By Katie Kerwin McCrimmon
Colorado will allow about 100,000 people who kept previously canceled health insurance plans to extend them until the end of 2015, but very few health insurance companies are likely to keep selling the plans.
Fury last fall over canceled health insurance prompted President Obama to decide that people could keep canceled plans for this year. Then the president made a second exception and said state insurance officials could allow the canceled plans for two additional years.
Insurance Commissioner Marguerite Salazar on Friday announced that she will allow people to keep the plans through the end of 2015 — one year less than Obama would have allowed. Salazar said she will decide next year whether to allow another extension through the end of 2016.
“By allowing people to continue their current plan if they liked it, we’re giving them one more option, one more choice,” Salazar said.
Republicans in Colorado and across the country have complained that Obama changed direction on allowing the canceled plans to try to minimize anger over the Affordable Care Act as an influential issue in the November elections.
Salazar said political considerations played no role in her decision. Rather, she said that people around the state convinced her that they wanted options.
“We kept hearing from these folks that they wanted these plans,” Salazar said.
Altogether, she said about 335,000 people received notices that their plan would be canceled because it did not comply with ACA requirements. Of those, Salazar estimated that 92 percent were given the option to extend their non-compliant plans. If about one-third of them took that option, about 100,000 people might be eligible to renew those plans.
It isn’t clear whether Salazar has the legal authority to extend the plans because a Colorado law passed last year prohibited insurance carriers from selling non-compliant plans in the state. Nor could she offer any reassurance that the IRS will not penalize people who buy the non-compliant plans.
Salazar said she will issue a bulletin allowing the canceled plans. It essentially would tell carriers that they won’t get in trouble if they sell the plans to customers who already have them.
Very few of the carriers may agree to go along with yet another extension.
Ben Price, executive director of the Colorado Association of Health Plans, said so far he’s only heard of “one or two” insurance companies that will keep selling the plans. Many of the insurance providers want to be sure that they have plenty of healthy people in the new pools, along with sicker, older people who may have been quick to buy through Colorado’s health exchange.
“Insurance is more affordable when we’re all in it together,” Price said.
Salazar said insurance carriers will have until June 15 to turn in proposed plans. That’s an extension from an earlier deadline of May 15. Customers who want to buy health insurance for next year will be able to enroll between Nov. 15 and Feb. 15 of next year.
Most insurance companies have already moved forward to make sure that all their plans comply with new requirements under the Affordable Care Act, Price said. The new essential benefits include preventive care and coverage for pregnancy and mental health coverage.\
“It’s important that the carriers know these changes as far in advance as possible,” Price said. “Things keep shifting. Every time that happens the carriers have to make new decisions and keep adjusting.”
He also said insurance companies want to encourage people to buy through the exchange.
“As an industry, we feel like it’s really important that the exchange be viable and that everybody is in. That’s what’s going to make the system work. We would like to see as many people as possible move into ACA-compliant plans,” Price said.
Colorado’s health exchange board members last month sent a letter to Salazar urging her not to allow the canceled plans. Exchange managers worry that they will lose customers if people can keep buying less expensive, less comprehensive insurance outside the exchange.
Exchange CEO Patty Fontneau said in a statement Friday that she supports Salazar’s decision.
“However, there will be impacts on the exchange that we will evaluate and build into our sustainability approach and sales strategy,” Fontneau said.