Grandfathering health plans creates uncertainty
Posted November 14, 2013
Updated November 15, 2013
Raleigh, N.C. — President Barack Obama's decision Thursday to allow people to remain for at least a year on health plans that don't meet the minimum requirements of the Affordable Care Act left many questioning the impact and feasibility of the switch.
More than 473,000 North Carolinians faced the prospect of having their existing health coverage canceled in January because the plans don't provide the "minimum essential benefits" outlined under the new health care law. Outcry over the cancellations, especially after Obama repeatedly promised that people who liked their existing insurance could keep it, prompted the sudden reversal Thursday.
"What we want to do is to be able to say to these folks, 'You know what, the Affordable Care Act is not going to be the reason why insurers have to cancel your plan,'" Obama said during a news conference to announce the change.
Amy Williamson, whose Blue Cross Blue Shield of North Carolina plan was slated for cancellation, said the move didn't bring her much comfort.
"I would like to know before Dec. 1 whether or not I have the option to go back to the old plan I had," Williamson said, noting she would need to enroll in a new plan by Dec. 15 to obtain coverage by the start of January.
"Not knowing how much I'm going to pay Jan. 1 is kind of nerve-wracking," she said.
The single mother said she prefers keeping her old health plan, which would save her at least $100 a month in premiums over plans offered through North Carolina's online insurance exchange. But she's unsure whether insurers can make the change in such a short time frame.
"I think it's a quick fix he's trying to do," she said of Obama. "Maybe it will help some people in some states, but I don't think it will help me."
Blue Cross Chief Executive Brad Wilson said resurrecting any old policies to grandfather them for 2014 would have to be approved by the state Department of Insurance because it would necessitate a rate change.
"We had already been actively exploring options to provide some relief to customers who were faced with losing a plan they liked," Wilson said. "This additional flexibility could help insurers take steps to protect their customers for another year."
Aetna, which owns Coventry Health Care of the Carolinas, the only other insurer aside from Blue Cross to offer plans through North Carolina's exchange, also backs Obama's move but said much work needs to be done quickly to make it happen.
"We will need cooperation and expedited approval from state regulators to remove barriers that would make it difficult to make this change in such a short period of time," Aetna spokesman Walt Cherniak said in a statement. "State regulators will need to allow us to update our policies and secure appropriate rates so we can get these plans back in the market."
Insurance Commissioner Wayne Goodwin said the DOI is gathering and analyzing data to figure out how best to protect consumers.
Although the grandfathered plans could benefit some, insurance industry officials said pulling people out of the exchanges will likely lead to higher premiums for others.
"Changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers," America's Health Insurance Plans warned in a statement.
Louisiana Insurance Commissioner Jim Donelon, president of the National Association of Insurance Commissioners, also said Obama's proposal could lead to market disruptions next year and beyond.
"It is unclear how, as a practical matter, the changes proposed today by the president can be put into effect," Donelon said. "In many states, cancellation notices have already gone out to policyholders, and rates and plans have already been approved for 2014."
Members of Congress were quick to either criticize or laud the president, depending on their political stripes.
"President Obama’s attempt at political damage control today did absolutely nothing to provide relief for the damage already inflicted on individuals who already had health care coverage and the entire health care industry as a result of the Affordable Care Act," Republican U.S. Sen. Richard Burr said in a statement. "If anything, the president only dug himself further into a hole by putting forth an unworkable proposal that will amount to nothing more than another broken promise."
"While I remain concerned by difficulties implementing the Affordable Care Act, what we will not do is use these challenges as an excuse to repeal the law, which House Republican leaders called for yet again today. I am unwilling to turn my back on the millions of Americans who have been waiting for years to access quality insurance," Democratic 4th District Congressman David Price said in a statement.