Insurers weigh Obama's reprieve on plans

  • Article by: Jackie Crosby
  • Star Tribune
  • November 18, 2013 - 5:11 PM

Minnesota regu­la­tors and in­sur­ers scram­bled Fri­day to fig­ure out how to im­ple­ment President Obama’s of­fer to let con­sum­ers keep plans that don’t meet the fed­er­al health care law, and wheth­er to try.

In the words of one Minnesota in­sur­ance ex­ec­u­tive, Obama threw a “big mon­key wrench” into an al­read­y un­cer­tain mar­ket­place this week when he de­cid­ed that con­sum­ers could choose to hang onto ex­ist­ing poli­cies for an­oth­er year.

“The worst-case sce­nar­i­o,” said Medica’s Geoff Bartsh, “is that this cre­ates a big­ger mess, and peo­ple will roll through now to the end of the year, for­get to eith­er re­new or make a cov­er­age de­ter­mi­na­tion and are stuck on Jan. 1 with­out cov­er­age, even if they have it today.”

Obama’s Thursday an­nounce­ment left it up to state in­sur­ance com­mis­sion­ers to de­cide wheth­er they will tem­po­rar­i­ly al­low in­sur­ers to ex­tend cov­er­age for plans that don’t com­ply with the fed­er­al health law. And even if the Minnesota Department of Commerce de­cides to grant the op­tion, it’s un­clear wheth­er the in­sur­ance com­panies will do so.

Of­fi­cials at the Department of Commerce didn’t pro­vide a timeline on a de­ci­sion. Com­mis­sion­er Mike Roth­man is­sued a state­ment say­ing the a­gen­cy was “work­ing quick­ly” to re­spond to the president’s an­nounce­ment and that its goal was to pro­vide more choice and af­ford­a­ble op­tions.

About 140,000 Min­ne­so­tans have plans that fall short of the health law’s re­quire­ments.

In­sur­ers spent a year cre­at­ing new plans based on the more strin­gent rules of the Af­ford­a­ble Care Act. Start­ing in 2014, in­sur­ers can no long­er deny cov­er­age for pre-ex­ist­ing con­di­tions, and have to cov­er a long list of bas­ic health care needs, such as childbirth, men­tal health care and pre­scrip­tion drugs.

For many peo­ple who are sick and who qual­i­fy for tax credits, the new poli­cies un­der Obamacare are wel­come re­lief. But in­sur­ance car­ri­ers fear that if young and heal­thy peo­ple de­cide to hang onto their cur­rent plans, the pric­ing as­sump­tions to spread the cost of med­i­cal cov­er­age among more peo­ple no long­er work. The re­sult, they warn, would be a destabilized in­sur­ance mar­ket and soar­ing pre­miums.

Most cur­rent poli­cies don’t even meet the re­quire­ments of the new “bronze level” plan of­fered on the law’s in­sur­ance ex­chang­es. Bronze plans of­fer the low­est pre­miums and high­est out-of-pock­et costs.

“These chan­ges will have a very pro­found im­pli­ca­tion for the mar­ket, not just in 2014 but in 2015 and be­yond,” said Scott Kee­fer of Blue Cross and Blue Shield of Minnesota. “There’s a real long-term is­sue loom­ing here.”

Sue Abderholden, ex­ec­u­tive di­rec­tor of Minnesota’s National Al­li­ance on Men­tal Ill­ness, wast­ed no time shar­ing her dis­ap­point­ment in e-mails to Gov. Mark Dayton and the com­merce com­mis­sion­er.

“These poli­cies that didn’t meet the new stand­ards, I’m guess­ing a fair per­cent­age didn’t cov­er men­tal health and sub­stance a­buse treat­ment,” she said. “We don’t think, frank­ly, that con­tinu­ing dis­crim­i­na­tion is a good i­de­a.”

She not­ed that some coun­ties in the state have al­read­y set budg­ets ex­pect­ing that in­sur­ers would shoul­der more costs of caring for those with men­tal ill­ness.

“If you’re a man, you know you don’t need ma­ter­ni­ty care,” Abderholden said. “But with one in four adults ex­peri­enc­ing men­tal ill­ness in any giv­en year, who knows if it’s going to hap­pen to you. Es­pe­cial­ly young peo­ple. We’ve had fami­lies go into bank­rupt­cy and face huge bills to pay out-of-pock­et for this treat­ment.”

Mean­while, con­fu­sion reigns a­mong con­sum­ers. At Medica, the call cen­ter was “get­ting slammed” on Fri­day, a day af­ter Obama’s an­nounce­ment.

“It’s a big monk­ey wrench,” Bartsh said. “People don’t know what to do. They don’t know what it means to them. The hard part for us is we still don’t have the a­bil­i­ty to an­swer a lot of their ques­tions yet.”

Jackie Crosby • 612-673-7335

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