President Obama’s announcement this morning doesn’t give everyone who has received a cancellation notice the right to renew their coverage. Here’s the explanation why, from Doug Badger, who was President George W. Bush’s lead health-policy adviser and headed the White House Office of Legislative Affairs:
The HHS letter to state insurance commissioners provides that insurance companies “may” — not “must” — offer to renew plans, provided that their state regulators permit them to do so.
That is quite different from the federal guaranteed renewability requirement that has applied in the individual and small group markets since 1996. That law requires insurers to give their enrollees the option to renew their coverage, so long as they have kept current on their premiums.
Obamacare and its subsequent regulations stripped consumers enrolled in “non-grandfathered plans” of this choice, resulting in the cancellation notices. HHS has now informed insurance commissioners that non-grandfathered plans will not have to meet various federal requirements that take effect next January.
So the same federal government that prohibited insurers from renewing plans and required them to send cancellation notices now says that it’s up to state regulators and the insurers themselves as to whether people will be able to keep their coverage.
The federal government that created this crisis now proclaims that it’s not their problem. And for good measure, they ‘encourage’ state insurance commissioners to adopt a similar posture.
So it appears that under today’s announcement:
1. The feds are suspending (for existing plans that are up for renewal between now and next October) requirements that forced insurers to issue cancellation notices.
2. The state regulators are encouraged to adopt a similar transition rule.
3. If the state regulator does adopt such a rule, insurers may — but need not — offer their enrollees the option of renewing coverage.
In other words, this does not guarantee that people who like their coverage can keep it.