President Obama’s announcement last week that insurers could let Americans keep their policies through October 2015 without complying with Obamacare rules—thus avoiding huge premium hikes—surely relieved many business owners who received cancellation notices.
But President Obama’s attempt to undo the policy cancellations may not work out. The reason: It’s up to state regulators and insurers on whether they want to let their policyholders keep their policies another year, and many are already bowing out.
In Washington State, for example, Insurance Commissioner Mike Kreidler quickly rejected the Obamacare fix and said insurers in his state would not be allowed to re-price their policies or void the cancellation notices.
“Changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers,” Karen Ignani, president of America’s Health Insurance Plans, a trade group, told The Seattle Times. “Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace.”
Regulators in Rhode Island, Mississippi and Georgia also suggested they would not allow the fix in their states. Massachusetts and Montana are still weighing the decision, according to Politico.com. California and Florida, on the other hand, agreed to move forward with the fix. However, it’s still up to insurers in those states whether they will give policyholders the option to renew at their current rates.
It’s also questionable whether insurers in states allowing the fix will even take advantage of it. If an insurer decides to take part, it would have to quickly notify clients it sent cancellation notices to that they are now allowed to keep their current policies another year and explain what parts of the Affordable Care Act their policy is not in compliance with.
"This puts the insurance companies, who have successfully complied with the law, in a hell of a mess," insurance consultant Robert Laszewski wrote to his clients, according to the New York Times.
Thankfully, many business owners were already taking advantage of a rule that allowed them to renew their current policy early, and keep that policy through 2014 without worrying about being Obamacare compliant. Given all the chaos around the “fix,” they’re probably glad they did.
Read more articles on Obamacare.
Photo: Getty Images