obama Administration stated that the individuals that lost their plans had ‘subpar’
health insurance and that their coverage would eventually be upgraded to a
health insurance plan that includes many more benefits as required under the
Affordable Care Act.