Last week the national buzz was about the latest crisis in the rollout of Obamacare. As part of the President’s advocacy of his health care plan, the promise was made that Americans could keep their health insurance plan if they wanted it.
It turns out that it wasn’t quite true.
The new federal health care reform law set minimum standards for health insurers. Those policies that were substandard had to end. For some, that meant losing their coverage. In other cases, the insurers canceled coverage for their own reasons.
But some consumers were confused or angry about the cancellations and the outcry forced the President to act. Coming on the heels of the botched creation of the federal government’s health exchange website, the criticisms of the Obama Administration’s signature domestic achievement forced the President to change course.
So last week, the President proposed that insurers could now continue coverage for people whose policies were being canceled because they did not meet the new law’s standards.
Under the White House proposal, which would affect the 10 million or so people who already have individual policies, insurers would no longer have to cancel policies for 2014 that failed to meet the Affordable Care Act’s standards. The final decision on whether to allow insurers to continue selling those plans is up to insurance regulators in each state.
It was reported that some states have said they will not allow insurers to extend policies that do not comply with the guidelines established by the minimum standards set by the Affordable Care Act. New York State has not yet stated how it will proceed.
Some states where the cancellation numbers are not high are hoping they can work with the insurance companies to call consumers and walk them through their options. There is no guarantee that people with old policies will have them renewed at current rates, and some states have considered approving the renewal of old policies, allowing insurance companies to charge 10 percent or 15 percent more.
New York State officials estimate as many as 615,000 individuals will buy health insurance on their own in the first few years the health law is in effect. In addition to lower premiums, about three-quarters of those people will be eligible for the subsidies available to lower-income individuals.
New York’s insurance regulators have approved rates for 2014 that are at least 50 percent lower on average than those currently available in New York. According to the Department of Financial Services, individuals in New York City who now pay $1,000 a month or more for coverage will be able to shop for health insurance for as little as $308 monthly. With federal subsidies, the cost will be even lower.
In addition, New York’s health exchange has been performing up to expectations – unlike the federal exchange. According to the state, nearly 50,000 New Yorkers have signed up for coverage through the state exchange. Nearly 200,000 New Yorkers have been approved for coverage through the exchange but still must select a plan, so enrollment should pick up as it gets closer to the Dec. 15 deadline to enroll in a plan that will take effect Jan. 1.
But given the 50 percent reduction in premiums for those New Yorkers who have been purchasing their own health insurance, it’s hard to believe that there will be many who wish to keep their old coverage.
But the President’s proposal to allow insurers to continue to offer substandard policies will cause more difficulties for state officials. At the end of the day, the Cuomo Administration will have to make the call as to whether they want to go along with the President’s plan or keep its program the way it is.
New York’s health exchange seems to be moving along well, enrollment numbers are good, and the new policies are substantially less expensive than those offered now. Hard to imagine how a big change will make things better.
That’s all for now. I’ll be keeping an eye on the Capitol and will talk to you again next week.
Blair Horner is the Legislative Director of the New York Public Interest Research Group.
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