WASHINGTON — The Obama administration’s abrupt policy shift Thursday on a key component of the Affordable Care Act could affect 15,000-plus Mainers whose policies were set to be canceled or modified next year.
But it remained unclear Thursday whether the majority of those policy holders will be able to keep their current insurance plans, and how their premiums will be affected if they do. Those decisions rest with Maine regulators and the insurance companies.
“The (Maine) Bureau of Insurance is reviewing today’s announcement,” said Doug Dunbar, spokesman for the state agency. He declined further comment on how the bureau might respond to the policy shift.
Facing intense pressure from the public and Democrats in Congress, President Obama agreed Thursday to allow insurance companies to continue offering plans that do not meet minimum standards set by the Affordable Care Act.
The standards had prompted insurance carriers across the country to issue notices that non-compliant plans would be canceled. The result was a powerful backlash against Obama, who had promised Americans that they could keep their existing plans, and against Democrats in Congress who supported the law.
Now “the president is offering insurance companies and the American people a way to ease the transition,” said Mitchell Stein, policy director for Consumers for Affordable Health Care, a Maine-based group that supports the law.
The extension announced Thursday would last for one year and would require insurers to inform policy holders if their plans fall short of the law’s coverage standards. But states and insurance companies could opt out of the extension, requiring policy holders to switch to more comprehensive coverage plans.
Nearly 16,000 Maine residents have already received cancellation or change notices, although none would automatically lose all coverage because canceled plans could be replaced with new ones. That figure is about one-half of the Mainers who buy coverage directly from insurers rather than get it through work or as part of a group.
Anthem Blue Cross and Blue Shield notified 8,500 policy holders – whose plans cover 9,600 people – that their policies would be canceled and replaced with “compliant” policies closest to their current plans, according to statistics from the Maine Bureau of Insurance.
Anthem’s cancellation and replacement policy would increase premiums for some policy holders but could lower premiums for others, according to the bureau. And some policy holders would be eligible for federal subsidies to help pay premiums under the Affordable Care Act.
Dunbar noted that affected Anthem policy holders will not lose coverage because their new policies – should they accept them – will take effect Jan. 1.
“If the policyholder doesn’t like the plan selected by Anthem, he/she could choose a different Anthem plan, or obtain coverage from another company either in the federal marketplace or outside the marketplace, or discontinue coverage,” Dunbar wrote.
Anthem spokesman Christopher Dugan deferred comment to the insurance industry’s trade group, America’s Health Insurance Plans. Dugan did not reply to subsequent requests for comment on whether Anthem would continue to offer the plans or proceed with the cancellations.
The trade group warned that the late changes announced Thursday by Obama could “destabilize the market” and trigger higher premiums.
“Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace,” Karen Ignagni, president and CEO of America’s Health Insurance Plans, said in a prepared statement. “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.”
MEGA Life and Health Insurance Co. sent “early renewal” notices to more than 3,850 policy holders in Maine. The Maine Bureau of Insurance said those policies covered 6,175 people.
Unlike Anthem, MEGA Life opted to renew the policies to begin Dec. 31 – the day before the Affordable Care Act requirements begin – to extend those policies through December 2014.
MEGA Life spokeswoman Donna Ledbetter said after the president’s announcement that the company plans to continue renewing the non-compliant policies in the individual market.
Those involved in Maine’s debate over insurance policies disagreed on the impact of the Obama administration’s plan.
Dan Bernier, an attorney and lobbyist who represents insurance agents in Augusta, said it will be difficult for insurance companies to backtrack now.
Bernier said insurance companies do not know how many policy holders will stick with their plans. That could knock the economic or actuarial calculations that underlie those plans out of balance, if too many chronically ill people re-enroll while healthy individuals go elsewhere, he said.
But Stein, with Consumers for Affordable Health Care, said it is in all parties’ interests – consumers, insurance companies and politicians – to make the president’s proposal work.
“When you are trying to reform a system that is broken, there is going to be some disruption,” Stein said.
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