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THE MUSINGS OF A TRADITIONAL SOUTHERN DEMOCRAT

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Location: Douglas, Coffee Co., The Other Georgia, United States

Sid in his law office where he sits when meeting with clients. Observant eyes will notice the statuette of one of Sid's favorite Democrats.

Wednesday, March 05, 2014

Extension Expected on Health Policies Not Meeting Law - Insurance Plans Lacking Some Mandates to Be Allowed Even Longer, Industry Official Says

From The Wall Street Journal:

The Obama administration plans to let insurers sell policies that don't comply with the federal health law for at least 12 more months—a second delay aimed at averting another furor over canceled plans, insurance-industry officials said.

Millions of Americans received notices last fall saying their health-insurance policies would be canceled because they didn't meet the Affordable Care Act's stricter coverage standards. In November, President Barack Obama said state insurance commissioners could let health plans reinstate such policies for 12 months since many consumers were unable to use the balky HealthCare.gov website to obtain replacement coverage.

Mr. Obama's delay in cancellations had meant consumers could receive another cancellation notice before the midterm elections in November. Now, the administration has decided to extend the reprieve, according to two insurance industry officials.

The exact length of the expected delay is unclear. One insurance official said the reprieve could be an additional year or longer. That would allow many existing plans to stay in place through at least 2016.

Administration officials have told insurers in recent weeks they are strongly considering allowing these grandfathered plans to be extended for up to three years beyond the one year already granted, said a health-insurance executive.

Health and Human Services Department spokeswoman Joanne Peters wouldn't confirm there would be another extension, but said in a statement: "The administration has committed to doing all we can to smooth the transition for hardworking Americans. We've taken steps already and are continuing to look at options." She said the administration will provide final guidance on the issue soon.

News of the expected change was earlier reported by The Hill.

The alteration would be one of a series the administration has made amid the law's rocky rollout. Last month, the Treasury Department said it would give businesses with 50 to 99 workers until 2016 to comply with the law's requirement to offer health benefits or pay a penalty. The law originally intended the requirement to be effective in 2014; last summer, the administration announced a delay pushing enforcement to 2015.

Federal officials and other supporters of the 2010 law initially dismissed the canceled policies as "junk" insurance that should be taken off the market. Some covered only a relatively small proportion of costs or didn't include benefits such as hospital stays, maternity care and prescription drugs.

But when insurers moved to cancel such policies, consumers complained and pointed out that Mr. Obama had promised that "if you like your plan, you can keep it" under the new law.

Republican lawmakers criticized reports of the new extension. "Another end run around Congress does not excuse the administration from its countless broken health care promises," said Rep. Fred Upton (R., Mich.).

Any effort to create a longer reprieve could face obstacles. State insurance commissioners would likely have to agree again to allow insurance companies to continue selling policies that don't meet the law's standards, and the companies themselves would need to be willing to continue to offer them.

Some insurance commissioners and companies rejected the initial request from the president to extend plans, while others agreed to do so reluctantly, warning that the change could lead to consumers seeing higher premiums for 2015 and beyond.

Kansas Insurance Commissioner Sandy Praeger, an elected Republican who has supported some parts of the health law, agreed to go along with the first extension because of the website problems that Kansans with canceled policies were experiencing.

But she said Tuesday that she and some other state commissioners remained worried that allowing consumers to keep skimpy policies—often held by people who are in good health—would leave a riskier population to be covered in the main insurance market, which in turn would drive up rates.

"We really want these groups merged, because we think it's in the best interest of the consumers, and really ultimately of the companies," said Ms. Praeger.

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