Insurers are cancelling plans that don't make business sense


Many insurers across the country are cancelling plans that don't make business sense anymore, even though the Affordable Care Act lets them sell these noncompliant, grandfathered plans through 2017, reported The Washington Post.

Anthem, CareFirst BlueCross BlueShield, Health Care Services Corp., Kaiser Permanente, Humana and UnitedHealth are among the insurers ending the grandfathered plans, which were extended earlier this year by the Obama administration, FierceHealthPayer previously reported.

"The Department of Health and Human Services gave insurance commissioners and insurance companies the choice to renew pre-Affordable Care Act health plans until October 2016," said spokesman Ben Wakana, reported the Wall Street Journal. "However, as was the case before the Affordable Care Act, private insurance companies operate in a free market: They may choose to discontinue, change and replace plans so long as they let their enrollees know their options."

The insurers say they can make more money selling ACA-compliant policies that have higher premiums, which, in turn, may be subsidized by the federal government. Plus, many of the noncompliant plans covered healthy members, putting insurers at risk of violating the medical-loss ratio requirement.

"It's in the best interest of our customers and for the long-term viability of the marketplace," HCSC Spokesman Greg Thompson told the Post. HCSC is dropping grandfathered plans in New Mexico, Texas and Oklahoma, though it declined to say how many members will be affected.

"The decisions reflect the unique market conditions in each state," Anthem spokesman Tony Felts told the Post. Anthem also declined to say how many policies it's ending.

Kaiser Permanente sent letters to 3,414 consumers in Maryland and Virginia, notifying them that they're coverage will be canceled next year, according to the Wall Street Journal. Additionally, Carefirst BlueCross BlueShield, the largest insurer in both Maryland and Northern Virginia, did the same. 

To learn more:
- read The Washington Post article
- here's the Wall Street Journal article

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