Jones: Blue Shield Delay Unlikely To Affect Other Exchange Plans
On Tuesday, California Insurance Commissioner Dave Jones (D) said a required delay in the cancellation of 115,000 Blue Shield of California health plans that do not meet the Affordable Care Act's requirements is unlikely to affect other insurers participating in the state health insurance exchange, Politico reports (Cheney/Norman, Politico, 11/5).
Certain plans will be cancelled under the ACA because they do not meet the law's minimum coverage levels. Exchange officials say that the cancellations also will ensure that insurers do not keep the healthiest individuals out of the state health insurance exchange.
However, about half of state residents who have policies through the individual market will not be affected by the law because they have grandfathered plans that were purchased before March 2010.
Peter Lee, executive director of Covered California, told the San Francisco Chronicle editorial board that as many as 900,000 state residents could be forced to switch plans under the ACA.
Several insurers participating in California's exchange already have sent notices to some of their policyholders whose current health plans will be canceled, including:
- Blue Shield of California;
- Kaiser Permanente; and
- Health Net.
Details of Delay
On Monday, Blue Shield of California officials said that the California Department of Insurance has required the insurer to delay for three months the cancellation of more than 115,000 health plans that do not meet the ACA's requirements (California Healthline, 11/5).
According to Jones, the move came after Blue Shield took advantage of a "loophole" in state law that allowed them to submit their plans to a regulator who oversees managed care plans. However, that shift required the insurer to give policyholders a 180-day notice of cancellation, and Blue Shield only provided a 90-day notice.
DOI threatened to file a lawsuit against the insurer if it did not provide its policyholders with an additional 90 days to comply with state law (Politico, 11/5).
Steve Shivinsky, a spokesperson for Blue Shield, said the plan cancellations now must take place by March 31, 2014.
Blue Shield officials said the delay carries "significant risks [for] policyholders," including:
- Potential liability for two deductibles; and
- Loss of tax credits or subsidies available through the state health insurance exchange (California Healthline, 11/5).
Implications for Other Insurers
During a press conference on Tuesday, Jones said that other insurers participating in Covered California likely will not offer similar extensions.
"I don't think, short of other legal violations, that [other] health insurers will give people more time," Jones said (Politico, 11/5).
Jones Criticizes Cancellations
Jones also said the state insurance exchange "made a bad decision" by requiring insurers to cancel some coverage by the end of the year, the Los Angeles Times reports.
"I don't think it was necessary," Jones said, adding, "I think people should be given the opportunity to stay in their current plans for another year. ... The Dec. 31 cutoff for individual policies in California didn't have to happen."
Jones questioned whether allowing individuals to keep their current policies would have been "fatal to the risk pool" in the exchange (Terhune, Los Angeles Times, 11/5).
He said that Blue Shield policyholders would save $28.6 million through the end of March 2014 if they stay on their current plans instead of switching to higher-cost policies that the insurer has proposed as a replacement (Politico, 11/5).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.