YOU ARE HERE: LAT HomeCollections

California tackles Obama's bid to undo health plan cancellations

November 21, 2013|By Chad Terhune
  • Covered California Executive Director Peter Lee and the five-member board of the exchange will discuss President Obama's proposal on canceled health insurance policies.
Covered California Executive Director Peter Lee and the five-member board… (Max Whittaker / Getty Images )

California’s health insurance exchange should decide Thursday whether insurers can extend 1 million canceled policies or to reject President Obama’s Band-Aid for his beleaguered healthcare law.

Other Democrat-led states, such as Washington and Minnesota, have already refused to go along with the president's controversial proposal for fear that it will undermine their new state-run insurance marketplaces.

A delegation from the National Assn. of Insurance Commissioners met with Obama at the White House on Wednesday to raise similar concerns about this change leading to higher premiums for consumers.

California has been a strong supporter of the president's Affordable Care Act. But state leaders have expressed doubts about the president's idea to extend policies into 2014 that don't meet all the requirements of the healthcare law.

Officials worry that allowing individuals and families to hold onto expiring health plans for another year will keep too many healthier customers out of the broader risk pool that will shape future rates.

Full coverage: Obamacare rolls out

Exchanges need a diverse mix of customers to spread out the costs incurred by sicker patients. To address that issue, the Covered California exchange required its 11 participating insurers to terminate most of their existing individual policies by Dec. 31.

"People could have kept their cheaper, bad coverage, and those people wouldn't have been part of the common risk pool," Peter Lee, executive director of Covered California, said in an interview last month. "We are better off all being in this together. We are transforming the individual market and making it better."

But California Insurance Commissioner Dave Jones has sharply criticized the exchange for imposing that Dec. 31 deadline and called on the agency to back the president's idea.

Some consumer advocates have urged the exchange to stick with its current course. They point out that many policyholders receiving termination notices will get a better deal next year with replacement coverage, either through federal premium subsidies or new limits on out-of-pocket medical expenses.

Individuals earning up to $46,000 annually and families making up to $94,000 may qualify for premium subsidies under the healthcare law.

The five-member board of Covered California, the state exchange, will take up the cancellation issue at a meeting Thursday in Sacramento.

If renewals are allowed, it will then be up to insurers whether to offer extensions and quickly notify customers about that new option.

Enrollment in the exchange runs through March 31, but people must sign up by Dec. 15 if they want new coverage starting Jan. 1.

California is also expected to announce additional enrollment figures Thursday. Last week it said that about 59,000 people had enrolled in private health plans and that an additional 72,000 had qualified for coverage through Medi-Cal, the state's Medicaid program for the poor.


State signs up 131,000 in health plans, Medi-Cal

California exchange is hesitant to extend canceled policies

State insurance chief faults health exchange for cancellations

Los Angeles Times Articles