Covered California Faces Barriers To Lifting Health Plan Cancellations

California could face several barriers if officials decide to allow insurers to continue selling policies in 2014 that do not meet the Affordable Care Act's minimum coverage requirements, according to an expert, the Sacramento Bee reports (Cadelago, Sacramento Bee, 11/20).

Background

About one million individual policyholders in California recently were notified that their current insurance plans will be discontinued at the end of the year because the policies do not meet minimum coverage requirements under the ACA.

Last week, Obama announced a plan that would allow insurers in 2014 to continue selling insurance plans even if they do not meet the law's requirements.

The proposal also would require insurers that extend such plans to inform consumers that more comprehensive coverage options might be available in the health insurance exchanges and to list the benefits they would miss out on if they choose to keep their current policies.

California Insurance Commissioner Dave Jones (D) has urged Covered California to implement Obama's proposal (California Healthline, 11/19).

Details of Barriers

However, Patrick Johnston, president and CEO of the California Association of Health Plans, said the change "could conflict with state law," which already has incorporated several components of the ACA.

As a result, the change could make the state vulnerable to legal action from outside parties, according to the Bee.

In addition, Johnston said that allowing insurers to continue selling the less comprehensive plans could "pos[e] logistical complications" because rates and required benefits for next year already have been set by Covered California.

If California allows insurers to keep selling such plans, insurance companies would have to send another round of letters to their policyholders under an already tight deadline for preparing the marketplace, the Bee reports.

Johnston also said that the health reform law's underlying premise -- to have younger, healthier individuals offset premium costs for older, sicker individuals -- has been put in jeopardy by Obama's announcement.

Covered California officials are expected to consider whether to accept Obama's plan during a meeting on Thursday. Health insurers are slated to testify during the meeting (Sacramento Bee, 11/20).