Administrative Fix for Canceled Health Plans Might Be Extended

The Obama administration is said to be considering an extension of up to three years to an administrative policy allowing U.S. residents to keep their health plans even if the plans do not meet minimum coverage requirements under the Affordable Care Act, AP/ABC News reports (Murphy, AP/ABC News, 2/6).

Background

President Obama issued the "fix" in November 2013 following reports that millions of residents nationwide were being notified by their insurers that their existing health policies will be discontinued in 2014 because they do not meet minimum standards under the ACA.

Under the fix, insurers this year are allowed to continue selling such health policies, but they are required to inform consumers that more comprehensive coverage options might be available in the ACA's insurance exchanges. Insurers also have to list the benefits that affected consumers would be going without if they choose to keep their current policies (California Healthline, 1/22).

Details on Possible Extension

On Thursday, some health industry experts and federal officials told the Associated Press that the administration is mulling an extension of up to three years of the November 2013 policy.

However, Avalere Health CEO Dan Mendelson noted that no decision has been made. "The administration is entertaining a range of options to ensure that this individual market has stability to it, and [a three-year extension] would be one thing that they could do," Mendelson said. He added that his company has not been advising the administration on health exchange policy, but he acknowledged that he has participated in informal discussions with officials about the extension.

Separately, Aetna Chair and CEO Mark Bertolini -- during a conference call Thursday with insurance industry analysts on the company's quarterly earnings -- said he had heard that the continuation policy might be extended.

HHS spokesperson Joanne Peters confirmed the report, saying, "We are continuing to examine all sorts of ways to provide consumers with more choices and to smooth the transition as we implement the law. No decisions have been made."

According to AP/ABC News, the extension could help protect some consumers from potentially costly premiums for plans being sold through the ACA's exchanges next year.

Insurers are expected in May to submit fiscal year 2015 premium rates. Although coverage from plans purchased in the exchanges for 2014 took effect last month, insurers have not yet received adequate medical claims data for the plans. As a result, insurers could raise premium rates for FY 2015 to ensure they collect enough revenue to cover higher-than-expected medical claims (AP/ABC News, 2/6).