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Covered California rejects Obama call for health plan extensions

President Barack Obama speaks about his signature health care law, Thursday, Nov. 14, 2013, in the Brady Press Briefing Room of the White House in Washington. Bowing to pressure, President Barack Obama intends to permit continued sale of individual insurance plans that have been canceled because they failed to meet coverage standards under the health care law, officials said Thursday. (AP Photo/Charles Dharapak)
Charles Dharapak/AP
President Barack Obama calls on Nov. 14 for extending individual health plans that are scheduled for cancellation.

3:54 p.m.: California Insurance Commish: Decision is disservice

California Insurance Commissioner Dave Jones, who had supported President Obama's proposal, issued a statement calling Covered California's decision "a disservice to policyholders." He argued that honoring the president's request would not "undermine the  implementation" of the Affordable Care Act. Jones said an extension would have given consumers "more time to figure out what makes sense for their families." 

The health insurance industry's lobbying group, the California Association of Health Plans (CAHP), applauded Covered California's decision. The agency "made the best decision for consumers by supporting the success of our new health insurance marketplace," said CAHP President and CEO Patrick Johnston. He said insurers "will work closely with Covered California to ensure consumers fully understand their options, take advantage of subsidies and get the comprehensive health coverage that they need."

3:30 p.m.: Covered California to 'increase momentum' on state program

Covered California announced several steps it is taking "to sustain, if not increase, its...momentum," including extending the deadline to enroll for coverage taking effect on Jan. 1, 2014 from Dec. 15 to Dec. 23. Covered California is also:

  • Extending the deadline for payments due from Dec. 26, 2013, to Jan. 5, 2014. 
  • Establishing a telephone hotline for consumers to resolve enrollment questions. The hotline, (855) 857-0445, will be available beginning Monday, Nov. 25.
  • Sending information laying out coverage options to the nearly 1.13 million Californians whose policies are being cancelled.
  • Collecting and reporting data, on a regular basis, showing the impacts of conversion for individuals.
  • Engaging consumers in their communities through Certified Insurance Agents, Certified Enrollment Counselors and Certified Educators.

State Senate President pro Tem Darrell Steinberg (D-Sacramento) issued a statement saying that Covered California's board "made the appropriate decision to stay the course." He said the state "is well ahead of the rest of the country in implementing the Affordable Care Act," and with "new assistance by Covered California to help consumers navigate the system, Californians will be ensured high quality insurance coverage at rates they can afford."
2:25 p.m.: Covered California rejects calls to extend cancelled health plans 

Covered California announced Thursday that it is rejecting President Obama's call for the state-run health insurance marketplace to permit the extension of individual health plans that are slated for cancellation because they do not comply with the Affordable Care Act.

The agency's five-member board of directors voted unanimously to retain its current policy of requiring insurance companies to cancel policies that do not comply with the ACA.

Members of the Covered California board of directors said the biggest factor in their decision was their fear that extending those policies would keep hundreds of thousands of people out of the state-run marketplace,which could lead to higher premiums in general. 

Board members also acknowledged that a relatively small number of Californians will have to pay higher rates once their individual policies are cancelled, because they make too much to qualify for federal subsidies. (A report by Families USA released Thursday based on an analysis of US census data found that about 264,000 Californians under 65 risk having to buy a new individual plan without federal assistance.)  The board directed Covered California staff to ensure that the agency provides those people with as much information as possible about their insurance options.

Covered California announced Thursday that another 20,000 people enrolled in a health plan on the state-run insurance marketplace during the week of Nov. 12-19. That brings the total number of people who have selected a plan since Covered California opened for business on Oct. 1 to 79,891, according to the agency. 

The agency also released its first demographic breakdown of who is signing up. The data are only for the month of October, but they show that about 56 percent of the 30,830 people who enrolled were 45 or older, while only about 23 percent were 18 to 34. Peter Lee, the agency's executive director, said that number is "in direct proportion" to the overall population - about 21 percent of Californians are 18 to 34. Lee called that level of enrollment of the so-called Young Invincibles "very encouraging."  

Covered California officials hope to  to see the percentage of Young Invincibles increase in the months to come. 

A total of 135,000 people have been determined eligible for Medi-Cal so far, according to Covered California. 

Covered California demographic data for October 2013

6 a.m.: Covered California to decide on extending health plans that would be cancelled

 Covered California, the state-run health insurance marketplace, will decide Thursday whether to adopt President Barack Obama's proposal to let insurance companies provide customers with the option of extending for another year health plans that otherwise would be cancelled on Jan. 1.

The president unveiled his plan one week ago, amid withering criticism from the right and the left over the millions of individual policies that were being cancelled because they do not comform to the Affordable Care Act. California Insurance Commissioner Dave Jones says more than one million Californians have received notices of cancellation.

Jones immediately endorsed the president's proposal last week. He called on Covered California to let insurance companies renew and extend individual plans that had been on the chopping block, and he urged insurers to extend the policies through 2014. The insurance commissioner said the ACA does not require those policies to end until December 2014. 

Covered California's initial reaction was non-committal. Meanwhile, the California Association of Health Plans (CAHP), which lobbies on behalf of the insurance industry, urged the state not to go along with Mr. Obama's plan. It said California should continue its current efforts to enroll as many people as possible in new policies that include all of the coverage required by the federal law. 

The ACA requires that all health plans provide coverage for several things that many policies traditionally did not cover, such as preventive services, prescription drugs, maternity and newborn care, substance abuse and mental health treatment, and hospitalization, among others.

"Reversing course now could cause a significant disruption in the marketplace," CAHP President and CEO Patrick Johnston said last week. "Consumers could see rate increases for extended policies that won’t have the added value of ACA required benefits. And, the exchange would be unbalanced with a pool of older, sicker people, causing additional increases in rates." Young and healthy people need to buy insurance in significant numbers to help hold down costs. 

Also on Thursday, Covered California will release demographic data on the people who have bought insurance on the marketplace so far. Last week, Covered California Executive Director Peter Lee  predicted that the initial enrollees will not be on average the young and healthy, but rather "older folks or people with health conditions."