Bowing to intense political pressure and, apparently, his own chagrin over the botched launch of HealthCare.gov, President Obama says insurance companies can now renew health plans that they were planning to cancel because they didn’t meet the standards of the new health care law.
If you’re offered this option—and at this early point no one has any idea how many insurers will do so—you should think long and hard about taking it. Why? Many of the policies being canceled are awful ones that will leave you broke if you ever have a serious medical need. And you may be passing up the opportunity to get significant financial help to buy a better replacement policy.
Here’s how it will work. The only skimpy policies that can be extended in this way are those that were in force on Oct. 1, 2013, the day the ill-fated HealthCare.gov opened for business. They can be renewed for up to a year at any point during 2014, but not after that. (Wonks: Here’s a link to the letter that just went out to state insurance commissioners explaining the change.)
Moreover, insurers must include two crucial pieces of information that were missing from their original cancellation letters. First, they must disclose what services are not covered in the existing plan (for example, coverage for prescription drugs or outpatient treatment, two of the more egregious deficiencies I’ve seen). Second, they must include a clear explanation of the option to switch to a plan sold through their state’s Health Insurance Marketplace (often with financial help), and they must explain how to find that marketplace.
“The insurance industry has shown that, when left to their own devices, they would rather not give consumers all the information they need to make informed decisions,” said DeAnn Friedholm, director of health reform for Consumers Union, the policy and action arm of Consumer Reports. “That’s why it is imperative that consumer-friendly guidelines are put in place so that this new round of renewal letters is presented in a clear, standardized way that ensures customers understand what is not included in their plan and where else they can look for insurance options.”
If you get one of these letters offering to reverse your cancellation, here’s what you should do:
1. Pay attention to what's missing from the plan
Remember, even if you don’t need that particular service today, you could need it at a later date. And you won’t be able to switch to a different plan outside of open enrollment, which ends on March 31, 2014, and doesn’t resume until the following Oct. 15.
2. Use our free online tool, HealthLawHelper.org
It can help you find out whether you or your family members may be eligible for Medicaid, CHIP, or financial help to lower premiums or out-of-pocket expenses. If you renew your old policy, you won't be able to get this help.
3. Visit your state’s Health Insurance Marketplace
It can help you investigate your options. Here's a list of the state markerplaces.
4. Give HealthCare.gov a shot
If you are stuck in one of the states whose marketplace is run by HealthCare.gov, you should at least give the site a shot. If it doesn’t work for you, you can always extend your existing plan for a few months while the government’s techies continue their fixes. You have until March 31 to pick a different, and probably better, plan.
Health reform countdown: We are doing an article a day on the new health care law until Jan. 1, 2014, when it takes full effect. (Read the previous posts in the series.) To get health insurance advice tailored to your situation, use our Health Law Helper, below.
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