Obama’s patch for ACA much like Georgia’s

President Obama’s decision Thursday to allow people to renew their canceled insurance policies for a year appears to have left as many questions as answers among health care analysts.

Facing a storm of criticism about canceled policies, Obama announced an administrative change to let insurers continue offering individual plans for another year, even if they don’t meet the Affordable Care Act’s minimum benefits.

In Georgia, to a large extent, such a remedy is already available. Many health insurers in Georgia are allowing individuals to retain their policies through late 2014.

GHN reported earlier this month that most Georgia insurers are letting consumers have an option to renew their plan before Jan. 1 and avoid the ACA’s benefits requirements.

President Obama signs the Affordable Care Act in 2010
President Obama signs the health law in 2010

Obama’s announcement came a day after federal officials released enrollment figures for the health insurance exchanges. In Georgia, 1,390 have signed up for a health plan through the exchange, the Department of Health and Human Services said.

But Glenn Allen, a spokesman for state Insurance Commissioner Ralph Hudgens, said Thursday that based on Georgia insurers’ data, the number of applicants who have given sufficient information to enroll through healthcare.gov is actually 536.

How the year’s extension of canceled policies will play out nationally is unclear. Insurance industry officials and experts expressed concern that the policy shift could lead to higher premiums.

Under the plan announced Thursday, the White House is not requiring insurers or state insurance commissioners to extend the existing plans, but instead is letting them offer an additional year of coverage. It’s up to the insurers and states’ insurance officials to allow the extensions.

Also, insurers must notify policyholders of the difference in benefits between their policies and the ACA plans available on the insurance exchanges. And the companies must inform people that additional policies are available on the exchanges and that subsidies may be available to those who qualify.

More confusion ahead

It’s going to be difficult for some insurance companies to restore canceled health plans, said Bill Custer, a health insurance expert at Georgia State University.

“The effect [of the policy change] will be felt in 2015,’’ he added. “The risk pool that insurers face will be more uncertain.’’

Obama said Thursday that the canceled-policy fix “won’t solve every problem for every person, but it’s going to help a lot of people.”

The decision runs counter to a central aim of the law, which was to ensure that all people with private health plans are guaranteed at least certain benefits.

The insurance industry immediately expressed concern about the policy shift.

“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 Ignagni, president of America’s Health Insurance Plans, said in a statement.

“Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace,’’ she said. “If now fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase and there will be fewer choices for consumers.

“Additional steps must be taken to stabilize the marketplace and mitigate the adverse impact on consumers.”

And the National Association of Insurance Commissioners issued a statement saying the decision “threatens to undermine the new market, and may lead to higher premiums and market disruptions in 2014 and beyond.”

“In many states, cancellation notices have already gone out to policyholders and rates and plans have already been approved for 2014,’’ the NAIC said. “Changing the rules through administrative action at this late date creates uncertainty and may not address the underlying issues.”

Despite the president’s reversal, House Speaker John Boehner said he intended to push ahead with a House vote Friday on a measure that would allow consumers to keep their canceled plans without penalty and allow others to sign up for them. Boehner said that he was skeptical of the president’s plan, and added that the ACA needs to be overturned.

“The only way to fully protect the American people is to scrap this law once and for all,” Boehner told reporters.

The change is temporary

Hudgens, Georgia’s insurance commissioner, has estimated that 400,000 people in the state currently have individual coverage that doesn’t meet the ACA requirements.

Officials from the health insurance industry in Georgia told GHN earlier this month that if consumers are able to renew before Jan. 1, they can keep that policy into late 2014. But at that point, policyholders will have to switch to a plan that complies with benefits requirements of the Affordable Care Act.

A consumer getting a cancellation notice also has the choice of switching to a new health plan now, either through the ACA’s online exchange or outside the exchange. (The president reiterated Thursday that technical problems with the exchange will soon be corrected.) Those policies, though, must cover the essential health benefits required by the ACA, which include maternity coverage, prescription drugs, mental health services.

Insurance experts have noted that the current individual policies often have big benefits gaps and large out-of-pocket costs. And many consumers who go to the exchange can get a subsidy or discount on a health plan, thus making the cost lower for better coverage.

The sign-up data released Wednesday also said that through healthcare.gov, an additional 396,000 people — including 7,709 in Georgia — were deemed eligible either for Medicaid or the Children’s Health Insurance Program under the ACA.

A spokeswoman for Georgia’s Medicaid agency told GHN on Thursday that federal officials have given states some preliminary data on people considered eligible for the public programs.

Lisa Marie Shekell, spokeswoman for the Department of Community Health, said the state doesn’t have enough information on those individuals to do eligibility determinations.

The number of people deemed eligible is likely to continue to grow despite Georgia’s decision not to expand its Medicaid program.

That’s because of the so-called “woodwork” or “welcome mat” effect. Experts forecast that the Affordable Care Act will lead many people who were already eligible for Medicaid and CHIP but had never enrolled to “come out of the woodwork” and finally sign up.

Georgia expects the woodwork effect will lead 46,000 Georgians to join Medicaid and PeachCare, the CHIP plan in the state, this fiscal year, with an additional 19,000 joining in fiscal 2015. That’s a total of 65,000 people.