Affordable Care Act: Cancellations Explained
Q. How are insurers picking policies to discontinue?
A. Some consumers fear they are being targeted because they are unhealthy or otherwise unprofitable for an insurance company. Kansas Insurance Commissioner Sandy Praeger said insurers can only discontinue entire blocks of business and cannot simply pick and choose certain customers to cancel. Those whose policies are canceled can sign up instead for a new plan and can’t be rejected because of their health. Insurers say they are ending policies that don’t meet the law’s standards or were not grandfathered. And some of those are profitable plans: Kaiser Permanente in California, for example, says the biggest block of policyholders losing their current coverage were enrolled in a popular $4,000 deductible plan with no maternity benefits that was doing so well that they had not had to raise rates in several years. They actually had to send rebates to policyholders last year under a provision of the health law that requires insurers to spend at least 80 percent of enrollees’ premiums on medical care or issue rebates. (KHN is not affiliated with Kaiser Permanente).
Q. My insurer says if I renew before the end of the year, I can keep my current plan. What does this mean?
A. In some states, insurers are offering selected policyholders a chance to “early renew,” meaning they can continue their existing plan through next year, even if it doesn’t meet all the law’s standards. If you choose this option, your premium may still go up, but the cause would be medical inflation, rather than the need to add benefits because of the health law. Not all states allow early renewals. Fearing insurers would offer such renewals only to their most profitable plans, a handful of states, including Illinois, Missouri and Rhode Island, barred insurers from doing it.
Q. Why are premiums changing?
A. Under the old rules, insurers could decide whether to accept you - and how much to charge -- based on answers to dozens of medical questions. You no longer have to fill out those forms. Starting Jan. 1, insurers can no longer charge women more than men, reject people who are sick or charge them more and can charge older people only three times more than younger ones. They’re also adding new benefits.
Wed, Oct 30 2013