Insurance Commissioner Dave Jones yesterday laid out the reasons for the premature cancellation of 104,000 individual market health insurance policies by Anthem Blue Cross, and what led the California Department of Insurance to temporarily reinstate those policies.
Anthem was cancelling non-grandfathered individual-market policies, the kind of policies people will be able to get with more benefits and possibly lower rates from Covered California. Anthem still plans to cancel them, but it jumped the gun on timing by making the policies end Dec. 31, Jones said.
The insurer should have given at least 90 days’ notice before cancelling policies, Jones said.
“Because Anthem did not give 90 days’ notice to 104,000 policyholders as required by law,” Jones said, “Anthem agreed to provide 104,000 policyholders with the option to extend their current policies until Feb. 28, giving them the opportunity to keep their doctors and hospitals and keep their current rates.”
Those 104,000 policyholders have until Dec. 15 — the deadline to sign up for exchange coverage to start Jan. 1, 2014 — to notify Anthem if they would like to keep their policies until the end of February 2014.
Anthem has until Nov. 15 to send out the new notices, with the 90-day provision.
CDI officials said they had some reports that people received cancellation notices at the beginning of November. Setting the end date of those individual policies at Dec. 31, Jones said, was a mistake and the result of an Anthem computer glitch.
Last week Blue Shield was required to extend policies for 115,000 policyholders after failing to comply with notice requirements, Jones said.
According to Janice Rocco, deputy commissioner at CDI, there are approximately one million Californians with policies that will be cancelled.
“This is the estimated number of Californians in non-grandfathered individual market policies as reported by health insurers and health plans to CDI and DMHC [Department of Managed Health Care],” Rocco said.
According to Rocco, Anthem officials had no problem accepting the CDI requirement. “Anthem did not object when the department asked Anthem to extend the policies of those policyholders and send new notices,” she said.