States Divided on Letting Insurers Extend Old Health Plans - Most Republican-Led States Take Up President's Offer, While Some Democratic-Led States Are Reluctant

From The Wall Street Journal:

Insurance commissioners in most Republican-led states have agreed to a request from President Barack Obama to allow carriers to extend many insurance plans slated for cancellation, while regulators in Democratic states remain divided, The Wall Street Journal has found.

At least 21 of 30 states with GOP governors have said they are willing to let insurers extend policies through 2014 that otherwise would be canceled because they don't comply with the new federal health law. Many of the Republican-led states are allowing renewals that would extend coverage well into 2015.

The decisions have consequences for the law's fate, both short-term and long-term. The ability of more Americans to keep their old plans could placate some critics of Mr. Obama, but supporters of the Affordable Care Act fear it could ultimately undermine the law's promise of moving people into new health plans with broader coverage.

The president proposed the change on Nov. 14 to alleviate political pressure over the cancellations affecting consumers who bought individual policies. Mr. Obama had repeatedly promised that people who liked their health plans could keep them.

Many states taking the president up on his offer have cited the problems riddling the federal health-care exchange. The federal government is running the exchanges for almost all of the GOP-led states because they declined to do so themselves, out of opposition to the law.

Among the biggest Republican-led states that have agreed to work with insurers—or at least not get in their way if they want to extend policies—are Florida, Georgia, Michigan, New Jersey, North Carolina, Ohio, Texas and Wisconsin. Some of these states have hundreds of thousands of people facing policy cancellations.

Some Democratic-led states have been more reluctant. They are concerned it could undermine the success of the law by keeping consumers from the new health-insurance exchanges. Policyholders who want to keep their plans, which are typically less comprehensive than the new plans, are believed to be healthier people.

At least 10 Democratic-led states and the District of Columbia are in the "no" camp, the Journal's survey found, including Connecticut, Massachusetts, Minnesota, New York and Washington. Almost all of these 10 run their own health-insurance exchanges.

Nine Democratic-led states have agreed to the president's plan, including Illinois, Kentucky, Missouri and Oregon. California has said that insurers selling coverage on the state exchange generally can't extend policies, but that others may do so.

The president's proposal has caused some heartburn for insurance commissioners worried about technical or legal difficulties. GOP-led Nevada cited an analysis of state law in saying that it didn't have discretion to allow non-ACA-compliant plans to be renewed in 2014. On Tuesday, five states remained undecided or had yet to declare their decisions.

The District of Columbia's insurance commissioner was fired Nov. 15 for issuing a news release without clearance from the mayor's office that said the president's move "undercuts" health-care exchanges by siphoning out many customers. His interim successor, while avoiding direct criticism of the president, came to the same conclusion on substance and said D.C. wouldn't take up the president's offer.

Some insurers have suggested that they might have to reprice the new plans sold in the exchanges if the rules were changed to allow customers to retain older plans. Washington state's insurance commissioner, Mike Kreidler, said in an interview that with sign-ups to his state's exchange well under way, he didn't want to open up such a debate.

Even if states permit insurers to reverse course and renew policies that had been slated for cancellation, it isn't clear how many insurers will do so at this late date because of logistical and other hurdles. GOP-led Oklahoma noted it had encouraged early renewals well before the president's proposed fix and avoided massive cancellation notices.

"The fact is that many plans cannot be renewed in their current form," New Jersey Banking and Insurance Commissioner Ken Kobylowski said in a Nov. 26 statement. However, the state "will cooperate with health insurers that choose to renew" policies, he said.