The Patient Protection and Affordable Care Act intervenes massively in the individual and small group health insurance markets. Effective January 1, 2014, it establishes standards on what health plans must offer, who can buy them, when and where they can purchase coverage, and who is eligible for subsidies to defray monthly premiums.
With any market overhaul on the scale of the ACA’s, there is bound to be disruption of the existing marketplace and push back from those adversely affected. Among the first are those who have individual plans that don’t comply with the new ACA coverage standards issued after March 23, 2010 and are thus not grandfathered under the ACA’s grandfathering provision. They are being hit with a double whammy. Not only are these policies being shut down by the end of the year. People who have them are being informed they will have to replace them with richer plans that meet ACA standards – and those more robust plans will cost them more. Their displeasure prompted the Obama administration to accommodate their concerns by giving states the option to keep those plans well into 2015.
So far, a lot of the states including most recently, California, have instead decided they will carry on and let the market sort it out given so little remaining time for regulators, state-operated health exchanges and health plan issuers to make the needed adjustments during the year-end holiday period that would only confuse consumers. State insurance commissioners cited a lack of consensus on the issue in declining a White House meeting this week.
Moreover, some consumers will still have some options to keep their existing coverage if their plan issuer takes advantage of an ACA loophole that allows issuers to “early renew” coverage by December 31, 2013, thereby extending their coverage for as late as December 31, 2014. Still, not everyone with these plans will be happy as they too will likely come with higher premiums thanks to the relentless underlying trend of rising health care costs.
Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email