After a year’s reprieve, up to 250,000 Virginians will receive notice by the end of November that their health insurance plans will be canceled because the plans do not comply with the Affordable Care Act and accompanying state law.
The affected policyholders were allowed to renew their old plans late last year, even though the plans did not provide all of the benefits required under the health care law, but they won’t have that option when the policies expire this year.
Doug Gray, executive director of the Virginia Association of Health Plans, said the notices will give policyholders the option to buy health plans with similar coverage that comply with federal and state insurance law.
“I don’t call that cancellation — I call that an adjustment to the new law,” Gray said Thursday.
But the pending notices, revealed during a meeting of a new legislative commission, immediately rekindled partisan political debate over the effect of the health care law that President Barack Obama signed in 2010.
“This law is causing untold heartache and genuine hardships for thousands of Virginians,” Del. Kathy Byron, R-Campbell County, chairman of the Virginia Health Insurance Reform Commission, said Wednesday. “It is becoming increasingly clear that the best option would be to repeal this poorly crafted law and start over.”
Not so, said Sen. John Watkins, R-Powhatan, chairman of the Senate committee that oversees insurance laws.
“To go back to square one right now would be just insane,” said Watkins, saying that would result in the rollback of popular benefits for dependent children through age 26 and people with pre-existing health conditions.
Under the law, insurance policies must include 10 essential health benefits, including mental health and maternity, and cannot deny coverage to people because of their health histories.
Obama has proposed to give states and insurance carriers the option of extending existing, noncompliant policies through 2017, but the Virginia Bureau of Insurance says it doesn’t have the option under state law to allow continuation of policies that don’t meet the new requirements.
An attempt by Gov. Terry McAuliffe to give consumers the option of continuing those policies under the president’s plan died in the House of Delegates this year, and a Senate committee killed proposals that would have allowed insurers to sell new policies that don’t comply with the law.
The estimate of 250,000 affected consumers came from Sen. Frank Wagner, R-Virginia Beach, a member of the insurance reform commission, in response to testimony by Gray.
Gray said 60 percent of policyholders in the individual market took advantage of the opportunity to re-enroll in their noncompliant plans last fall for another year. The market in Virginia covers an estimated 400,000 policyholders.
Scott Golden, spokesman for Anthem Blue Cross and Blue Shield, the state’s largest health insurer, said he could not estimate how many of the company’s customers will receive the notices.
Affected customers were allowed to renew their old policies last year up to
Dec. 15. They will have until Nov. 30 to replace those policies with what Golden called “the closest plan to what they may have had that is ACA-compliant.”
However, Byron said the new plans will likely have higher premiums and deductibles.
“I am deeply concerned that, at a time when families are already struggling to make ends meet, another 250,000 policyholders will have to trim their budgets back even further,” she said in a news release.
Republicans are trying to use the cancellation notices against U.S. Sen. Mark Warner, D-Va., who is in the middle of his re-election campaign and faces criticism for his support of the Affordable Care Act.
“Because Mark Warner worked to pass Obamacare, 250,000 Virginians are losing the health insurance they liked, with thousands getting hit with huge out-of-pocket cost increases while unable to see the doctors they trust,” said Paul Logan, a spokesman for Warner’s Republican challenger Ed Gillespie, who wants to repeal the law.
In August 2009, four months before voting for the Affordable Care Act, Warner had vowed that he would not support a health care reform plan that would “take away health care that you’ve got right now or a health care plan that you like.”
Warner echoed remarks by Obama, who had repeatedly promised voters that “if you like the plan you have, you can keep it.” In 2013, Politifact called the president’s promise the “Lie of the Year.”
Kevin Hall, a spokesman for Warner, said the senator pushed Obama to offer the option of extending noncompliant policies through Oct. 1, 2015, and urged Virginia to support the president’s proposal. In March, the president extended that option, which would be voluntary for insurers, to Oct. 1, 2016.
Warner asked Virginia Commissioner of Insurance Jacqueline Cunningham to extend the canceled policies under the president’s plan. “Many Virginians are upset about the troubled rollout [of the health insurance marketplace] and other early challenges with the Affordable Care Act,” Warner said in a statement in November. “I’m upset, too.”
Cunningham concluded five days later that it was unclear whether her office has the authority under Virginia law to implement the president’s recommendation. But she said state insurance law allowed carriers to offer early renewal of existing insurance plans in the individual and small-business group markets so that policyholders could continue existing coverage into 2014.
Most insurers, including Anthem, already were giving customers that option. The ones who took it will have to change their plans this year. “It’s time to start thinking about which plan you’re going to switch to,” Golden said.
Hall said Virginia still can change state law and give consumers the option of keeping their existing plans.
“The Virginia General Assembly has an opportunity in next week’s special session to allow the state insurance commissioner to give consumers the option of keeping their current plans,” he said.
“Thirty-seven states, including North Carolina, have already done that, and the Virginia General Assembly can and should do the same.”
Gray said it’s probably too late to change course this year.
“At this point, it’s like trying to turn an aircraft carrier on a dime,” he said. “It’s not likely to happen.”
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