Obamacare and you: Obama shift may set off insurance scramble - LivewellNebraska.com
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Obamacare and you: Obama shift may set off insurance scramble

Insurance experts are determining whether and how to put into effect a change in how the federal Affordable Care Act is administered, announced Thursday by President Barack Obama.

The change might mean that thousands of Nebraskans could keep their current individual health insurance policies, at least for a time, rather than seeing their policies canceled and replaced by new policies that meet the standards set by the federal law also known as Obamacare.

In an abrupt turnaround, the president said insurers would have the option of continuing their 2013 policies for current individual customers. Until now, those policies were ruled out by the law because they don’t provide all the coverages required by Obamacare.

It’s unclear whether consumers in Nebraska and Iowa will have that option. Extending the 2013 old policies would be up to the companies and to state governments, which regulate the insurance industry.
Both would have to scramble to adjust their systems and extend the 2013 policies.

Under Obama’s change, insurers would have to notify customers of the alternative and to explain where the existing policies fall short of the coverage required under the law. New customers couldn’t buy the 2013 plans.

Obama also said the federal website will be “working the way it’s supposed to” Dec. 1, although he couldn’t guarantee perfection.

The president’s changes could apply to 88,000 Nebraskans with individual coverage under Blue Cross Blue Shield of Nebraska, plus an unknown number of people with individual policies from other companies.

Blue Cross sent 45,000 letters in September telling the individuals and families that their policies would end Dec. 31 and that they could choose policies that comply with the Affordable Care Act.

Millions of people in other states received similar notices because of the federal law despite Obama’s earlier pledge that people who liked their health care plans could keep them.

Reaction to the cancellations from consumers and political leaders — including former President Bill Clinton — led to Obama’s decision to change the rules.

Before Thursday’s changes, officials from Blue Cross and the State of Nebraska said they had begun thinking about what would be involved in extending current health plans.

“Things are just too up in the air, and it’s too new of a discussion at this point to say anything definitively,” Blue Cross spokesman Andy Williams said Wednesday.

“I think it would be a challenge to execute,” said Susan Millerick, a spokeswoman for Coventry Health Care, a division of Aetna Insurance. “Nothing is a simple, straightforward path. You’d go back to square one in November with something that’s going to be live in seven weeks.”

Nebraska Insurance Director Bruce Ramge said Wednesday that under his department’s rules, all individual health insurance policies for 2014 already have been reviewed and approved, and that excludes the 2013 policies they replace.

The deadline for insurance companies to submit 2014 individual health insurance policies for state review was last summer.

But Ramge said if there were a call to extend the 2013 policies, his office would work with insurance companies to find a way to comply.

The department’s insurance policy review deadlines are set by the department, not by state law, so changing procedures wouldn’t require new legislation, said Martin Swanson, who oversees Nebraska’s participation in the Affordable Care Act, also known as Obamacare.

Cancellations have been less of a problem in Iowa. Wellpoint, the state’s Blue Cross affiliate and largest health insurer, is not taking part in the Obamacare marketplace. With approval of the Iowa Division of Insurance, Wellpoint asked its customers to renew their policies in December.

That means their policies, which do not have all the provisions required by the Affordable Care Act, will remain in effect through December 2014. After that, policies in Iowa would include the Obamacare provisions.

Many of those new policies have bigger monthly premiums and higher potential out-of-pocket costs for some customers, partly because of expanded benefits.

The Obama administration allowed a year’s delay in the requirement that employers offer health insurance but not the requirement that individuals have insurance, either from an insurance company or a government program such as Medicare.

State officials in California already asked insurance companies to keep old policies in effect to let the Affordable Care Act sort itself out. Anthem Blue Cross of California has agreed to extend some of its 2013 policies for two months because it failed to give the required three-month notice.

But making such changes won’t be easy. Blue Cross replaced about 100 different plans with 14 that meet the new standards, calculating premiums according to expected claims and other expenses.

Blue Cross spokesman Williams said Wednesday that the company didn’t calculate 2014 rates for its old policies because they were due to expire. Extending them into 2014 would require recalculating costs such as medical expense trends and claims experiences, and might result in different premiums.

Those rates would be submitted to the state for approval, a process that usually takes weeks, he said.
Insurance company computer systems are set up to receive premium payments and to pay claims for the new policies, not for extended 2013 policies.

Rates for the new policies are set assuming that a good mixture of healthy and sick people enroll so that premiums will pay for claims. If healthy people keep their old, lower-benefit plans and sick people sign up for the more comprehensive Obamacare plans, the new policies could become big losers for the insurance companies.

Williams said he has no idea of the financial impact of extending 2013 policies. The biggest focus, he said, is “making sure our members and consumers have the coverage they need beginning Jan. 1.”

Coventry spokeswoman Millerick said plans that now are set to expire Dec. 31 would change if they were extended. Premium rates must be recalculated to take medical cost trends and other factors into account.

“The best solution is to get the programs fully functional so consumers can sign up and get the coverage they need,” Millerick said. “We’re focused very closely on working with the federal government as well as other carriers to get the program fully functional.

“Let the people enroll now.”

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