Some renewing insurance early in face of ACA

Health insurers in Georgia are letting smaller firms and individuals move up their policy renewal dates so they can extend their current deals into next year – and avoid possible “rate shock’’ caused by the Affordable Care Act.

State insurance department officials and an industry group say the practice of trying to get around the ACA rules is occurring at least on a limited basis in Georgia

“If consumers think it’s in their best interests to renew before January 1, we certainly are not going to stand in their way,’’ said Jay Florence, assistant insurance commissioner. “There is no state or federal law that prohibits this type of agreement between customer and insurer.”

Anticipated costs of the ACA – which was passed in 2010 and has been taking effect in stages – are leading to these policy changes.

Beginning Jan. 1, the law will require insurers to cover a broad range of benefits, and will restrict their ability to charge more for pre-existing health conditions. To avoid those rules, and potential rate increases that accompany them, insurers are seeking to move up renewal dates for current policies before the year runs out.

“Some customers don’t want a richer set of benefits,’’ Graham Thompson, executive director of the Georgia Association of Health Plans, said Monday. “We’re trying to manage ‘rate shock’ during this time of tremendous transition.’’

It’s one of many options that insurers can bring to individuals and companies, he added.

If enough healthy people keep their current policies, though, it could drive up insurance costs for those buying coverage in new online insurance exchanges, or marketplaces, beginning next year, reported Julie Appleby of Kaiser Health News recently.

Florence told Georgia Health News that the agency is taking a neutral stand on the practice.

Still, Appleby of KHN reported recently that regulators in some states are trying to prevent insurers from moving up renewals. New York passed a bill to bar the practice, and Maryland officials say they have discouraged it.

Arkansas, on the other hand, has written to health insurers highlighting the renewal date change as an option they can consider, Kaiser Health News reported.

“It’s not in the best interest of consumers and circumvents the intent of the law,” Stephen Finan, senior policy director of the American Cancer Society Cancer Action Network, told KHN. “The intent of the law is to have a wide variety of consumer protections in place beginning in 2014.”

Consumers with current policies may have less generous benefits than if they were covered by the law, and would also be ineligible for federal subsidies available to those buying policies in the new marketplaces.

Separately, a survey released Monday found that health insurance executives expect U.S. employers to increasingly self-fund their group health insurance plans as a result of the Affordable Care Act.

Among those surveyed, 82 percent have experienced a growing level of interest among employers in self-funding their group health insurance plans over the past 12 months, with nearly one-third (32 percent) stating that such interest has increased “significantly.’’

The survey was released by Munich Health North America, a subsidiary of Munich Re, one of the world’s largest reinsurers.

Consumer group Community Catalyst said self-insurance leaves a loophole that could weaken the ACA’s new protections and raise premium costs for millions of Americans.

Stop-loss insurance is the tool that small employers and insurers can use to take advantage of this loophole, Community Catalyst said. While small employers have typically not self-insured, some stop-loss insurers are now marketing to small firms to encourage them to pursue this tactic to escape the ACA’s consumer protections and reduce their premiums.

Georgia insurance officials told GHN on Monday that they have not seen this trend here. They note that the state does not regulate self-insured employers’ health benefits, and there is no required or standardized reporting with the insurance commissioner by such employers.

Cindy Zeldin, executive director of consumer group Georgians for a Healthy Future, said Monday that these strategies to “game the system” would attract only employers with healthier workforces, so that they could maintain cheaper premiums.

“It would be encouraging to see the insurance industry to embrace the new [ACA] model a little more,’’ Zeldin added.