Some Californians whose policies have been canceled are finding relief in a surprising place: from insurance companies that aren鈥檛 offering plans on the new Covered California marketplace.
Earlier this year, Aetna announced it would bow out of the state鈥檚 individual market, 聽effective Dec. 31. Cigna is staying, but is not offering any products on the exchange. Right now, both companies are accepting new customers into pre-Affordable Care Act plans.
Aetna plans are until Dec. 15; Cigna is offering pre-ACA plans through Dec. 23.
Anne Gonzales, a Covered California spokeswoman, confirmed that a carrier not offering plans on Covered California 鈥渃ould offer a noncompliant plan through 12/31/2013 but it would need to become compliant when it renews next year.鈥� So, consumers can enroll now, but when the policy comes up for renewal in 12 months, the plans would need to come into compliance with the ACA 鈥� and premiums would almost certainly go up. Plans could be noncompliant for a variety of reasons, including that they don鈥檛 provide free preventive care or they聽charge people more聽if they聽have a preexisitng condition.
Buyer Beware?
Jason Andrew, CEO of , says he has 鈥渢ons of letters鈥� on his desk from clients who have received notice that their policies were canceled. The policies they have been offered are 鈥渁ll more expensive and not as good of coverage,鈥� he says.
One of Andrew鈥檚 clients, Mary McEvoy Carroll of Menlo Park,聽had been paying $375 per month for a Health Net plan, with a $4,000 deductible, which is now being canceled. Her new ACA-compliant options ranged from $625 to $761 per month for a bronze plan. Andrew helped the 61-year-old Carroll sign up for a Cigna plan, and her new premium is $553 per month, with a $4,900 deductible. Andrew says this plan covers 鈥渁nnual wellness and preventive at 100 percent just like ACA compliant plans鈥� and has 鈥渘o less coverage overall鈥� than plans sold on the exchange.
Carroll says she had supported the ACA, and tries 鈥渢o be a good person, but 鈥榯his is for-the-greater-good philosophy鈥� is hard to swallow when it has a large personal impact.鈥�
But buyer beware 鈥� Andrew says that Cigna will likely have a rate increase in early 2014. In California, no regulatory agency has. ACA-compliant plans can only change rates once a year. For consumers buying plans now on Covered California, their rates are guaranteed for all of 2014.
In addition, pre-ACA plans are all subject to , which allows insurers to turn聽people with specific conditions away, or charge them more or exclude coverage of certain conditions 鈥撀燼 practice no longer permitted under the health law starting Jan. 1.
Carroll called the underwriting process 鈥渋rritating and time consuming.鈥� She said she needed to dig up all her health records from the last 10 years, 鈥渢hen you get a phone call and you are asked ridiculous questions. I use a prescription cream for reduction of facial hair. It鈥檚 not covered by insurance, but you have to admit to it.鈥�
The nurse who had called Carroll asked if she鈥檇 every had psychiatric counseling for the condition. 鈥淐an you imagine? 鈥楧octor, doctor, my facial hair is worrying me?鈥� Carroll said with an astonished laugh.
Advice: Check If You Are Eligible for Subsidy First
About 900,000 Californians have had their policies canceled because they do not comply with the health benefits required by the ACA. Last month, the Covered California board that the cancellations will stand, no extensions would be permitted, as President . Canceled policies will terminate on Dec. 31.
Of those 900,000 people, about one-third of them are eligible for subsidies. People can determine if they are eligible for a subsidy in seconds using on the Covered California website. 鈥淚f you鈥檙e subsidy-eligible,鈥� said Andrew, 鈥測ou鈥檙e really going to benefit by enrolling in the exchange.鈥�
But those who are聽in the聽1 percent of the聽Californians who have had their policies canceled and will pay more for comparable coverage聽might want to investigate these other options.