Nebraska's biggest health insurer could make a last-minute switch and offer 2013-style benefits to its individual customers under a new opinion from State Insurance Director Bruce Ramge.
But Blue Cross Blue Shield of Nebraska has only five business days — until 5 p.m. Dec. 2 — to decide whether individual policyholders will have the option of paying for another year with their existing insurance policies that don't meet the standards of the federal Affordable Care Act.
That option could happen even though Ramge said that a recent statement urging extensions of policies by President Barack Obama has “no legal effect” on insurance regulation in Nebraska. He said no policies that fail to meet the new federal standards will be issued or renewed after Jan. 1.
Any renewals of 2013 policies would have to take place on or before Dec. 31 and would cover claims for a year — possibly with increased monthly premiums, Ramge said in an official notice to insurance companies. He urged companies to notify his office immediately if they plan to offer early renewals and to file all the necessary papers by the deadline.
It's unclear whether someone who already bought one of the new policies would be able to drop that and renew an old policy instead.
His notice applies to all the companies, but it was Blue Cross that told the estimated 88,000 people covered by its individual policies in Nebraska that their policies would end Dec. 31 and needed to be replaced with policies that comply with the Affordable Care Act, also called Obamacare.
Blue Cross said Friday that it was analyzing Ramge's notice and would “inform our customers about any changes to their coverage options as soon as possible.”
Coventry Health, a division of Aetna, said it already has offered to allow its individual insurance customers to buy plans with a December renewal date, and they have until Wednesday to decide. Two other companies offering Obamacare-compliant coverage in Nebraska didn't have 2013 policies.
Consumers in Nebraska and other states have complained that the president promised the law would let people keep their existing insurance policies if they wanted to.
After it became clear that many 2013 policies didn't qualify for a “grandfather” option under the law, Obama said on Nov. 14 that insurance companies and states have a “transitional” option of extending 2013 individual policies into 2014. He said the federal government would not consider the 2013 policies to be out of compliance with the law.
Since the president's statement, some state regulators have said insurance companies could extend existing contracts into 2014 and some have said they could not. Earlier this week, Nebraska Gov. Dave Heineman, a Republican, said Obama's decision to allow extensions might be illegal under the federal law.
Ramge said in his notice Friday that the president's statement “has no legal effect for the purposes of insurance regulation in Nebraska.”
“Despite the lack of enforcement by the federal government,” Ramge wrote, the Insurance Department's opinion is that individual and small-group policies that take effect on or after Jan. 1 must comply with the Affordable Care Act.
But he said insurers already have had the option under Nebraska law of renewing policies with existing terms if they go through a review procedure with the Department of Insurance. Those reviews usually are conducted earlier in the year and take months.
Now, Ramge said, his office will conduct expedited reviews of requests from insurance companies that want to change premium rates for policies they renew on or before Dec. 31. Any increases in premiums must be “reasonable” as required by the federal law, he said.
“Consumers should be aware that while the terms and conditions of the policies that are renewed early will have the same plan benefits, the insurance company may increase a consumer's premiums,” Ramge wrote.
If companies end up offering renewals during December, he said, consumers may want to talk to insurance agents or brokers before deciding to renew or to shop for other insurance options.
In Iowa, most individual policies have been renewed and will remain in effect until later in 2014, so few people are facing the choice now of switching to policies that meet Affordable Care Act requirements.
|Where states stand on renewals|