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Covered California Bars Extension of Substandard Cancelled Policies

At the November meeting today the Board of Covered California reviewed three options: 1) continue cancellations of current substandard individual policies by Covered California health plans, 2) delay cancellations for three months until the end of March, 2014, and 3) delay cancellations for 12 months until December 31, 2014.

The Board voted for Option 1. The enrollment process for individuals will continue as planned. Individuals with Grandfathered coverage (i.e. the plans were purchased prior to 3/21/2010) will have their policies continued. The substandard individual plans will be cancelled effective December 31, 2013. Individuals with incomes less than 400% of FPL ($95,000 for a family of four) can get help with premiums and copays through Covered California or purchase in the individual market.  Individuals with incomes over 400% of FPL can purchase any plan on the individual market, including Covered California plans. Individuals with financial hardship (i.e. the lowest cost bronze premiums exceed 8% of family income) and all individuals under 30 can buy catastrophic coverage through Covered California.

This decision does not take the option offered by President Obama last week, in which state regulators were given the option to allow insurers to extend non-grandfathered policies for one year. California Insurance Commissioner Dave Jones stated shortly after Obama’s announcement that he would allow insurance carriers under his jurisdiction to extend substandard policies. However carriers that participate in Covered California are subject to contracts that require the cancellation of all non-grandfathered substandard policies outside of the Exchange. Thus the Board was faced with the decision to modify or continue the contracts as written.

The Board also considered allowing plans to extend coverage through December 31, 2014 or through March 31, 2014, if policies were renewed by the end of the year. Under either option, customers would be subject to potential rate increases throughout 2014, but would not be able to drop coverage and then qualify for special enrollment in Covered California plans outside the open enrollment period.

Several other tweaks to enrollment were adopted to provide flexibility to consumers. The deadline to pay premiums for 2013 enrollments was extended from December 23 to January 5. The date that enrollment must be completed to start coverage on January first was extended from December 15 to December 23. This will give Californians extra time to both enroll and pay premiums without a delay in coverage.

Additionally, a hotline to help consumers navigate cancellations and their options in Covered California was created. The Covered California Options Hotline can be reached at 855-857-0445 starting Monday November 25.

Plans will also be required to send notices to subscribers who have had their policies cancelled to inform them of all the coverage options available through Covered California.

 

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