Covered Calif. Rejects Obama’s Health Plan Cancellation Fix

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On Thursday, the Covered California board unanimously decided that insurers will not be allowed to continue selling policies in 2014 that do not meet the Affordable Care Act's minimum coverage requirements, USA Today reports (Kennedy/Welch, USA Today, 11/21).


About one million individual policyholders in California recently were notified that their current insurance plans will be discontinued at the end of the year because the policies do not meet minimum coverage requirements under the ACA.

Last week, Obama announced a plan that would allow insurers in 2014 to continue selling insurance plans even if they do not meet the law's requirements.

The proposal also would require insurers that extend such plans to inform consumers that more comprehensive coverage options might be available in the health insurance exchanges and to list the benefits they would miss out on if they choose to keep their current policies.

California Insurance Commissioner Dave Jones (D) urged Covered California to implement Obama's proposal (California Healthline, 11/21).

Details of Vote

In a statement, the board said that "extending the deadline offers no benefit to the consumer and may create confusion about accessing affordable health care coverage."

Board member Susan Kennedy said, "There's no way to make the federal law work without this transition to ACA-compliant plans," adding, "Delaying the transition isn't going to help anyone; it just delays the problems" (USA Today, 11/21).

While the board acknowledged that some individuals may face higher premiums under the ACA, Robert Ross — another board member and president of The California Endowment — said the exchange is trying to focus on the law's overall goal. "We're trying to fix a system that was already complicated," Ross said, adding, "There were some trade-offs, and now we're learning what those trade-offs are" (Sisson, U-T San Diego, 11/21).

However, the board granted consumers an additional week — until Dec. 23 — to obtain new coverage. The exchange also will provide a special call line beginning Monday for individuals with cancelled policies (Varney, "Capsules," Kaiser Health News, 11/21).

Jones' Reaction

Following the board's vote, Jones called the decision a "disservice to California's consumers" and a "definite rebuke to the president" (Seipel/Calefati, Contra Costa Times, 11/21).

He said, "Allowing existing policyholders to keep their health insurance for the duration of 2014 will not undermine the implementation of the ACA, but rather will give consumers more time to figure out what makes sense for their families" (USA Today, 11/21).

Jones added that consumers with canceled plans "now face a very tight deadline to have to make a decision" on new coverage (Colliver, San Francisco Chronicle, 11/21).

Mixed Responses From Advocates, Lawmakers

Anthony Wright — executive director of Health Access — said it is important for the state to provide financial relief to individuals whose policies are being canceled, but he added, "you don't want to lose the momentum for the millions and millions of people who could get benefits" under the ACA ("Capsules," Kaiser Health News, 11/21).

Wright also said, "A year extension posed more disruption to the market as a whole" (Terhune, Los Angeles Times, 11/21).

Assembly Speaker John Pérez (D-Los Angeles) said that the decision was "the right thing to do" and that it "sends a powerful signal to the rest of the nation since California is leading in the implementation" of the ACA.

However, other lawmakers and consumer advocacy groups criticized the decision.

Republican lawmakers argued against the decision, vowing to introduce legislation this year that would allow insurers to continue selling plans that do not meet the ACA's requirements for an additional year.

Jamie Court, president of Consumer Watchdog, said, "It's outrageous that [the exchange] board would acknowledge that half of canceled policyholders will have rate hikes, then block them from continuing coverage for another year" (Contra Costa Times, 11/21).

Broadcast Coverage

Headlines and links to broadcast coverage of the exchange board's decision are provided below.

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