Q & A: Health insurance change explained - LivewellNebraska.com
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Q & A: Health insurance change explained

Q: What exactly did President Obama do?

A: He gave insurance companies and state regulators the option of extending 2013 individual health insurance policies into 2014 even if the policies don't have all the requirements of the Affordable Care Act, also known as Obamacare. He said the companies would have to notify consumers of the alternatives and explain where the extended policies fall short of Obamacare in coverage.

Q: Can he do that?

A: The Obama administration considers it an enforcement matter, which is a duty of the executive branch.

Q: If I don't have one of those policies, could I buy one for 2014?

A: No, only people who already have the policies would be eligible.

Q: Does this affect my group insurance policy through my work or my Medicare?

A: No.

Q: Will this happen in Nebraska and Iowa?

A: It's up to the insurance companies and state regulators. Blue Cross Blue Shield of Nebraska, the state's largest insurer, said it would decide within a few days whether to try it, given the short amount of time left before Dec. 31. Coventry Health Care also is considering the issue. Most policies in Iowa have already been extended.

Q: Can't companies just keep the old policies in effect?

A: Insurers calculate premiums for each coming year based on expected medical claims, the terms of each policy such as deductibles and co-payments, and other factors. Because some 2013 policies didn't meet Obamacare standards, the companies didn't calculate rates for 2014, set policy terms or submit them for state approval. In effect, the policies don't exist after Dec. 31.

Q: Why are the state agencies involved in this?

A: The Nebraska Department of Insurance, the Iowa Division of Insurance and similar state agencies are the primary regulators of insurance. They make sure insurance companies set rates that will allow them to pay claims that are due and follow the law.

Q: So how could the companies extend the policies?

A: The companies and state regulators would have to adopt a sped-up system to make the calculations and approve new versions of the policies, repricing them as needed. The process usually takes months; Dec. 31 is now 46 days away.

Q: Are the 2013 policies really much different?

A: Yes. All the new policies, for example, cover maternity care and treatment for mental health diseases and substance abuse, and many of the 2013 policies don't. Premiums, deductibles and out-of-pocket maximums are higher for many people, although not all of them. Some new policies have different networks of physicians and hospitals.

Q: Why are insurance companies so worried about extending the old policies?

A: Because if only people with high medical expenses buy the new, higher-benefit policies, the high claims would overwhelm total premiums paid in, creating huge losses that would eat into the companies' reserves for claims payments. Insurance only works if lots of people — sick and well, young and old — buy policies.

Q: What about people who have already bought Obamacare policies?

A: Buying insurance is like signing a contract, and both sides usually have to live with the result.

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