WASHINGTON — Americans can buy insurance policies that don't meet the requirements of the Affordable Care Act for another year, if their states' insurance regulators allow them to renew their policies this year, administration officials said Wednesday.
The change represented another midcourse correction for the law, which is still recovering from the flawed opening of the federal and state health care exchanges last Oct. 1 and the delay of several key provisions. Last July, the administration delayed the requirement that businesses provide health insurance for their employees, and President Obama said in November that those with pre-ACA insurance plans could keep them if they wanted.
"These policies implement the health care law in a common-sense way by continuing to smooth the transition for consumers and stakeholders and fixing problems wherever the law provides flexibility," Health and Human Services Secretary Kathleen Sebelius said Wednesday.
The law originally required that everyone buy a policy that complied with its requirements in 2014. That meant skimpy plans, which sometimes cost more in premiums than the coverage they provided, had to be replaced by plans that included hospital stays and prescription benefits, as well as other basic benefits. The change came following political backlash after Obama told people that they would be able to keep the same health care plans after the law was enacted.
Obama offered insurers the option to continue to offer the old plans, though some states chose to mandate ACA-compliant insurance. The new rule states that individuals and small groups may continue to renew old policies up to or beginning Oct. 1, 2016.
The number of people in those policies is dropping, Sebelius and other officials said, but they wanted to give insurers time to make sure consumers knew about the options they have through the state and federal exchanges. Officials said that applies to about only 500,000 people. The risk-corridor change comes in part because insurers had expected those people to come into the ACA-compliant plans and based their rates on that expectation. Officials said the changes would not affect budget spending.
It's still hard to determine how many people have moved to compliant plans because people are buying insurance both through the exchanges and through insurance companies, Sebelius said.
The delay should be made permanent, said Sen. Mary Landrieu, D-La.
"The administration's action today is a step toward keeping the promise that was made to the American people that if they liked their health plan, they could keep it," said Landrieu, a supporter of the law who faces a tough re-election fight this fall. "And I intend to hold the administration to that promise."
Officials also announced that employers that self-insure would be able to report insurer and employer provisions in one stream-lined form, as well as allowing the option of reporting which employees "may be" full-time, as opposed to "are" full-time.
"Today's announcement is part of the administration's effort to provide certainty and early guidance about major health policies so employers, small business owners and other individuals can plan for 2015," said Assistant Secretary for Tax Policy Mark J. Mazur. "Treasury's final rules significantly streamline and simplify information reporting while making it easier for employers and insurers of all sizes to provide the quality, affordable health coverage that every American deserves."
This affects 4% of employers officials said, but comes in response to concerns that the process was time-consuming for those employers.
HHS also announced more protections for insurers who based premium prices on the assumption customers would shift from old plans to newer ones that met the law's requirements. It simplified reporting requirements for employers. The changes are part of a review of regulations required to implement the law, officials said, and reflect the experiences from earlier changes.
They also announced:
- Open enrollment for 2015 will begin Nov. 14, 2014, and end Feb. 15, 2015, so that insurers have more time to prepare.
- States have until June 15, rather than Jan. 1, to have a approved blueprint in place to transition to a state-based marketplace
- That the cost-sharing limits for individuals for 2015 will be $6,600 and $13,200 for families.
- Allows federal SHOPS to offer stand-alone dental plans or a choice of plans, and allows employers to provide different contribution rates for full-time and part-time employees after 2015.
Changes to the enrollment period will give people more time to sign up after the holidays, said Brian Haile, senior vice president for health policy at Jackson Hewitt Tax Service Inc. It will also give them a chance to see how not having insurance in 2014 will affect their taxes, assuming they file early. Beginning in 2014, people who don't have health insurance must pay a fine when they file their taxes in early 2015.
Officials said they expect no more major announcements for the rest of the year, and that March 31 will remain the last day people may sign up for health insurance in 2014.