Policy

State insurance commissioners voice concerns over Obama’s shift

Update below Before his face-saving proposal to allow insurers to restore canceled health insurance policies even if they don’t comply with Obamacare health insurance, maybe President Barack Obama should have consulted with state insurance commissioners. His comments sparked a wide range of responses from these officials in states and districts around the country. Some commissioners are […]

Update below Before his face-saving proposal to allow insurers to restore canceled health insurance policies even if they don’t comply with Obamacare health insurance, maybe President Barack Obama should have consulted with state insurance commissioners. His comments sparked a wide range of responses from these officials in states and districts around the country.

Some commissioners are resisting the proposal but others were more supportive. It follows a huge outcry from people blindsided by notices that their health insurance policies would be canceled because they did not comply with Obamacare, despite campaign assurances that people could keep their policies if they liked them.

The Wall Street Journal cited a commissioner from Washington state who said he would not allow health insurers to honor the canceled policies.

Mike Kreidler, the commissioner for Washington state and an elected Democrat, said he didn’t think the move would be a good deal for the state. The paper also quoted William White, District of Columbia insurance commissioner, who said Obama’s move “undercuts the purpose of the exchanges.”

In California, commissioner David Jones asked health insurers there to comply with the change. Kentucky took a more direct approach. The paper reported that Kentucky Democratic Gov. Steve Beshear said he ordered the state insurance regulator to comply with the plan.

The head of the National Association of Insurance Commissioners told CNN that the proposal could undermine Obamacare. Jim Donelon is also the insurance commissioner for Louisiana:

“The problem is you can’t change the rules at the last minute when the game’s about to start. And the rules have given benefits to lots of policyholders – guarantee issue, caps on coverage for older policyholders,” Donelon said. “It threatens the solvency of the system and it threatens to spike the cost to policyholders across the board. So, each state will have to make that determination for themselves. But at the NAIC level, we had two calls yesterday in the aftermath of the President’s announcement. And I was pleased and surprised at the unanimity that I found across the board in concern over what the President is proposing.”

The proposal raises a lot of questions about the logistics of health insurers restoring the policies within a relatively narrow time frame. Insurance companies have voiced concerns that these revisions will throw the insurance industry into chaos that could spur higher premiums.

The House of Representatives is expected to vote on a bill this afternoon. Rep. Fred Upton’s (R-Mich.) bill would allow insurers to continue offering plans that existed before ObamaCare. The Hill noted that the bill has four Democratic co-sponsors.

Update: Although the House passed the bill with 39 Democrats crossing the aisle, the White House has already said the president would veto it, according to Politico. Why? They said the bill would allow insurers to sell the old plans to new customers. Obama’s plan would reinstate canceled insurance policies only for people already enrolled.