SACRAMENTO (AP) — California’s insurance commissioner on Thursday called on health insurance companies and the state insurance exchange to extend a deadline on individual policies through 2014 after President Barack Obama announced changes to his Affordable Care Act.
Commissioner Dave Jones said he asked Covered California, the state health insurance exchange, to release insurers from contracts in which they agreed to terminate policies as of Dec. 31.
“It was mistake to require that those policies be cancelled,” Jones said.
Obama extended that deadline on Thursday, conceding problems with the rollout of the Affordable Care Act and the federal website where people have been directed to buy insurance. The announcement left insurance companies scrambling to figure out their next steps.
In California, Jones has said that more than 1 million customers have received notices canceling their existing coverage as of Dec. 31.
The federal law required minimum levels of coverage in individual insurance plans, which led many companies to terminate current policies even before the law required it at the end of 2014, partly to get more people into the mandatory, more comprehensive policies.
The California Association of Health Plans said the state should stay on track with its current plan.
“Reversing course now could cause a significant disruption in the marketplace, given that rates and benefit plans for 2014 have already been set by Covered California,” association President and Chief Executive Patrick Johnson said in a written statement.
He said extending policies that are not compliant with the federal guidelines could cause further rate increases for consumers and add to the imbalance in the state’s insurance marketplace by skewing the poll with more older, sicker people.
“The entire underlying premise of the ACA — balancing costs of the young, old, sick and healthy — has been left adrift with this announcement,” he said of the White House decision.
While the president’s new policy is good news for those who are happy with their current health plans that faced cancellation, insurance companies are worried and Shana Alex Laverreda from the UCLA Center for Health Policy Research agrees there is cause for their concern.
“If the healthy people stay in the sub-standard plans, then you only get the sicker people signing up for the plans with the essential health benefits. We call that adverse selection in the industry.”