South Carolina’s largest private insurer will allow customers – sent cancellation notices in recent months, based on new Affordable Care Act requirements – to keep their health-insurance policies for 2014.
BlueCross BlueShield of South Carolina plans to let customers who received cancellation notices keep their individual policies for another year if they want too, spokesman Patti Embry-Tautenhan said Friday. A few caveats remain, however, including guidance on procedures from the S.C. Department of Insurance, she said.
The Insurance Department and insurers have plenty of questions after Thursday’s about-face by the Obama administration on the Affordable Care Act.
Many insurers sent out notices in recent months, telling customers their policies were being canceled because they didn’t meet at least one of the Affordable Care Act’s requirements. For instance, all act-approved policies must cover maternity care, hospitalization, and mental health and substance-abuse services.
The change announced Thursday by President Obama allows insurers to continue offering plans in 2014 that do not cover all those areas.
Insurers will have to tell customers the Affordable Care Act requirements that their plans do not cover. Insurers also must remind customers that if they go to the Health Insurance Marketplace to buy policies, they might be eligible for tax subsidies.
BlueCross, which handles nearly 60 percent of the S.C. insurance market, has declined to say how many of its policyholders were sent cancellation notices in recent months.
Because BlueCross and other insurance companies aren’t required to notify state officials about those cancellations, the Insurance Department has been reluctant to release an estimate on the number of people that would have been impacted by policy cancellations, said insurance commissioner Ray Farmer.
But, when the Governor’s Office asked Thursday for Farmer’s best estimate, he came up with 150,000.
A 2011 report by the Kaiser Family Foundation estimated 190,200 South Carolinians were covered by individual policies, those subject to cancellation before Thursday’s about-face. Farmer’s estimate that 150,000 people would have been impacted indicates the Insurance Department expected most individual policies to be canceled, a move that would have forced those policyholders to buy policies from the new troubled Health Insurance Marketplace.
The Obama administration’s decision Thursday also creates an unusual situation for 14 companies that had said they planned to leave the S.C. health insurance market in 2014.
Those companies already have sent out cancellation letters on policies that cover about 33,000 South Carolinians, according to the state Insurance Department. (Companies leaving the state are required to provide information on the number of policies canceled.)
It is unclear if the Affordable Care Act do-over on insurance policies includes those companies.
The companies already have filed their 180-day notice of intention to quit writing policies for a segment of the state’s insurance market in 2014. Once they leave that segment, the insurers are not allowed to write policies in that area again for five years, according to state law.
The state Insurance Department is trying to determine how – if at all – Thursday’s changes impact the 14 companies and their policyholders, Farmer said. He hopes to be able to provide guidance early next week to the companies.
While BlueCross expects to allow canceled policies to be renewed, the company said it needs more time to examine the details of Thursday’s about-face before moving forward.
“We are going to continue to comply with all of the regulations of the ACA and do what is in the best interest of our customers,” Embry-Tautenhan said. “Obviously, there are still many details to be worked out, and we will communicate in full with our customers once the directives are in place.”
The 14 companies who had filed their intent to drop out of the S.C. market include Aetna Life Insurance.
However, Coventry Health Care of the Carolinas, which was acquired by Aetna, is continuing to operate in the state, selling individual health care policies and also selling policies as part of the Health Insurance Marketplace, plagued by problems with its website.
“We support efforts to allow people to keep what they have,” Coventry said in a statement. “However, we will need cooperation and expedited approval from state regulators to remove barriers that would make it difficult to make this change in such a short period of time.”
On the way out?
Fourteen companies had announced their intent to leave the S.C. health insurance market in 2014, impacting policies covering about 33,000 people. However, after Thursday’s about-face by the Obama administration, whether the companies will withdraw from the S.C. market is up in the air. The insurers that had said they would leave the state’s market for individual health care policies are:
• Aetna Life Insurance Co.
• Carolina Care Plan
• Connecticut General Life Insurance Co.
• Independence American Insurance Co.
• Madison National Life Insurance Co.
• Mid-West National Life Insurance Co. of Tennessee
• New York Life
• Physician’s Mutual
• Standard Security Life Insurance Co. of New York
• The Chesapeake Life Insurance Co.
• The Mega Life and Health Insurance Co.
• United American Insurance Co.
• Group Market
• Carolina Care Plan