SIOUX FALLS, S.D. (AP) -- South Dakota will allow insurance companies to decide whether to allow a few thousand state residents to keep their health plans that otherwise would be canceled under the federal health care law.
The Division of Insurance made the announcement Tuesday in response to President Barack Obama's decision Nov. 14 to give companies the option of extending policies for another year. The state still had to approve the changes.
"The federal government was not dictating that we needed to do this. They left it up to the states," said state insurance director Merle Scheiber. "We had a choice."
Of the three Sioux Falls-based health systems approved to offer plans on the health exchange in South Dakota, Avera Health Plans and DAKOTACARE said they will give individuals and groups the option of keeping their plans. Sanford Health Plan said it will reinstate the policies that were due to expire on Dec. 31.
"We think it's best for the policyholders to have more time to choose the policy that makes sense for them," said Ruth Krystopolski, president of the Sanford Health Plan.
The organization already had sent out cancellation notices to 2,000 policyholders, she said.
Kirk Zimmer, CEO of DAKOTACARE, said 563 small groups and roughly 4,000 individual members will have the choice to stay with their current plan. Depending on their renewal dates, some people's coverage actually could extend into 2015, he said.
Deb Muller, chief administrative officer of Avera Health Plans, said about 400 individual policyholders who were set to lose their insurance now must decide whether to stay with it or transition into one that complies with the Affordable Care Act. People with lower incomes can also see if they qualify for tax credits for a plan under the federal health care law, she said.
"What's going to be the best interest of those folks? It's to give them the opportunity to choose," Muller said.