Health insurance companies are looking to put off complying with health care reform rules that guarantee basic benefits and consumer protections -- and they've figured out how to do so for up to one more year.
The Los Angeles Times reports that big health insurance companies like UnitedHealth Group and WellPoint may attempt to skirt new regulations that take effect on Jan. 1, 2014 by renewing some of their customers in the meantime and letting them keep the coverage they currently have for as long as a year after the Affordable Care Act, or Obamacare, is supposed to kick in.
The health care law requires insurance plans sold to individuals who don't get benefits through their employers to cover a minimum set of benefits, prohibits companies from refusing to cover people with pre-existing conditions or to charge them higher rates than healthy people, doesn't allow health insurers to levy higher premiums on women than men, limits how much more older people can be made to pay, and guarantees customers can re-up their plans each year.
But those rules don't take effect until January -- or whenever a customer's current health insurance plan expires next year, which could be later. According to the Los Angeles Times, some insurers are weighing a lawful scheme in which they would renew customers' plans before 2014, thus preventing them from having to meet Obamacare standards until as late as Jan. 1, 2015.
Although adoption of this strategy could hamper the rollout of the health care law -- especially if some insurance companies target healthy people and leave sicker customers with higher medical bills to their competitors -- experts expressed skepticism that many health insurers would go to such lengths to evade Obamacare rules for such a short period of time.
"There are lots of things to worry about with the implementation of the Affordable Care Act. I'd put this at the bottom," said Robert Laszewski, who consults for insurers and other health care companies as president of Health Policy and Strategy Associates in Alexandria, Va. The "huge, complex administrative mess" of reopening customers' health plans to change their renewal dates would scarcely be worth the trouble, he said.
"There's no real return on investment," Laszewski told The Huffington Post. "This isn't going to move the needle on their financials."
Despite their opposition to much of what's in the health care law, and their ongoing campaign threatening big premium increases next year because of Obamacare, health insurance companies are unlikely to take steps to impede the law's implementation after it survived a Supreme Court ruling, Obama's reelection and numerous votes in Congress to repeal it, said Larry Levitt, the executive director of the Kaiser Initiative on Health Reform and Private Insurance at the Menlo Park, Calif.-based Henry J. Kaiser Family Foundation.
"Insurers have mostly wanted to get on with implementation and make it work and not put up roadblocks," Levitt told HuffPost.
Nevertheless, UnitedHealth Group and WellPoint at least haven't ruled out this method of delaying health care reform, although Kaiser Permanente has, the Los Angeles Times reports. (The health insurer is not affiliated with the Kaiser Family Foundation.) Online health insurance vendor eHealth Inc. also expects some health insurance companies to offer renewals to current customers before the end of the year, according to the newspaper.
Renewing their plans now could shield some younger, healthier people from increases in their health insurance premiums tied to market reforms and mandates that will make plans more comprehensive and more generous, said Sheryl Skolnick, co-head of research at CRT Capital Group in Stamford, Conn. For these customers, a renewal of their current benefits could let them wait out the uncertainty about health insurance premiums during the first year of Obamacare, she said.
Older, sicker people who are poorly served on today's insurance market and stand to gain the most from Obamacare could suffer the consequences, however. If there are too few young, healthy people paying for benefits on the health insurance exchanges to balance out the costs for those needing more health care, sicker people would pay bigger premiums to cover their collectively high medical bills.
Renewing pre-Obamacare plans also would provide health insurance companies with some benefit, especially if it enabled them to lock in young, healthy customers for longer, Levitt said. "This allows an insurer to kind of extend that transition" to the full implementation of health care reform, but it would be short-term and wouldn't give insurers much of an advantage, he said.
"Mostly what this amounts to is some benefit on the margins to insurers that do this and maybe a delay of six to 12 months," Levitt said.
Customers could refuse to renew and instead purchase a different plan on the law's state-based health insurance exchanges, which are scheduled to open Oct. 1 for people to shop for coverage that would take effect next year. But those who do renew their existing plans under pre-Obamacare rules wouldn't be eligible for the health care law's tax credits to help pay for their insurance, said Timothy Jost, a professor at the Washington and Lee University School of Law who has worked with federal and state officials on implementing the law.
Several states including New York, Oregon and Rhode Island are eyeing regulation or new laws to prevent health insurance companies from extending plans in advance of the new rules, Jost told HuffPost. By contrast, the Arkansas Department of Insurance advised companies how they could do so last month, the Los Angeles Times reports.