In the wake of an estimated 5 million health insurance policies being canceled due to not complying with the benefits provision of the Affordable Care Act, President Barack Obama recently announced that all plans that have been scrapped by insurers can be renewed. However, according to industry trade association America's Health Insurance Plans, this reversal may result in some unintended consequences for consumers in particular and the coverage market in general.
Karen Ignagni, president and CEO of the AHIP, stated after Obama's announcement that his reversal may cause disruptions that could undermine insurers attempts to keep rates affordable.
"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," said Ignagni. "Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace. If due to these changes fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase in the marketplace and there will be fewer choices for consumers."
She added that should scrubbed policies be restored, additional steps will need to be taken to bring stability back to the marketplace to prevent consumers from experiencing sticker shock.
The Department of Health and Human Services recently announced that more than 105,000 people selected a health plan through the federal or state-based exchanges since the enrollment period began in October. At the same time, though, because many existing plans didn't comply with the 10 essential benefits threshold, more than 5 million policies have been canceled, 20 percent of that total being in California.
Should these plans be renewed by insurers as Obama granted, policies wouldn't have to be changed until 2015, similar to the postponement given to business owners that provide employee benefits.
