Nov. 13—A growing list of legislation that aims to address the recent cancellations of millions of health policies has raised concerns about a range of unintended consequences.
Millions of the more than 14 million people with individual health insurance policies have had those plans cancelled because the policies were not compliant with new coverage requirements of the Affordable Care Act. Although the cancellations were anticipated when the 2010 law was enacted, policy holders’ frustration over the loss of these policies was compounded by an inability to replace the policies due to malfunctions in the new public insurance marketplaces the law created to sell replacement policies.
Also affected by the malfunctioning enrollment websites are hundreds of thousands of people in government-run insurance pools for people with preexisting conditions, most of which will be discontinued at the end of the year.
Legislators Rush to Provide a Fix
The ensuing outcry from both groups of policyholders left members of Congress scrambling for fixes. A growing number of bills have been introduced to address the issue and are backed by both opponents and strong supporters of the 2010 healthcare law.
The fastest-moving bill is Rep. Fred Upton’s (R-Mich.) “Keep Your Health Plan Act of 2013,” which would allow insurers to continue any 2013 policy through 2014 by lifting the coverage requirements of the ACA, such as the mandate that plans cover designated “essential health benefits.” The House of Representatives has scheduled a Nov. 15 vote on the bill, which has garnered several Democratic cosponsors.
Proposals Could Have Unintended Consequences
Sarah Lueck, a senior policy analyst at the left-leaning Center on Budget and Policy Priorities, said in a blog post
that the Upton bill would undermine the risk pools for plans in the ACA’s marketplaces by allowing healthier people with existing policies to stay out of the marketplace plans.
“The Upton bill, whatever its intention, would cripple the Affordable Care Act and—by causing premium spikes next fall –drive up the ACA’s unpopularity right before the 2014 elections,” Lueck said.
A separate Democrat-led effort in the Senate seeks to address the same problem. Sen. Mary Landrieu (D-La.) introduced the “Keeping the Affordable Care Act Promise Act” to allow individuals to continue their 2013 individual policies indefinitely and prohibits insurers from terminating them without leaving the market altogether.
Tim Jost, a law professor at Washington and Lee University and an expert on the law, wrote in Health Affairs that the Landrieu bill would compound adverse effects in the Upton measure because it would mandate insurer actions instead of allowing them to choose to continue plans. But the consequences would be the same: higher costs for both exchange plans and the federal subsidies available to help enrollees afford them.
Other legislation would delay for a year the ACA requirement that most citizens obtain qualifying insurance by Jan. 1, 2014. Instead of addressing the potential loss of coverage, such measures aim to prevent the law from fining people who lack qualifying coverage next year.
President Barack Obama also has promised some undefined administrative actions to address the rash of enrollment cancellations but it is unclear to industry experts what non-legislative options are available.
Additionally, the insurance industry could undertake some voluntary steps to mitigate the cancellation problem, according to health policy experts. For instance, insurers might allow existing policies to continue—at least until the March 31 end of open enrollment for the government-run marketplaces.
“It would require the cooperation of the industry, but that may be something that as the heat ramps up on this thing they would be willing to consider, despite their concerns about what this might do to the risk pools,” an official at the National Association of Insurance Commissioners said in an interview with HFMA.
Publication Date: Wednesday, November 13, 2013