AIS E-Alerts

Seven States Decline to Comply With Obama’s Policy Change

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November 19, 2013

Of the 51 insurance commissioners across the U.S. including Washington, D.C., seven now have said they will not comply with President Obama’s Nov. 14 policy change on insurance cancellations resulting from the Affordable Care Act.

Under the regulatory fix President Obama unveiled Nov. 14, “issuers may choose to continue coverage that would otherwise be terminated or cancelled….Under this transitional policy, health insurance coverage in the individual or small group market that is renewed for a policy year starting between January 1, 2014, and October 1, 2014, and associated group health plans of small businesses, will not be considered to be out of compliance with the market reforms,” according to a letter CMS sent to state insurance commissioners.

Eight states have said they will give insurers the option of continuing to offer plans cancelled because they did not meet new insurance plan requirements. Another five states — Arkansas, Florida, Mississippi, Oklahoma and Wisconsin — said they had already allowed insurers to renew plans through 2014 to avoid widespread cancellations.

Most of the remaining states said they are still examining the policy change and conferring with insurers.

Here’s a look at what insurance commissioners said in the seven states not complying:

  • Georgia. Commissioner Ralph Hudgens (R) said, “While I encourage insurers to offer consumers as many options as permitted, I lack the statutory authority to force insurers to provide the stop-gap measure that the President created yesterday. Insurance companies have spent years preparing for Obama’s law, now the President has given them six weeks to temporarily undo its damage.”
  • Massachusetts. “To change course at this time, and delay certain market reforms, could cause confusion and significant market disruption,” Insurance Commissioner Joseph Murphy said Nov. 18.
  • Minnesota. “Making the program changes offered by the president last week would be unworkable for your members and would likely cause more expensive health coverage for Minnesotans,” Gov. Mark Dayton (D) wrote to the Minnesota Council of Health Plans, the Duluth News-Tribune reported Nov. 19.
  • Rhode Island. “All plans available in 2014, whether through HealthSource RI or in the private market, have been through a rigorous review process designed to ensure that they meet the standards set forth in the Affordable Care Act,” said a Nov. 15 joint statement from Rhode Island Health Insurance Commissioner Kathleen Hittner, M.D., and HealthSource RI Director Christine Ferguson. “We have decided to continue in the direction we are going, and therefore will not be adopting the option made available to us by the President.”
  • Texas. According to multiple news reports, Insurance Commissioner Julia Rathgeber said, “Because Texas is not enforcing the Affordable Care Act, it remains to be seen how President Obama's executive order will impact the marketplace and consumers. Whether a company offers or withdraws a policy is a business decision for that company. We will be closely monitoring the impact of these latest developments on consumers and the industry.”
  • Vermont. Gov. Peter Shumlin (D) said, "This is a state by state decision and the state of Vermont has made the decision to continue with its expanded options plan which allows current individual purchasers (direct pay, Safety Net, Catamount and sole proprietors) to extend their existing policies through March 31, 2014….The state of Vermont is confident that the State’s current options plan will meet the coverage needs of Vermonters in 2014.”
  • Washington state. Insurance Commissioner Mike Kreidler (D) said, “I do not believe his [Obama’s] proposal is a good deal for the state of Washington. In the interest of keeping the consumer protections we have enacted and ensuring that we keep health insurance costs down for all consumers, we are staying the course. We will not be allowing insurance companies to extend their policies.”

And here is a summary of state insurance commissioners’ responses in other states:

States that intend to comply:

  • California. Insurance Commissioner Dave Jones (D) issued a statement requesting all California health insurers and HMOs “to provide current customers the option to renew their existing non-grandfathered policies for 2014 and issue new notices to policyholder advising them of their options.”
  • Colorado. “In the coming days and weeks we will work closely with insurance carriers in Colorado regarding any changes that need to be made as a result of the President’s comments. We will also work with consumers to alert them of any possible changes,” the Division of Insurance said.
  • Hawaii. “State Insurance Commissioner Gordon Ito is requesting that Hawaii’s insurance carriers continue health plans that faced non-renewal by the end of the year,” the insurance department said.
  • Kentucky. Gov. Steve Beshear (D) said “Kentucky will comply with the President’s request to allow Kentucky’s insurers the option of determining whether to extend existing health insurance policies to current policyholders for one more year.”
  • Nebraska. Insurance Director Bruce Ramge told the Omaha World-Herald that his office would work with insurance companies to find a way to comply with Obama’s policy change.
  • North Carolina. Insurance Commissioner Wayne Goodwin said he “is allowing for an expedited review process at the Department of Insurance so that insurers can quickly establish 2014 rates and begin offering the plans that were going to be cancelled to current policyholders.”
  • Ohio. Mary Taylor, director of Ohio’s insurance department, said she would give insurance companies the option to keep offering consumers plans that would otherwise be canceled.
  • Oregon. The state’s insurance division on Nov. 18 issued guidance to insurers requiring them to notify the division by Nov. 22 of their plans to extend noncompliant plans. Insurers that choose to do so must notify members by Nov. 29 and may extend plans for three months to March 31, 2014, or for one year to Dec. 31, 2014.

States that already had made changes to comply:

  • Arkansas. According to a statement from Arkansas Insurance Commissioner Jay Bradford, “The Arkansas Insurance Department took steps on March 15, 2013, to provide carriers the option to extend current plans by issuing Bulletin 7-2013. The majority of carriers writing individual health insurance policies in Arkansas have chosen to extend coverage through December 30, 2014. This action allowed Arkansans to keep their existing health insurance coverage through calendar year 2014.”
  • Florida. “Most health insurers in Florida have already voluntarily extended coverage for affected policyholders through 2014. However, for those companies that did not, the Office pledges to work with any company that chooses to continue coverage in accordance with the President’s transitional policy, and to facilitate the continuation of coverage for Floridians,” said the Florida Office of Insurance Regulation Commissioner Kevin McCarty.
  • Mississippi. Insurance Commissioner Mike Chaney said, “In Mississippi we took steps several months ago to ensure that these reforms would have initial minimal impact on policyholders in our state. We allowed and encouraged the carriers to extend their plan years and coverage periods until December 2014, allowing our citizens to keep their existing coverage with minimum rate increases and with more choices. We do not expect that the President’s actions announced today will have any major impact on our state.”
  • Oklahoma. Insurance Commissioner John Doak said, “We recognized the possibility of cancellations early on and worked with the state’s largest health insurance companies to lessen the consumer impact. That collaboration led to our approval of their requests to modify policy renewal dates, which allowed a majority of Oklahoma policyholders to keep their existing coverage through 2014.”
  • Wisconsin. According to the Journal Sentinel, Wisconsin Deputy Insurance Commissioner Dan Schwartzer said the state already allowed insurers to let customers renew their existing health plans this year, thereby avoiding the cancellations issue.

States that say they are still evaluating the change:

  • Alabama
  • Alaska
  • Connecticut
  • Idaho
  • Illinois
  • Indiana
  • Maine
  • Maryland
  • Michigan
  • Missouri
  • Montana
  • Nebraska
  • Nevada
  • New Hampshire
  • New Jersey
  • New York
  • North Dakota
  • Pennsylvania
  • South Carolina
  • South Dakota
  • Tennessee
  • Utah
  • Virginia
  • Washington, D.C.
  • Wyoming

States that have made no publicly available comment:

  • Arizona
  • Delaware
  • Iowa
  • Louisiana
  • New Mexico

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