Canceled Plans Can Be Renewed 2 More Years, But Not in Washington

President Obama

The Obama administration announced today that it will give Americans two more years to renew health insurance policies that don’t comply with the requirements of the Affordable Care Act — but only if their state allows it and if the insurer continues to offer the plan.

The Associated Press reported that the decision “helps defuse a political problem for Democrats in tough re-election battles this fall, especially for senators who in 2010 stood with President Barack Obama and voted to pass his health overhaul.”

But the delay also means that the issue is likely to come up again in 2016, a presidential election year.

Under the ACA, insurers were required to send letters to their policyholders last fall informing them that health plans that did not meet the ACA’s requirements would be canceled by the end of the year.

About 2.6 million Americans received cancellation letters, according to a study published March 3 in the journal Health Affairs.

The cancellation letters sparked a backlash from consumers who said they wanted to keep their current plans.

Facing growing criticism, President Obama announced in November that he had decided that state insurance commissioners could allow health insurers to extend canceled plans that did not meet ACA requirements.

More than half of the states – including Oregon, Alaska and Idaho — decided to allow insurers to extend their canceled policies.

However, Washington state did not.

In a high-profile move, Washington state Insurance Commissioner Mike Kreidler said that allowing carriers to extend canceled plans would not be appropriate for Washington, especially since the state’s exchange was working relatively well.

Kreidler has taken heat from Republican legislators for that decision.

But the Obama administration’s most recent announcement won’t change the situation for residents of Washington, according to the state Office of the Insurance Commissioner (OIC).

OIC spokesperson Stephanie Marquis said today the new policy only applies in states that chose to allow insurers to extend policies the first time.  “Since Washington state didn’t, this latest announcement doesn’t apply,” Marquis wrote in an email reply to a request for comment.

The two-year extension was included in a major package of regulations affecting health insurance plans sold through the new exchanges.  The hundreds of pages of new rules were issued by the Department of Health and Human Services and the Treasury Department.

The AP reported it “will likely take days for lawyers and consultants to fully assess the implications.”

One thing that will not change is the end date for the 2014 open enrollment period, which is still March 31.

However, the enrollment period for 2015 will run from Nov. 15, 2014 until Feb. 15, 2015, which is one month longer than previously scheduled.

Update, 5:15 pm: After this story was posted, the OIC issued a news release: “President Obama’s decision to extend non-compliant health plans does not apply to Washington state.”