California insurer delays policy cancellations tied to Obamacare

Reuters

By Lewis Krauskopf

Nov 5 (Reuters) - Health insurer Blue Shield of Californiasaid on Tuesday it will delay policy cancellations for 113,000customers who were due to lose coverage at the end of the yearas a result of new requirements from President Barack Obama'shealthcare law.

Under pressure from California Insurance Commissioner DaveJones, Blue Shield agreed to allow customers on the individualinsurance market to receive a 90-day extension of their plans.

The California extensions come amid a national politicalstorm over hundreds of thousands of Americans losing plans thatdo not comply with the requirements of Obamacare. Obama hadrepeatedly pledged Americans could keep their plans if theyliked them as he rallied support for the 2010 law.

Blue Shield of California Life and Health Insurance Companyagreed to the delay after Jones threatened legal action againstthe company for providing only 90 days' notice to policyholdersinstead of 180 days, the insurer said. The affectedpolicyholders will be able to keep their plans through March.

"Allowing consumers to stay in their existing plans longeris the right thing to do for policyholders," Jones said in astatement. "State and federal law allow Californians to keeptheir current policies beyond December 31."

In an interview, Jones said the situation with Blue Shieldwas unusual: The insurer was switching to another stateregulator, a move that required it to give the longer notice.Jones said it was unlikely other companies that had issuedcancellation notices would extend their policies.

He estimated that 900,000 additional Californians facetermination of their policies this year.

"We're going though all the notices out there to make surethey're compliant with law...but this is a fairly uniquecircumstance," Jones said.

Jones said he was not sure what other state insurancecommissioners might be able to do, noting that regulation was afunction of state law.

The insurance department cautioned that policyholders whoare eligible for subsidies available through California'sinsurance exchange likely will want to select new policies byDec. 15 to start receiving the premium assistance at the newyear.

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