Many of the 280,000 Kentuckians who faced cancellation of health insurance under provisions of the Affordable Care Act can instead keep those policies for another year.
That was the message from Kentucky Insurance Commissioner Sharon Clark to the Interim Joint Banking and Insurance Committee Tuesday in Frankfort.
Clark faced aggressive questions from lawmakers who have zeroed in on the bungled message about the new law by President Barack Obama, who famously and repeatedly said those who liked their insurance could keep it under the new law. That turned out to not be true for some.
On Nov. 14, Obama — facing blistering criticism from Republicans mocking his promise — announced a one-year reprieve for policies that don’t meet the basic coverage requirements of the ACA, often called “Obamacare.”
But the decision to offer such policies is left to the insurance companies. Clark said three companies — Assurant, Humana and United Healthcare — will offer policy renewals “for one, 12-month period.” Another large insurer, Anthem, will not offer the one-year extensions under the “transitional relief” period in 2014.
About 130,000 of the 280,000 policies are individual plans, while another 150,000 or so are small group policies. But all of them offer less coverage than required under the ACA or fail to comply in some other way with the law’s provisions.
D.J. Wasson, DOI administrative coordinator, told lawmakers the department doesn’t yet know how many individuals may be affected by the companies’ decisions because the companies haven’t yet reported the data.
She told the committee that most of the policies failed to offer one of the “10 essential services” required under the ACA, usually a failure to provide mental health or maternity coverage. Wasson also told the lawmakers, “There is no mandate for abortion coverage.”
For much of the meeting, Republican lawmakers asked questions designed to highlight complaints about the law, while Democrats mostly sat by silently.
“I think this is a program to get the uninsured insured and the insured uninsured,” said Committee Chairman Sen. Tom Buford, R-Nicholasville.
Buford also predicted that on average, insurance premiums will eventually rise “35 to 41 percent’ nationally, though he later tempered that prediction. His original statement, however, prompted his co-chairman, Rep. Jeff Greer, D-Brandenburg, a licensed insurance agent, to speak up.
Greer said that in his 24 years as an insurance agent, health premiums had risen in all “but a couple” of years.
“They go up every year, and in a lot of years it’s double-digit increases,” Greer said. “Let’s look at this with inquisitive minds as to how to help our people.”
Many who purchase insurance on the individual market have typically been young and healthy. They buy “catastrophic” coverage that has lower premiums, but covers fewer services and includes high deductibles and out-of-pocket expenses.
Insurance companies were willing to offer those policies because they produced relatively fewer payouts, Clark said.
But the ACA requires insurance rates to be established through “community ratings” by calculating likely payouts over larger, more diverse populations — the same type of rating in large group plans offered through major employers. The law also requires all policies to cover those 10 essential services, including maternity and mental health services. And that means higher premiums for those younger, healthier populations.
Critics have ridiculed the requirement for maternity coverage for men or older women past child-bearing age.
But after the meeting, Buford acknowledged that nearly everyone insured through group plans are also paying for those coverages, and that such group plans cover the majority of working-aged Americans who have private health insurance.
He also acknowledged that the rate of growth in health care costs has been lower over the past three years, since passage of the ACA, than at any time since 1960.
Clark, the insurance commissioner, said the law requires health insurance companies to spend at least 80 percent of revenue from premiums on actual health benefits or rebate the difference.
Last year, Clark said, health insurance companies paid back about $5 million to Kentucky policyholders.
Kentucky, which set up its own enrollment website, called Kynect, has enrolled nearly 50,000 people, most through expanded Medicaid services. About 11,000 of that number have signed up for private and often subsidized private plans.
Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at firstname.lastname@example.org. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.
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