Calif. Health Plans Divided Over Renewing Policies Through 2014

Consumer advocates and insurers participating in California's health insurance exchange are urging state lawmakers to ban other health plans from renewing individual policies beyond Jan. 1, 2014, thereby avoiding changes under the Affordable Care Act, the Los Angeles Times reports (Terhune, Los Angeles Times, 6/26).

Background

The exchange -- named Covered California -- primarily will serve individuals and small businesses.

Supporters hope that the exchange will function similarly to websites like Amazon and Expedia so that users will be able to choose among various health plans through an easily navigable online store.

The exchange is expected to open for registration in October, and an estimated five million people will purchase plans through the exchange in 2014 (California Healthline, 6/26).

Details of Concerns

Some insurers are planning to use an ACA provision allowing individual policies to be extended through 2014, promoting the idea that consumers can keep their current coverage and avoid potential rate increases tied to implementation of the law.

However, critics of this approach are concerned that it could allow insurers to target younger and healthier individuals and keep them out of the exchange, where they are needed to keep costs down.

Insurers participating in Covered California -- such as Anthem Blue Cross, Blue Shield of California and Kaiser Permanente -- are lobbying state lawmakers to bar existing individual policies from being renewed into next year.

Darrel Ng, an Anthem spokesperson, said that a "legislative solution" would "level [the] playing field between those selling individual insurance in the exchange and those who aren't."

Defense of Policy Extensions

Cigna -- which is not participating in the exchange -- said it plans to change the renewal dates for all of its individual and family plans to Dec. 31 so that people can choose to have the same policies in 2014.

Joseph Mondy -- Cigna spokesperson -- said that the ACA "was written to provide folks with that option," adding, "We think our approach is pro-consumer."

State Insurance Commissioner Dave Jones (D) said that concerns about the extension of certain policies through next year are exaggerated and that consumers deserve more flexibility. He said, "People have been told that they can keep their existing health coverage into 2014, so I am concerned about a change in state law that would undermine that" (Los Angeles Times, 6/26).