Illinois to let companies sell existing health insurance plans
Heeding President Barack Obama’s call to allow insurers to extend canceled health insurance policies, Illinois regulators ruled Friday that insurance companies can renew existing plans that don’t meet new standards under the Affordable Care Act.
Policies in effect as of Oct. 1 in the state’s individual and small group market can be renewed for a year starting between Jan. 1 and Oct. 1, 2014, the state said in statement.
Insurers have sent 185,340 cancellation notices to Illinois consumers over the past month, explaining that certain plans would cease Dec. 31 because they didn’t adhere to new coverage requirements under the health care law.
About 476,000 Illinoisans were insured by private individual policies in 2012, according to the most recent state data.
Those cancellations sent consumers into a mad scramble to choose new plans by Jan. 1 to ensure their coverage doesn’t lapse.
"Allowing companies to renew current plans gives consumers more time to evaluate their options and will provide a smoother transition into the health care coverage system envisioned by the (Affordable Care Act,)" said Andrew Boron, director of the Illinois Department of Insurance.
While some of those with coverage through the individual market will be eligible for federal tax credits to help offset the cost of purchasing new plans, others complained they were left choosing from among policies that cost more than double per month for roughly the same coverage.
With Friday’s decision, some of them may be able to keep those plans, depending on whether their insurers opt to issue renewals.
The state’s largest insurer by far, Blue Cross and Blue Shield of Illinois, said last week it “will comply with any new requirements,” and soon will contact consumers “who will have new options as a result of this announcement.”
"Our primary goal is maintaining access to qualify, affordable health care for our members and we will continue to support solutions that assure there are no disruptions in health insurance for our existing members," the insurer’s parent company, Health Care Service Corp., said in a statement.
It was unclear immediately whether Blue Cross or other insurance companies that offered plans in the state this year would renew those policies.
Obama announced the plan last week in response to public uproar over the cancellation notices, which effected millions nationwide. Many consumers were angered because the president had assured repeatedly that people who liked their health plans could keep them, regardless of massive overhaul spurred by the law.
Criticism over canceled policies came amid deepening turmoil surrounding the rollout of the law, commonly known as Obamacare, which prompted several prominent Democratic politicians to publicly admonish the administration over the law’s rocky implementation.
Illinois is the 15th state to go along with the president’s recent proposal to allow insurers to extend canceled policies for another year. It joins Wisconsin, Missouri, Ohio, Kentucky, North Dakota, Tennessee, Oregon, North Dakota, Hawaii, Maryland, Virginia, North Carolina, South Carolina and Florida.
Others, including California, New York and Indiana, have opted not to extend coverage, according to data from America’s Health Insurance Plans, a trade group that represents insurers.
Insurance companies and industry analysts have warned that widespread renewals of policies that do not adhere to new federal guidelines could keep too many healthy customers out of the new marketplaces, which could lead to higher rates in the future.
Through Nov. 2, a little more than 106,000 Americans, including 1,370 in Illinois, were able to select policies offered in the Illinois insurance exchange, according to federal data. That’s far fewer than the roughly 500,000 the administration initially estimated.
But because those figures also include people who have selected a plan but have not yet paid, it remains unclear how many have actually purchased plans.
Separately on Friday, the Obama administration extended by eight days the deadline by which consumers can sign up for new health plans in order to gain coverage effective Jan. 1.
Federal officials said consumers will now have until Dec. 23 to enroll in coverage that will kick in by the beginning of 2014 instead of Dec. 15. The move was largely a result of continued problems with HealthCare.gov, the federal website operating the online marketplaces where consumers in 36 states, including Illinois.
Julie Bataille, a spokeswoman for the Centers for Medicare and Medicaid Services, the federal agency handling the health law’s rollout, said the extension was set after conversations with insurers. The administration is confident carriers will be able to process applications in time for consumers’ coverage to begin on Jan. 1, she said. “We believe that will be able to happen.”
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