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Q&A: Canceled Insurance Policies May Be Restored

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Reviewed by Sarah Goodell

WebMD Health News

Nov. 18, 2013 -- Under a policy shift announced by President Obama this week, insurance companies will be allowed to renew several million health insurance policies they had canceled or were planning to cancel by the end of 2013.

The policies in question don’t cover the range of benefits required by the Affordable Care Act starting Jan. 1, 2014. That’s when most health plans have to cover 10 essential health benefits, such as hospitalizations, prescription drugs, mental health services, and maternity. The plans also must have a limit on how much people have to spend out of pocket for the year.

Many plans sold on the private market in recent years don’t meet those requirements.

If you’re covered by one of these plans, you might have received a notice from your insurer telling you that it’s being discontinued.

Here, WebMD answers questions about what this policy shift means to you.

How many people are affected by this?

Roughly 15 million people buy their own health insurance on the private market. It’s tough to pin down an exact number, but it’s estimated that about half are getting cancellation notices, says Dylan Roby, director of health economics and evaluation research at the UCLA Center for Health Policy Research.

Does this mean I can definitely keep my current plan?

Not necessarily.

First, state insurance commissioners have to give insurers the green light. Soon after President Obama announced his plan, Washington state’s insurance commissioner said he will not allow companies to renew current health plans into 2014.

Jim Donelon, president of the National Association of Insurance Commissioners and insurance commissioner for Louisiana, also expressed concern with Obama’s plan. “This decision continues different rules for different policies and threatens to undermine the new market.”

In addition, a handful of states passed laws that would require insurers to end all plans that don’t comply with the Affordable Care Act by the end of this year. Even if officials wanted to allow insurers to go along with Obama’s proposal, state law would prevent it.

Other state insurance commissioners have signaled their support. Florida, Kentucky, and Ohio, for example, will allow late renewals.

If state insurance commissioners agree, it’s then up to the insurance companies to decide whether to reverse the cancellations. That’s not an easy task, given the late date. According to Roby, that would require “a lot of effort for a temporary stay” on the part of insurance companies.

Still, he says, insurers may face a lot of pressure from customers interested in holding onto the plan they have.

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