It's been awhile since I've posted due to trying to see every client I have along with renewing most of my groups with a December renewal date, but I thought I'd jump into the fray.
1. I've been amazed at how many times the Oval Office has made an announcement changing the law without due process. If a law is passed and someone wants to amend it, typically an amendment needs to be written and approved. This has not been the case with the Affordable Care Act (sorry, it's a beef of mine - I believe in following due process).
2. Now that the President has stated that insurance companies may be allowed to continue their plans up to the end of 2014, both the Directors of Insurance of each state AND the insurance companies within each state now need to make decisions.
3. The Director of Insurance (DoI) is the person who can decide whether to allow insurance companies to continue existing plans within that state. If the DoI chooses to disallow it, then it will be as if the President didn't make that announcement.
4. If the DoI says yes, the individual insurance companies can still say no. Insurance companies need to weigh the split in risk pools this may cause (or if they are pooling the risk pools, how the decrease in premium for existing plans will impact it). One of the reasons to force people onto the new plans is to get enough healthy people in the risk pool to pay for the unhealthy people. The whole risk model will change if this is the case and insurance companies need to carefully assess whether this makes sense. Furthermore, if insurance companies have already cancelled plans or people have chosen plans to migrate to, will the insurance companies be willing to go back and allow people to back on their old plans?
5. Let's say that insurance companies choose to continue existing plans. Policyholders should still see an increase in their premiums due to the new taxes that the Affordable Care Act has imposed. You have the $5.25/month belly button tax (transitional reinsurance fee paid for each person on a health insurance plan), person's portion of the health insurer tax (around 3% - 4% of the cost of the plan), and patient centered research outcome fee of $2/year. For a family of 4 whose current premium is $1000/month, this will mean the following extra costs: $21/month, $35/month (estimated at 3.5% health insurer fee), and $0.17/month pcori fee ($57.17/month total) assuming no other items included.
