President Obama on Thursday announced a plan aimed at keeping his previously broken promise that those who want to stay on their current health insurance policies can do so – but it’s unclear when, and even whether, his new plan will apply in New York State.
Amid a political firestorm over the cancellation of insurance policies deemed inadequate under his signature health care law, the Affordable Care Act, Obama announced an administrative change that will leave it up to the states, and then individual insurance companies, to decide whether to reinstate those canceled policies.
“I completely get how upsetting this can be for a lot of Americans, particularly after assurances they heard from me that if they had a plan that they liked, they could keep it,” Obama said at a White House appearance in which he repeatedly took responsibility for the botched “Obamacare” rollout.
“And to those Americans, I hear you loud and clear. I said that I would do everything we can to fix this problem. And today I’m offering an idea that will help do it.”
Obama said his administration will allow insurers to offer the previously canceled policies for one more year to those who had them, pending state approval.
“This fix won’t solve every problem for every person, but it’s going to help a lot of people,” the president said.
The trouble is, states – including New York – took actions that sanctioned the new federal guidelines that forced the cancellation of many policies purchased by individuals and small groups. That being the case, local insurers said they are waiting for further guidance from the state before deciding whether to offer the previously canceled policies to the 137,000 people in Western New York who received cancellation notices.
“All of these 2014 plans are regulated by the state,” said Nora K. McGuire, Independent Health’s senior vice president and chief marketing officer. “So we would definitely want to wait for guidance from the state and not do anything until we hear more from them.”
Donald R. Ingalls Jr., BlueCross BlueShield of Western New York’s vice president for state and federal relations, went one step further, saying: “It appears to us that under state law, we couldn’t continue to offer the existing plans.”
That could change if the state acts, but at this point, it’s unclear when, or even if, that will happen. “We are reviewing the president’s announcement and doing the necessary due diligence on the matter,” said Matt Anderson, spokesman for the state Department of Financial Services, which oversees the insurance industry.
Officials in Albany said there is little chance the State Legislature, which is out of session, will need to return to accommodate the changes the president proposed. That’s because New York’s Obamacare-related health insurance rules were driven by an executive order signed by Gov. Andrew M. Cuomo and carried out through state regulations rather than legislation.
And while it’s unclear what the Cuomo administration will do in reaction to Obama’s announcement, it’s clear that not every state will automatically reinstate the policies that have already been canceled even if Obama encourages them to do so.
“I do not believe his proposal is a good deal for the State of Washington,” said Mike Kreidler, Washington State insurance commissioner. “In the interest of keeping the consumer protections we have enacted and ensuring that we keep health insurance costs down for all consumers, we are staying the course. We will not be allowing insurance companies to extend their policies.”
If New York allows insurers to reinstitute policies that have already been canceled, insurers would face some serious technical and administrative headaches. They would have to track down their affected members to give them the choice of remaining with their old plan or choosing a new plan that offers the richer benefits required under Obamacare.
Those canceled plans have not been priced for 2014, and the Department of Financial Services would have to approve the price and the language of any resurrected plans for next year.
“It is adding a little bit of uncertainty at the moment,” Ingalls said.
Of the 137,000 people in Western New York who received cancellation notices from BlueCross BlueShield, Independent Health or Univera Healthcare, most belong to small group plans offered by smaller businesses. Many of those canceled plans do not include prescription drug coverage, which is required under Obamacare.
In addition, the state is canceling its Healthy NY policy for sole proprietors of small businesses who make a little less than $29,000 a year if they are single, or less than about $59,000 for a family of four.
Reinstituting all those canceled policies may be easier in New York than in other states, though, because New York law has long required health plans to offer an array of other benefits that are now required under the federal health law but that are often not required in other states.
“Since New York State has such rich benefits in place, there may not be a need to make changes in New York,” Independent Health’s McGuire said.
While creating uncertainty for local insurers, Obama’s announcement did little to ease the growing nervousness in Congress about the policy cancellations. The House remained on track to consider a bill today that would not only allow people to keep their canceled insurance plans, but also allow others to sign up for them.
While the House Republican leadership is pushing that bill, many Democrats are considering voting for it.
Rep. Brian Higgins, D-Buffalo, said he is undecided on the matter. Asked to comment on Obama’s move, Higgins said: “I think the president has made the right overture, but it may be too little, too late.”
The problem, Higgins said, is that Obama doesn’t have any enforcement authority that would require insurers to reinstate those canceled plans.
Rep. Chris Collins, R-Clarence, agreed. He deemed Obama’s move “a political necessity” that would do little, in the end, to fix the widespread problems with Obamacare.
Reiterating his belief that the federal health law needs to be repealed and replaced with something more workable, Collins acknowledged that Obama’s move might help some people.
“If even one policyholder gets their policy back,” he said, “that’s good.”