Blue Cross and Blue Shield of Illinois will allow existing individual health insurance policies to be renewed for another year, even if they don’t meet new standards set by the Affordable Care Act, the insurer said late Monday.
The insurance company, the largest in Illinois, is the first in the state to commit to offering health plans that otherwise would have been canceled as of Dec. 31 because they no longer complied with the health law.
Blue Cross said it will allow renewals of those policies for one more year, while noting they may come at a higher price. “Premium adjustments may apply to these continued policies,” the insurer said in a statement. It did not elaborate further on whether those rate increases would apply to all plans or customers.
Under a November ruling by the Illinois Department of Insurance, policies in effect as of Oct. 1 in the state’s individual and small group market can be renewed for a year starting between Jan. 1 and Oct. 1, 2014. No carriers can sell new noncompliant plans in 2014.
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Insurers sent 185,340 cancellation notices to Illinois consumers this fall, explaining that certain plans would cease Dec. 31 because they didn’t meet the new standards, which include maternity coverage, prescription drug benefits and mental health services.
About 476,000 Illinoisans were insured by private individual policies in 2012, according to the most recent state data. Blue Cross held roughly two-thirds of the individual market in 2011, the latest year for which data were available.
The company said it would begin notifying brokers and policyholders in the coming days, noting that those customers will still have the option of buying coverage on the Illinois health insurance exchange, often with the help of government tax credits to help offset the cost.
Other insurers, including Humana, UnitedHealthcare, Aetna and Health Alliance, have not yet said whether they plan to offer old policies.
The Obama administration announced earlier in November that it would allow insurance companies to offer existing policies for 2014 in response to public uproar over the cancellation notices, which affected millions nationwide. Many consumers were angered because the president had assured that people who liked their health plans could keep them, regardless of the massive overhaul spurred by the law.
Illinois is among more than a dozen states to go along with the president’s proposal, joining Wisconsin, Michigan and Ohio. Others, including California, New York and Indiana, have opted not to extend coverage, according to data from America’s Health Insurance Plans, a trade group that represents insurers.
Andrew Boron, director of the Illinois Department of Insurance, said last month that allowing renewals “gives consumers more time to evaluate their options and will provide a smoother transition into the health care coverage system envisioned” by the Affordable Care Act.
Consumers have until Dec. 23 to sign up for coverage effective Jan. 1. Most Americans must buy a health insurance plan by March 31 to avoid paying a tax penalty, which starts at $95 or 1 percent of annual income, whichever is greater.
Insurance companies and industry analysts have warned that widespread renewals of noncompliant policies could keep too many healthy customers out of the new marketplaces, which could lead to higher rates in the future.
Date: December 02, 2013