by Matthew Valeta, Health Policy Analyst
Last month, President Obama offered states the option to allow insurance companies to reinstate consumers’ previously cancelled plans. In Colorado, we already decided that insurers were allowed to continue offering consumers their current plan if they wanted. But in order to do so, that had to submit the plan to the Division of Insurance earlier this year. With Colorado already implementing our own plan, we decided to continue on with our current path. This means that plans that insurance companies already decided to cancel for 2014 will not be reinstated.
Here is a break down of how Colorado came to that decision.
In the spring of 2013 health insurance companies created new plans that are already being offered to consumers. These plans start in January 1, 2014. All plans being sold in 2014 were reviewed by the Division of Insurance and approved in August.
This Fall, insurance companies sent cancellation notices to 250,000 Coloradans stating that their health insurance plan would be cancelled in 2014. The decision to cancel these plans was made entirely by the respective insurance company.
We also learned from the Division of Insurance that 95% of these consumers were offered the opportunity to renew their policies early so that they would carry over into 2014. Therefore, the overwhelming majority of consumers already had the option to stick with their current plan. Additionally, insurance companies were required to notify consumers of all their options, including shopping in Connect for Health Colorado.
So why would an insurance company cancel a plan when it could have offered the same plan for another year?
- Administrative simplicity. Some insurance companies decided that they did not want to keep plans that exist under two sets of regulations in 2014: pre- and post-Obamacare.
- Profitability. The individual market is generally a volatile market where plans always come and go. Not every plan is profitable. Ending the plan may have been in the best interest of the insurance company.
As mentioned above, in November, the President offered states the opportunity to allow insurance companies to reinstate their previously cancelled insurance plans. Despite this announcement, Colorado decided on December 2nd that we would move forward with our existing plan.
Margueritte Salazar- Commissioner of Insurance:
“The system created to implement the ACA here was built by Colorado, for Colorado. Changing our approach mid-stream would have led to problems in the health insurance market and would have caused additional consumer confusion. Coloradans should continue to explore their options for better coverage and better protections at reasonable rates.”
So what do you need to know when you are shopping for a health insurance plan?
If your plan was cancelled, go to ConnectforHealthCo.com to see your new coverage options. Chances are it will be better coverage.
- If you want your plan to start January 1, 2014 you must purchase it by December 23, 2013
- The open enrollment period ends March 31, 2014. If you do not have coverage by this date you will be subject to a penalty for failure to have coverage.
If your plan will end in the middle of 2014, your health insurance company can extend that plan when it ends but it will have to meet the Affordable Care Act’s standards. If you do renew your plan during 2014, that plan would end December 31, 2014.
If you want to get a new plan when it ends, you will qualify for a special 60-day open enrollment period to shop.
Colorado has continued to implement Obamacare in a manner that works best for our state. Make sure you explore all your new options, including financial assistance through Connect for Health Colorado, before deciding on an insurance plan.