Blue Cross renews canceled plans
Blue Cross Blue Shield of Arizona will automatically renew health-insurance plans for customers who have plans that may have been canceled under the Affordable Care Act.
The health insurer will mail letters this week informing individual and family-plan customers that their policies will extend through Dec. 31, 2014. Customers can opt out of their plans and instead shop for coverage from Healthcare.gov, purchase through an insurance broker or buy a policy from another company.
“We’ve had a lot of questions from members on this,” said Jeff Stelnik, Blue Cross’ senior vice president of strategy, sales and marketing. “We thought this was the simplest and most effective way to continue (coverage).”
The insurer’s preemptive strike comes as many consumers have received notices that their existing health-insurance plans will be canceled because they don’t the standards of the nation’s health-care law. Beginning Jan. 1, 2014, healthinsurance plans can’t deny coverage to the sick, must limit annual out-of-pocket costs to $6,350 and cover a set of 10 health benefits for things like hospital stays, prescription drugs, mental health and maternity care.
Faced with the furor over mass cancellations, President Barack Obama earlier this month announced a revised policy that would allow insurance companies to extend individual and family plans for another year even if they don’t meet the health-care law’s minimum standards. States and insurance companies must agree to extend the plans. So far, Gov. Jan Brewer has not said whether she would allow such an extension in Arizona, and her press secretary has not answered inquiries on the topic.
Even if Brewer rejects Obama’s fix, health insurers are allowed to renew existing policies for another year as long as such renewals are completed before Dec. 31. Blue Cross Blue Shield expects to notify about 55,000 customers this week that their policies will be extended through 2014.
Consumers are also allowed to keep “grandfathered plans” that were in place when the Affordable Care Act was signed into law in March 2010. About 50,000 Blue Cross Blue Shield plans have chosen to keep such plans since the law was passed. A sample letter obtained by
said that Blue Cross customers’ plans would be automatically renewed, or they can choose a new plan that meets the health-care law’s requirements. Some customers may see rate increases, but others will have their existing rates locked in.
The letter does not mention that customers can shop for a plan over Healthcare.gov or that they may be eligible for government subsidies to purchase health insurance. The health-care law provides tax credits to help offset the cost of health insurance for individuals who earn an annual income up to about $45,960 per year. That amount can vary, however, based on factors such as age and the cost of existing plans.
Although the letter does not mention that customers may be eligible for subsidized coverage, Stelnik said Blue Cross will answer questions from customers. He added that the company has a subsidy calculator on its website. Stelnik said he expects a rush of calls next week after customers receive their letters.
Other insurers believe that allowing insurers to extend old plans could disrupt the new health-insurance marketplace. Meritus, a non-profit health-insurance cooperative, begins its coverage next year, so it has no old plans to offer customers.
Kathleen Oestreich, CEO of Meritus, said that Obama’s allowance for old plans “is another dynamic that changes the marketplace.”
Health-insurance companies that sell policies over the health-insurance marketplace are attempting to overcome the glitch-ridden Healthcare.gov website, which the Obama administration previously said would be functioning much more smoothly by Dec. 1.
“It introduces people back to these low-priced products, which further changes who is going to shop and who is going to buy,” Oestreich said.