Policy Renewal Loophole in PPACA a Threat to Exchange Insurers

Health plans sold after Jan. 1, 2014, must meet new requirements of the federal healthcare law, which some predict will raise rates, so a debate is brewing as to whether health insurers should be allowed to renew policies under older requirements to avoid those changes for all or part of next year, according to a report by the Los Angeles Times.

Many analysts point to double-digit rate hikes for individuals proposed by California insurers, especially impacting the young and healthy due to price disparity limits written into the law. Critics argue some health insurers’ policy renewal tactics are an attempt to keep the young and healthy covered on old plans and out of the exchanges, leaving an older, sicker pool of customers for insurers that plan to have strong participation in California’s online health insurance exchange, such as Kaiser Permanente and California’s Blues plans.

The report notes that Cigna, which will not sell plans through the state’s exchange, will revise its individual and family plans to have renewal dates of Dec. 31, giving renewers one more year with their old plans. A Cigna spokesperson quoted in the report said the strategy is “pro-consumer.”

Policy Renewal Loophole in PPACA a Threat to Exchange Insurers

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