Keeping Your Healthcare Plan: Complications and Updates

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 14^th 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.