On November 14, President Obama announced that insurance companies whose existing individual plans do not meet the requirements of the Affordable Care Act (ACA) can continue to be offered for 2014. The change is intended to address recent well-publicized revelations that millions of people have received cancellation notices from their health insurers, despite the President’s past statements that those who like their healthcare plan could keep it. Although never truly within the government’s power to guarantee, because nothing in the ACA prohibits employers from dropping coverage or changing health plans, or health insurers from changing or discontinuing their offerings, President Obama’s pledge had become increasingly politically sensitive.
The change will be made possible by expanding a “grandfather” provision in the ACA that permits plans that existed before the law was enacted, and have not changed significantly since then, to remain in force. That provision can now apply to any plan in which individuals are currently enrolled, so long as the insurer notifies its insureds which ACA requirements the renewed plan does not meet and informs them that additional insurance options are available through the state insurance exchanges created under the ACA.
A fact sheet released by the White House states that the Department of Health and Human Services (HHS) will consider extending the one-year fix beyond 2014.
Trade associations for insurance companies generally expressed concern, pointing out that premiums for 2014 have already been set based on insurers’ expectations as to which consumers would be buying plans in the new exchanges. Karen Ignagni, CEO of America’s Health Insurance Plans, said in a statement, “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." In response to such concerns, the White House’s fact sheet said that HHS will "adjust the temporary risk corridor program which is designed to stabilize premiums as changes are implemented."
Lawmakers of both political parties have proposed bills that would address the cancellation issue in different ways. The latest debate has arisen alongside continuing widespread criticism of the federal government for its flawed rollout of the HealthCare.gov “Health Insurance Marketplace” website in October.