WASHINGTON — Maine insurance regulators will allow Anthem Blue Cross Blue Shield to renew policies that were subject to cancellation next year because they do not comply with the Affordable Care Act.
The decision announced Tuesday will give thousands of Mainers extra time to choose new insurance plans that meet the standards set by President Obama’s health care law.
At least 8,500 Anthem policyholders in Maine were among millions of Americans who got cancellation notices for policies they bought on the “individual market.” The notices forced them to shop for plans with more comprehensive coverage but often higher premiums.
“This decision is meant to give several thousand Maine policyholders another option for 2014,” Maine Bureau of Insurance Superintendent Eric Cioppa said in a prepared statement. “It will also result in a smaller premium increase for those choosing to continue their current plan, and provide more time for those individuals to evaluate plans for future years.”
An Anthem representative said the company is pleased with the decision and plans to offer policyholders extensions.
“This decision will give our members more options in 2014,” Rory Sheehan, spokesman for Anthem Blue Cross Blue Shield of Maine, said in a written statement.
EXTENSIONS LEFT UP TO STATES
Before the rollout of the Affordable Care Act, Obama pledged repeatedly that Americans who liked their health insurance plans could keep them under the new law. But the reality has been much different and has fed the political frenzy over the law.
Provisions of the law meant that millions of individual and small-group policies could not be renewed next year because they don’t meet minimum standards such as lower annual deductibles and coverage for maternity care and mental health services.
Those policyholders began getting cancellation or change notices at the same time that millions more Americans were having trouble using HealthCare.gov, the federal government’s website for helping choose coverage in the new health insurance marketplaces.
Facing a strong public backlash over the cancellations and the botched rollout of HealthCare.gov, the Obama administration announced a major policy shift earlier this month to allow insurers to continue offering the non-compliant plans next year.
But the administration left that decision up to each state and insurance provider.
So far, Maine and 14 other states have agreed to allow insurers to keep offering non-compliant plans next year, and 15 have announced they will not grant extensions, according to a running tally by the trade group America’s Health Insurance Providers.
Four New England states – Massachusetts, Vermont, Connecticut and Rhode Island – rejected the option to allow non-compliant plans in 2014. Massachusetts said it wouldn’t make sense to allow subpar insurance plans to continue. New Hampshire had not announced its decision as of Tuesday.
ANTHEM TO CONTACT POLICYHOLDERS
An estimated 5.7 percent of the country’s non-elderly population is covered by insurance plans purchased on the “individual market,” rather than acquired through employers or groups.
In Maine, an estimated 32,000 people have health insurance on the individual market and 90,000 are covered by policies bought on the “small-group market.”
About half of the Mainers with individual policies faced the prospect of having to change policies next year because their plans had inadequate coverage or they had not had them long enough to be exempt from the law’s requirements.
Anthem officials said Wednesday that small group policyholders will not be affected by Tuesday’s announcement. The company has already offered small group customers the option of renewing their current policies early, thereby allowing them to postpone making a decision on a new plan until later in 2014.
Anthem provides most of the non-compliant plans in Maine, covering about 9,600 individuals.
The other major insurer in Maine’s individual market, MEGA Life and Health Insurance Co., gave its policyholders the option of renewing their policies next month – before the new standards begin Jan. 1 – to extend those policies through December 2014.
Sheehan, the Anthem spokesman, said the company will contact affected individual policyholders in the coming days to discuss their options. In the meantime, he said, those with questions should call their insurance brokers or Anthem at (877) 890-4507.
Cioppa, Maine’s insurance superintendent, said that allowing renewals of non-compliant plans will soften the 16.5 percent premium increase that Anthem had proposed for individual plans that are exempt from the higher standards. The average premium increase for those plans is now expected to be 12.6 percent, he said.
MANY MAINERS MAY END UP SAVING
Families USA, a group that supports the Affordable Care Act, recently released a report estimating that 71 percent of Americans who buy insurance on the individual market are eligible for either Medicaid or federal subsidies to buy insurance in the new marketplace. That would help reduce their out-of-pocket costs while improving the scope of their health insurance, the report said.
Although the percentage differed by state, Families USA estimated that 71 percent of Mainers in the individual market would potentially qualify for Medicaid or subsidies.
In a lengthy report released Monday, the U.S. Department of Health and Human Services acknowledged that allowing states to offer non-compliant plans for another year will affect the financial balance of the marketplaces. That’s because more healthy individuals – who typically cost insurance companies less – will stay out of the health marketplaces, the newspaper The Hill reported Tuesday.
This story was updated at 10:38 a.m. on Wednesday, Nov. 27 to correct information about small group policyholders.
Kevin Miller can be contacted at 317-6256 or at: