TOPICS > Politics

Insurers ‘very cautious’ about new move to extend canceled policies

November 15, 2013 at 12:00 AM EST
The House passed a bill putting into law President Obama's fix to let Americans keep their canceled insurance policies. But the bill goes a step further, reports Kwame Holman, allowing insurers to sell new plans to customers that are not ACA-compliant. Hari Sreenivasan gets analysis from Julie Appleby of Kaiser Health News.
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JUDY WOODRUFF: Congress took the first step today toward letting Americans hang on to their current health plans. But the bill that passed the House may be going nowhere fast.

NewsHour congressional correspondent Kwame Holman begins our coverage.

REP. MICHAEL BURGESS, R-Texas: What has been visited upon the American people in the Affordable Care Act will not be resolved by this action today. It is merely to stop the bleeding.

KWAME HOLMAN: The one-page bill pushed through by House Republicans would let those who want to keep or reinstate their health plans. The Associated Press reported more than four million policies have been canceled so far.

Michael Burgess of Texas:

MICHAEL BURGESS: Any good triage doctor knows before they can fully treat or cure the patient, they have to deal with the immediate problems. In this case, they have to stop the hemorrhage of people losing their private health insurance because of the Affordable Care Act.

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KWAME HOLMAN: But the bill also goes a key step further. It lets insurance companies sell new customers plans that fall short of the federal standards. California Democrat Henry Waxman warned that provision would undermine the entire program.

REP. HENRY WAXMAN, D-Calif.: It will destabilize the health insurance exchanges, raise premiums, and continue to allow insurers to discriminate on the basis of preexisting conditions. Under the Republican bill, insurers could cherry-pick the best risks and destabilize the insurance market for everyone else.

KWAME HOLMAN: In the end, the vote was 261-157, with 39 Democrats voting for the Republican bill.

MAN: The bill is passed.

KWAME HOLMAN: White House officials feared even more Democratic defections before the president announced he’s giving insurance companies the option of extending current policies through 2014.

In Detroit today, Kathleen Sebelius, the secretary of health and human services, said she thinks most people will opt for new plans.

KATHLEEN SEBELIUS, U.S. Health and Human Services Secretary: We just hope that, on balance, people find either affordable coverage staying with their plan for an additional year and have a transition year — and that’s what this really is — it’s kind of a bridge year — or find for that, for far better coverage, they are better off in the new marketplace.

KWAME HOLMAN: House Republicans insisted today the president’s administrative change is not enough, that it takes the force of law to do what’s needed. But the White House warned the president will veto the GOP bill if it ever reaches his desk. And in any event, the measure stands little chance of garnering a majority in the Democratic-held Senate.

Instead, a handful of Senate Democrats led by Louisiana’s Mary Landrieu is pushing its own bill. It requires companies to continue existing coverage, but unlike the House bill, it’s limited to current customers. And unlike the one-year limit on the plan the president announced yesterday, the policies could remain in effect indefinitely, all this as the president met with health insurance CEOs at the White House this afternoon, urging them to renew canceled policies.

JUDY WOODRUFF: As Kwame said in his report, the president’s move yesterday on the problem of canceled policies allows insurers to extend those current plans through 2014. But it doesn’t require them to do so.

Now, one of the main questions is whether insurers will go along with this and, if they do, what concerns they have about changing things again.

Hari Sreenivasan picks up that part of the story.

HARI SREENIVASAN: Julie Appleby follows these matters closely for Kaiser Health News, an independent not-for-profit news organization. It is not affiliated with the Kaiser Permanente insurance company.

So, I know that we saw images of the president meeting with the CEOs today. Has the insurance industry come out and made a statement on how they’re going to take these changes?

 JULIE APPLEBY, Kaiser Health News: They’re being very cautious right now.

A lot of them, because of the logistics involved, because this is optional, they are saying they’re studying this, but they haven’t made any decisions. A lot of them are very noncommittal about it. We have heard from a few insurers, like Florida Blue, Aetna, Blue Cross/Blue Shield of North Carolina, who say that they do want to allow some of these policies to be renewed.

