SPRINGFIELD - Barack Obama's home state is following the president's lead on Obamacare by allowing health insurance companies to extend once-canceled policies that do not meet Obamacare standards, while other blue states are backing away.
Last Friday, after a public outcry from millions of individual policy holders' plans whose plans were cancelled, President Obama announced the federal government would allow policies to be renewed for a year if the companies agreed to extend the plans.
Following the President's announcement, the Illinois Department of Insurance said last Friday Illinois will allow insurance providers to renew for one year plans sold on the individual marketplace that do not meet the coverage levels required by the Patient Protection and Affordable Care Act. The new law requires that insurance plans offer a set base level of coverage in ten categories, including prescription coverage, ambulatory care and preventative care.
But states like California say the President's change of mind won't work for them.
Recognizing the impracticality and illegality of President Obama's proposed "fix" for insurance policies canceled due to the Affordable Care Act's coverage mandates, the board of Covered California, the state's health insurance exchange, voted 5-0 against extending the 1 million California health care plans that were dropped under the law, Investor's Business Daily reports.
The Golden State follows several other blue states — including New York, Washington, Rhode Island and Minnesota — that announced they won't go along with the administration's proposed solution. State insurance commissioners make it clear that just in practical terms the fix is unworkable in the time available.
Obama's fix allegedly lets insurance companies continue selling the same individual health insurance plans they sold before the law, but only to those who currently own such policies, and only for another year.
"There's no way to make the federal law work without this transition to ACA-compliant plans," Covered California board member Susan Kennedy said. "Delaying the transition isn't going to help anyone; it just delays the problems. I actually think that it's going to make a bad situation worse if we complicate it further."
Covered California also recognized that letting people extend their existing health plans would also create a two-tier insurance system that would keep younger and healthier paying customers out of the ACA risk pool, paying customers that are needed to keep ObamaCare from financially imploding. These are people such as the 20-something male who can't understand why his premium and deductible must increase to give him maternity and pediatric dental care coverage he doesn't need.
Illinois joins Florida, North Carolina, Ohio, Kentucky, Kansas, Oregon, South Carolina, Colorado, Hawaii and Texas in giving insurance companies the choice to renew existing health insurance policies with current policyholders.
“DOI came to this decision based on the concerns raised by Illinois consumers and the guidance from the U.S. Department of Health and Human Services,” Andrew Boron, Director of the Illinois Department of Insurance said. “Allowing companies to renew current plans gives consumers more time to evaluate their options and will provide a smoother transition into the health care coverage system envisioned by the ACA.”
DOI will immediately work with insurance companies who choose to extend the terminated or cancelled coverage to quickly renew such policies. In step with President Obama’s announcement, policies in effect on Oct. 1, 2013, in the individual or small group market, can be renewed for a policy year starting between Jan. 1, 2014, and Oct. 1, 2014.
Insurance companies will not be permitted to sell any new plans after December 31, 2013 that do not meet ACA standards.
