Governor’s office allowing health insurers to reinstate canceled policies

By Scott Lyon, Senior Vice President

Edited to add: Since the below article was initially published, Blue Cross Blue Shield of Michigan and Blue Care Network issued a statement that the Blues will continue the effort to transition small groups and individuals to reform compliant plans instead of continuing non-compliant plans.

Just a few minutes ago, the governor’s office released the below statement regarding the ability of insurance carriers to offer non-Affordable Care Act plan designs.  This is an ongoing story that continues to be written, as the next series of decisions must be made by our insurance companies.  In our opinion, the closer this decision gets to policyholders the more complicated it gets.  As discussed in a previous article, this decision is being reviewed from both a logical and logistical perspective. 

For the President’s “fix” to work, carriers face many difficult decisions and little time in which to make them.  Carriers will have to breathe new life into old plans within the next 30 days. That involves figuring out how much these plans should cost; submitting the plans to the state for approval; communicating the new plans to individuals and groups, many that have already made changes; enrolling customers into new plans; setting up the billing process; and many other things that will be very difficult to do on a short time-frame.

Additionally, if a state and carrier decides to move forward and allow plans that have been, or were scheduled to be canceled to renew, insurance carriers must tell policyholders that their plans do not meet the new minimum standards and must inform them about other options on the Exchange, including the availability of any subsidies. This sets up the very real possibility of adverse selection between the pools with the young and healthy keeping their current plans and those with pre-existing conditions selecting the plans under the ACA – that is a real problem for insurance carriers to reconcile.

As this issue unfolds over the coming days and weeks, you can always count on SBAM to be your source for accurate and up to date information.

Here is a copy of the governor’s press release:

FOR IMMEDIATE RELEASE
November 22, 2013
Media Contact: Caleb Buhs at 517-373-2380
Consumer Hotline: 877-999-6442
http://twitter.com/midifs

LANSING, Mich — In an effort to aid Michiganders whose health insurance policies were canceled as a result of the Affordable Care Act (ACA), Michigan Department of Insurance and Financial Services Director (DIFS) Ann Flood announced today that, after careful review and analysis, Michigan is allowing health insurers to reinstate canceled policies.

“The announcement of the federal policy change this close to January 1 came as a surprise,” said Flood. “We considered the difficulties that this change will create for insurers, but the decision came down to the fact that consumers in Michigan deserve to have options, particularly given the difficulty they’ve had accessing the federal Marketplace.”

Gov. Rick Snyder concurred with Director Flood’s decision.

“A healthier Michigan is an important part of our state’s continued comeback, but unfortunately Michiganders have seen their health insurance plans canceled under the Affordable Care Act after they were promised they wouldn’t lose them,” Snyder said. “Now, this policy change opens the door for those canceled policies to be continued. In Michigan, we want to be sure that consumers have the best options available.”

The decision allows insurers the option to reinstate policies that were to be discontinued beginning on Jan. 1, 2014, due to non-compliance with provisions in ACA, and follows the announcement that the U.S. Department of Health and Human Services will not enforce certain ACA provisions in 2014 for plans that were in effect on Oct. 1, 2013.

If a consumer’s plan is reinstated their insurer is required to send a notice that informs them of the ACA reforms that are not included in their reinstated coverage, their right to enroll in a plan through the Marketplace with the potential for financial assistance, and all available coverage options.

Any request for rate increases must be submitted to DIFS for approval.
Consumers who have questions about their specific plan and whether it will be reinstated should contact their insurance company.  Information about the ACA and what it means for Michigan residents is available here.