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Nov. 19, 2013
TOPEKA Officials at the state’s largest health insurance company said they would extend for another year individual policies that don’t comply with the federal health reform law.
The decision by Blue Cross Blue Shield of Kansas, prompted by a change in policy announced by President Obama last week, will give approximately 10,000 policyholders the options of retaining their existing coverage or shopping for a more comprehensive and perhaps less expensive plan.
“This governmental change will allow many of our members to keep the benefit plan they already have and like, while still allowing them to consider new plans that they may be able purchase with the help of a tax subsidy or small business tax credit,” company officials said in a prepared statement.
They said they would soon send letters to customers rescinding the cancellation notices that went out in recent weeks. The letters also will explain steps policyholders should take to extend existing coverage or purchase a new plan.
“We also will be in touch with our small business owners who have upcoming renewal dates to share this new information with them and review their options,” Blue Cross officials said.
Kansas Insurance Commissioner Sandy Praeger, a Republican who generally supports the reform law, said she expected the company to extend its nonconforming policies following the president’s announcement even though it would be a complicated and expensive process that could trigger an across-the-board increase in premiums.
Costs could go up, Praeger said, because it’s likely that many of the people who decide to keep nonconforming policies will be relatively young and healthy.
“If you’re going to let these healthier folks stay out of the mix for another year, there’s ultimately going to be a (cost) impact,” she said.
Coventry Health Care of Kansas, the state’s second-largest insurer, doesn’t face the same challenge because it decided to hold off cancelling policies that came up for renewal before the end of the year, Praeger said.
While that looks like a good decision in retrospect, Praeger said she thinks that BCBS was doing “the right thing” by trying to force consumers to look for more comprehensive and possibly more affordable coverage on HealthCare.gov, the federal government’s marketplace website.
“They (BCBS) were wanting people to go on the federal exchange — or state exchange as it were — to see what they might be eligible for in terms of better coverage and tax credits and subsidies that they might have been eligible for,” she said. “So, they were doing this because they wanted their policyholders to get a better deal.”
Federal tax credits designed to offset the cost of premiums to consumers are available only on policies purchased through the marketplace.
The combination of the website’s technical problems and the cancellation of policies created panic among consumers in Kansas and across the country and prompted bipartisan calls from Congress to relax enforcement of the law.
Federal officials and contractors are now working around-the-clock to meet a self-imposed deadline for completing major fixes to the website.
Praeger said she was hopeful but not convinced that would happen.
“It’s getting better but that’s a fairly high standard that they’ve set for themselves. I think the administration knows that’s the case and that’s why they come up with an alternative here,” she said referring to the president’s decision to allow people to temporarily keep policies that don’t meet the law’s minimum coverage standards.
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