Tennessee’s state insurance regulators are still trying to make sense of President Obama’s decree last week that health insurance companies may continuing selling health policies that do not meet the requirements of the Affordable Care Act, which is the law of the land.
Like her counterparts across the country, Tennessee’s Department of Commerce and Insurance Commissioner Julie Mix McPeak has been sorting through the information coming out of Washington, D.C., trying to determine if Tennessee’s medical-coverage sellers are in a feasible position to continue offering policies they’d just days ago been planning to scrap.
Bowing to mounting dissatisfaction with the troubled implementation of his administration’s flagship policy initiative, the president last week announced he’d decided to allow a year-long grandfathering-in of policies that don’t meet the Affordable Care Act’s “Essential Health Benefits” requirements. Obama, who for years has claimed that under his health-system reforms people can keep their insurance if they like it, has been stung by news that millions of policyholders are receiving cancellation notices for their existing plans because they in fact do not comply with the Affordable Care Act.
Commissioner McPeak, who publicly briefed Gov. Bil Haslam on the latest Obamacare wrinkle, described a “fluid” situation that has raised many “unanswered questions.”
“We are still analyzing all possible ramifications of continuing those policies that have already been noticed as being cancelled,” McPeak told Haslam during a meeting Friday to discuss her department’s budget.
McPeak said allowing the extension of old plans seems to be a step in the right direction because it could mean “there is going to be the potential for additional choice in the marketplace for Tennessee consumers.”
“If Tennesseans have plans that they like and that are working for them, the extension for another year seems to be a very good thing,” she said.
“I have always anticipated that more competition in the marketplace benefits everyone, and allowing another choice for consumers, even if it is only going to be for another year, might help with the transition to (ACA-approved) policies,” she added.
However, reversing course now may not be so easy for insurance companies in Tennessee, she said.
The state’s largest carrier, BlueCross BlueShield, was set to discontinue some 66,000 Tennesseans’ plans because they don’t meet Obamacare’s minimum coverage requirements. But after the president’s announcement Thursday the company released a statement saying it is now awaiting “guidance from our state and federal regulators before we can clearly define any actions we may take.”
McPeak said companies that’ve been diligently putting plans in motion to come in line with the ACA in 2014 may face no small difficulty in sidetracking or diverting those efforts at the last minute. For the past year and a half insurance sellers have been engaged in “an IT buildup” to set the stage for making all their policies compliant with Affordable Care Act mandates so that those plans would in turn be available through the federally run exchange marketplace, she said.
McPeak said any effort now to “retool” and renew policies already slated for cancellation may pose serious logistical headaches, not to mention financial hazards to the company bottom line.
“The implementation of allowing the cancelled policies to continue will have a number of effects, both in terms of expected enrollment and exchange and off-exchange products — and then in the market itself, in terms of the coverage that is available,” said McPeak. “So we need to get some more information about how this policy would be implemented if we decide to allow that to continue in Tennessee.”
A statement from the National Association of Insurance Commissioners, which McPeak’s office circulated after Obama’s announcement, expressed concerns that delaying enforcement of Obamacare’s mandates “threatens to undermine the new market, and may lead to higher premiums and market disruptions in 2014 and beyond.”
“In addition, it is unclear how, as a practical matter, the changes proposed today by the President can be put into effect,” according to the NAIC. “In many states, cancellation notices have already gone out to policyholders and rates and plans have already been approved for 2014. Changing the rules through administrative action at this late date creates uncertainty and may not address the underlying issues.”
Ironically, Obamacare-supporting insurance regulators in a some states like Washington, Vermont and Rhode Island have stated their intention to nullify the president’s offer in their jurisdictions. They say giving insurance companies and consumers even a temporary opt-out of the sweeping health care law’s demands will actually undermine its future success.
A decision as to whether Tennessee will allow companies here to sell plans that don’t meet ACA requirements is expected from the Department of Commerce and Insurance this week.