But we’re also hearing from the industry’s trade lobby that this is a bad idea. They don’t like the idea. They say it could disrupt the market and could cause problems down the line that could cause higher premiums in the future.

HARI SREENIVASAN: So, it’s a mixed bag depending on the insurance companies, and there’s no way to interview every one of these.

JULIE APPLEBY: Yes.

HARI SREENIVASAN: So, let’s talk about some of the practical challenges that these insurance companies have now. How much is it going to cost them when it comes to changing these formulas around? They have taken at least a year, a year-and-a-half to try to figure out how to comply with the ACA.

JULIE APPLEBY: That’s one of the things they’re wrestling with. Is this worth it to them to go through the administrative hassle of figuring out, how many policies do we want to renew? Which ones? How much will it cost? Do we want to raise premiums for these policies?

If they want to raise premiums, which they usually do — when a policy comes up for renewal, there’s usually a premium increase. But that requires that they file that with their state insurance commissioner, get approval in many cases, and put it into effect. That’s one of the questions they’re wrestling with. How would we do that? Do we have time to do that?

Remember, a lot of the policies expire by the end of the year. And so if people want to have coverage starting January 1, they pretty much have got to have this done by December 15. That’s only a month from now and that is not a lot of time. So, that’s one of the things that the insurers are wrestling with in this process.

HARI SREENIVASAN: One of the reasons for all these timelines was to encourage people to get into these health care exchanges. The exchanges need a good cross-section of people, young healthy people, old people, et cetera.

If this extension or this delay happens, what happens to the pool of people in these exchanges?

JULIE APPLEBY: That’s one of the concerns that the insurers and the actuaries and some of the state insurance commissioners as well have stated is, what happens? Is this going to keep more people who are younger and healthier, for example, out of that pool that’s going into those new marketplaces?

And if that happens, if the young people or the healthier people decide to hang on to these policies because they’re less comprehensive and maybe a little bit less expensive, then that might leave older and sicker people in the marketplace and that over time could drive up costs in that marketplace, which could be a big problem down the road.

HARI SREENIVASAN: And then help explain the role that the state insurance commissioners play, because they’re not a wild card, but they’re a very important actor in rolling these things out.

JULIE APPLEBY: That’s right. That’s right. And not all of them want to do this. We have heard from several states that say, yes, we want to.

And we have heard from several that don’t. Washington State, for example, doesn’t want to do this. The insurance commissioner there said we enacted some of these new consumer provisions. We require these new plans to have a lot of new benefits. That’s why we’re getting rid of the old plans, and we think that consumers are going to benefit from the new plans, so we don’t want to change this.

But other states are saying that, yes, we want to try it. So, Florida, for example, has said, yes, we’re going to let people renew the policies. So, these insurance commissioners are going to be part of this decision, and they’re not unanimous in what they’re going to do.

HARI SREENIVASAN: And is there any sort of a timeline or deadline that the insurance commissioners have to decide by?

JULIE APPLEBY: Well, again, it gets back to, when do these policies kick in?

So, for some people, these policies expire at the end of December, so for them, the pressure is on. But what the president said is that even policies that expire say, in January, or February or March could be renewed for another year. For those policies, there may be a little more time to decide.

HARI SREENIVASAN: And, ultimately, what about the sort of end user, the person who is thinking about jumping into these exchanges? Should this give them pause? Should they be waiting for some sort of communication from an insurance company?

JULIE APPLEBY: You know, the folks that are — what consumer advocates are telling me is that if you have had a canceled policy, you might want to check with your insurer whether they’re going to allow to you renew it or not. That would be the first step.

And then the other thing that consumer advocates say is that you ought to check on your online marketplace, whether it’s your state one or the federal one, to see if you might get a better deal through that marketplace, either a more comprehensive policy or a subsidy. But that’s that’s one of the things that people should check.

HARI SREENIVASAN: All right, Julie Appleby, thanks so much.

JULIE APPLEBY: Thank you.