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Health Health Care

Policyholders get chance to extend health plans

CareFirst BlueCross BlueShield said Wednesday that it would offer more than 55,500 customers the chance to extend their healthcare plans for another year, even though the policies don't comply with the federal Affordable Care Act.

Maryland's insurance commissioner had told insurers a day earlier that such a move would be legal, and last week a beleaguered President Barack Obama asked states and insurers to consider the extensions. The president had promised Americans that if they liked their plans, they could keep them.

The issue came to a political head as consumers expressed frustration that they were losing their coverage while the federal and state exchanges were not functional, thwarting efforts to shop for new plans. Republicans in Washington, as well as a Democratic candidate vying for governor in Maryland, used the policy terminations as political ammunition.

About 73,000 Marylanders had received nonrenewal notices. CareFirst, the largest insurer in Maryland, had sent the most notices.

Under the Affordable Care Act, known as Obamacare, policies that don't meet minimum-benefit standards and other requirements were to be canceled at the end of this year, though plans that existed before the health care law passed in 2010 were grandfathered in.

"We are extremely pleased to be able to extend this opportunity to our individual subscribers and their families," Chet Burrell, CareFirst president and chief executive officer, said in a statement.

"This provides a meaningful opportunity for those subscribers who act quickly to secure their existing coverage through the end of 2014," he said. "We will promptly inform subscribers of what they need to do to re-enroll in their existing plan if they wish to."

Officials told insurance companies they are required to inform policyholders of their options: Buy a plan that offers benefits and protections not included in their policies, or buy on the state's exchange, the Maryland Health Connection, where they may qualify for subsidies.

Under the federal health law, new health plans must meet certain requirements. They cannot drop subscribers if they become sick. They also must provide free preventative care, maternity coverage and other benefits.

To get an extension, policyholders must re-enroll in the health plans that were to be canceled by Dec. 16.

Kaiser Foundation Health Plan of the Mid-Atlantic States Inc., which planned to cancel more than 5,000 policies, said it also would offer customers the option to extend their plans.

"Our communication to consumers will strive to fully inform them of their options, including the option to continue existing coverage through 2014 and the availability of coverage through the Maryland Health Connection," the company said in a statement.

Aetna Life Insurance Co., which includes Coventry Health and Life Insurance Co., will not reverse course and offer renewals to any of the 12,622 policyholders who received termination notices. Because Aetna declined to participate in the Maryland health exchange, it can't sell individual policies in the state.

Some researchers have noted that there are pros and cons to extending the policies. Consumers get a temporary reprieve and can keep policies that may be cheaper than other options. But if enough people extend their policies, it could deprive the exchanges of young, healthy customers needed to keep premiums down, according to the Commonwealth Fund, a private organization that researches healthcare issues.

Young, healthy people are more likely to be enrolled in the inexpensive plans and more likely to extend them, even if they don't offer extensive benefits, according to the fund.

However, the fund notes that some policyholders may miss out on a deal if they choose an extension instead of shopping around. About 12.7 million people buy policies on the individual market nationally, and about half may be eligible for subsidies on an exchange. Still, about 3 million to 4 million may choose to renew their old policies, the fund predicts.

In Maryland, Health Secretary Joshua M. Sharfstein said allowing renewals is "a sensible approach — and it's permitted under Maryland law."

But the dustup with exchange glitches and policy terminations has led to sharpened attacks against Lt. Gov. Anthony G. Brown from political rivals who question his leadership. Brown and Sharfstein co-chaired a council charged with implementing the Affordable Care Act in Maryland.

Brown, a Democrat, has touted his role in developing the exchange as he campaigns to succeed term-limited Gov. Martin O'Malley.

On Wednesday, state Attorney General Douglas F. Gansler's gubernatorial campaign called on Brown to either give a full public accounting of what went wrong with the troubled exchange or let another public official take over. State Del. Jolene Ivey, Gansler's running mate in the contest for the Democratic nomination, said in a statement that Brown should "step up, or step aside."

"Having botched the job of rolling out Maryland's Health Exchange, Lt. Governor Brown owes a full explanation of why it's not working and what is he doing to fix it," Ivey said in a statement.

Brown's campaign and his state office declined to comment Wednesday. Brown's campaign had said that providing affordable care to Maryland residents was worth working through any obstacles to get the exchange working.

Gansler also said Brown defended insurance companies dropping policyholders when he said recently, "Let's be clear: These are not cancellation notices." Brown went on to say the notices were letters informing people they couldn't renew plans in 2014 that are considered substandard.

Typically, insurance companies offer to renew or discontinue polices annually, sometimes with different benefits or increased premiums.

Don Norris, chair of the department of public policy at the University of Maryland, Baltimore County, said Brown is just as responsible for the lackluster state system as Obama is for the failed federal exchange.

"In my opinion, there's no excuse whatsoever for any of the websites ... to have failed in the way they have failed, because we know about IT and government, and we know what it takes to make a website or any other large project a success," said Norris, who has studied the use of technology in government. 

While most Marylanders connect the troubled health exchange to Obama, Norris said the Gansler campaign's attacks could link Brown's political ambitions to the troubled system in Maryland.

"There's a potential there for this to do some serious damage," Norris said, adding that Brown "needs to get out in front of it and address it."

Baltimore Sun reporter John Fritze contributed to this article.

meredith.cohn@baltsun.com

ecox@baltsun.com

Copyright © 2014, The Baltimore Sun
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