AUGUSTA, Maine — Many Mainers facing cancellation of their health insurance can keep plans that don’t comply with Obamacare for another year, under a decision issued Tuesday by Maine’s top insurance official.
The decision by Maine Insurance Superintendent Eric Cioppa affects at least 8,500 Mainers who buy their health insurance from Anthem BlueCross BlueShield in the “individual market,” made up of consumers who can’t access coverage through work or government programs such as Medicaid and Medicare. Those Anthem policyholders now have another year to find a plan that complies with the Affordable Care Act, often called Obamacare.
“This decision is meant to give several thousand Maine policyholders another option for 2014,” Cioppa said in the release. “It will also result in a smaller premium increase for those choosing to continue their current plan, and provide more time for those individuals to evaluate plans for future years.”
Cioppa’s decision to allow Anthem to renew plans due for cancellation came two weeks after President Barack Obama asked states to allow insurance companies to renew through 2014 policies that fall short of new requirements set forth in his signature health reform law. The move was a retreat from a central goal of the law, to put an end to insurance plans that don’t offer adequate coverage. Obama proposed the fix amid the prospect that millions of Americans could see their plans canceled, despite his promises that Americans could keep their plans if they liked them.
The onslaught of cancellations nationally came about because insurers must stop selling plans that don’t meet certain requirements of the health reform law. The existing plans may not cover maternity care, for example, one of several required health benefits, or may carry overly high deductibles.
While the federal government won’t punish insurers for renewing the noncompliant plans, carriers also need the greenlight from state regulators. Insurance officials are under the gun to decide, with just five weeks to go before the policies would take effect on Jan. 1, 2014.
Even with Cioppa’s decision, Anthem could have chosen not to renew the plans, but the health insurer said in a statement late Tuesday that it will keep offering the noncompliant plans in Maine.
Some of Anthem’s individual policyholders already could choose to keep their plan, provided their coverage was “grandfathered” — or in place before the health reform law passed in March 2010 and unchanged since then — and exempt from many of its provisions.
For 8,500 other “nongrandfathered” Anthem customers with newer plans, their coverage faced cancellation. The largest insurer in Maine’s individual market, Anthem notified its Maine policyholders that their plans would be canceled and replaced with the most comparable ACA-compliant plan, according to the state insurance bureau.
Those cancellations are now on hold for a year.
“We are pleased that the Maine Bureau of Insurance has allowed us to extend to our nongrandfathered individual members the opportunity to stay on their existing plan, an opportunity they did not have before,” Rory Sheehan, an Anthem spokesman, said in the statement.
Policyholders who choose to renew the plans can keep their current network of doctors and health providers, the insurer said.
Allowing the nongrandfathered plans to continue into next year will reduce the anticipated premium increase for plans that were already grandfathered, Cioppa said in a press release. The pool of people covered by both types of plans will increase substantially, allowing costs to be spread out among more policyholders and dropping the premium for the grandfathered plans, according to the insurance bureau.
Anthem had proposed an average premium increase of 16.5 percent for its grandfathered plans. Allowing the nongrandfathered plans to continue means the average premium increase in 2014 for all individual policies is expected to total 12.6 percent, according to the release.
With Tuesday’s decision, Anthem will be required to inform consumers about the additional benefits their plan lacks and let them know about other coverage options through the Affordable Care Act’s online marketplaces. Those consumers can choose a different plan and may qualify for federal subsidies based on their income through the marketplace, the insurance bureau noted.
Premiums for plans that comply with the ACA may be lower in some cases, but could be much higher for some, particularly those who now have a high-deductible plan, according to the bureau.
Consumers also have a little more time to shop for a plan. The health reform law originally required Americans to select a health plan by Dec. 15 to get coverage for Jan. 1, 2014. Consumers now have until Dec. 23.
Mega Life and Health, the other major player in Maine’s individual market, at the end of October sent early renewal notices to its nongrandfathered policyholders, affecting about 6,200 individuals. Customers were told their plans would be renewed on Dec. 31, and those who wanted to keep their coverage could hang onto it through the end of next year, with some minimal changes required under the Affordable Care Act, according to the bureau.
Tuesday’s decision does not affect Mega policyholders in Maine. It also doesn’t benefit consumers who buy health insurance through the state’s Dirigo Health program. All Dirigo policies are due for termination at the end of the year, which will still become a reality unless the Dirigo board issues an extension, a move now under discussion, according to Joe Bruno, chair of the board of trustees.
With the bungled rollout of Healthcare.gov, the federal website for new insurance marketplaces under the ACA, Dirigo policyholders facing cancellation haven’t been able to sign up for new coverage, Bruno said. The board will discuss at a Dec. 9 meeting the possibility of extending Dirigo coverage for another month, he said.
Many of Dirigo’s 7,800 policyholders were confused by Obama’s Nov. 14 announcement that Americans could keep their health plans, Bruno said.
“People think that means Dirigo and it doesn’t,” he said.