November 19, 2013

S.C. to allow insurance companies to un-cancel policies

About 150,000 people might be able to keep their old policies for a year

Taking the first step in the possible renewal of thousands of canceled health insurance policies, the S.C. Department of Insurance issued guidelines Tuesday for companies to notify their customers they can keep their old policies.

State insurance offices in some other states have decided not to allow the change in course in the Affordable Care Act provisions, but South Carolina opted to let insurance companies decide whether to make that choice.

The changes could impact an estimated 150,000 people in South Carolina, according to the insurance department. Those people had received notices that their health insurance policies were being canceled in 2014 because they didn’t meet some provisions of the Affordable Care Act. Last week, the Obama administration decided to allow insurance companies to continue those non-ACA compliant policies for at least one more year.

Now it’s up to the insurance companies whether they want to allow their current customers to keep those policies for another year. BlueCross BlueShield of South Carolina, the largest insurer in the state, said last week it planned to offer to extend those policies if the state insurance office gave the OK.

“We are pleased that the state’s Department of Insurance has issued its guidance today and applaud its responsiveness to the citizens of South Carolina,” BlueCross said in a prepared statement. “While we are poised to move forward, we are also obligated to include in our decision-making any additional guidance from the federal Department of Health and Human Services. As there are still details to be worked out, we will communicate in full with our customers once all the directives are in place.”

Insurance companies have until Dec. 2 to let the state insurance department know of their plans to offer to extend policies. The information sent to insurance companies from the state agency even included a form letter the companies can use to explain the situation to policy-holders.

Some states decided not to allow the change. Minnesota, for instance, said letting consumers maintain the once-canceled coverage could result in fewer young and healthy people buying coverage through the state’s new health insurance exchange.

South Carolina decided to allow the change to give insurance shoppers in the state more choices and to make the transition to the Affordable Care Act provisions as easy as possible, said department spokeswoman Ann Roberson.

Many of the policies at the heart of the change don’t cover one of the 10 essential benefits in the Affordable Care Act, such as maternity care, emergency services or prescription drugs. The policies often are less expensive than the cheapest policies offered on the new Health Insurance Marketplace, which must include those essential benefits.

When offering to renew the policies, insurance companies must remind policy-holders that they might be eligible for tax subsidies based on income if they buy new policies on the Health Insurance Marketplace.

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