As grandfathered plans disappear, consumers better informed
After the outcry over the cancellation of policies that didn't meet Affordable Care Act requirements, the Obama administration allowed some noncompliant policies to continue until 2017.
Despite this move from the administration, which has made some insurers discontinue noncompliant policies early, consumers are better informed of their options, according to a post from The Commonwealth Fund Blog.
While insurers have always been able to discontinue plans, the administration now requires insurers to give consumers at least 90-days' notice that their current health insurance policies are being discontinued and that they have other health coverage options.
Insurers must also share other information, including that consumers can apply for financial assistance to pay for private coverage or determine Medicaid eligibility through the marketplace. Many consumers who lost their plans last year are eligible for financial assistance through Healthcare.gov or the state marketplaces, according to the post.
Anthem, CareFirst BlueCross BlueShield, Health Care Services Corp., Kaiser Permanente, Humana and UnitedHealth are among the insurers ending the grandfathered plans, FierceHealthPayer previously reported.
The insurers say the discontinued plans don't make business sense, since they can make more money selling ACA-compliant policies that have higher premiums, which the federal government may subsidize. And many of the noncompliant plans covered healthy members, putting insurers at risk for violating the medical-loss ratio requirement.
Almost 20 percent of consumers with individual plans lost their coverage, FierceHealthPayer previously reported. The individual market has "suffered from a number of shortcomings," including benefit exclusions, denials of coverage and varying premiums. The market also was found to be volatile, with just 17 percent of individuals retaining their plans for more than two years.
However, the California Department of Insurance took a dim view last year of Anthem Blue Cross's proposed rate increases in the state for grandfathered plans. An Anthem spokesman countered that many consumers would be eligible for federal subsidies for ACA-compliant plans.
To learn more:
- read the blog post
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