Gov. Dannel P. Malloy announced Friday that the state won’t allow insurance companies to reopen health plans through 2014 that did not comply with the Affordable Care Act and had been retired.
The decision was largely symbolic because insurance companies have already declined to offer the policies. Malloy confirmed Friday that the companies would not reopen them even if they were permitted.
The move affects policies on the individual market only, not those sold through employers. Just under 53,000 Connecticut people are in policies that insurers are ending, either because their plans don’t comply with Obamacare standards, or for other reasons.
In a last-ditch hope for a fix on Nov. 14, President Barack Obama asked states to allow those plans to continue. But despite criticism from Republicans aimed at Malloy, it’s unlikely that the governor could have changed the picture. Even if those policies were to continue for an extra year, prices would have been higher, Malloy said Friday.
“The solution offered by the president a week ago doesn’t work in Connecticut,” Malloy said in an appearance Friday morning at the Connecticut Convention Center, where he opened the Connecticut International Auto Show. “It would disrupt the industry, but more important, the industry made it clear that they were not going to offer these policies.”
Malloy said he asked Connecticut’s health exchange, Access Health CT, for a one-week extension of the deadline to sign up for plans that take effect Jan. 1, to Dec. 22, to help accommodate people shut out of plans.
SNAPSHOT OF CONNECTICUT’S MARKET
(figures show number of people in affected individual plans, not number of plans)
Total covered: 108,287 (four companies)
In grandfathered pre-Obamacare plans that are being moved to ACA-compliant plans: 25,097
In grandfathered pre-Obamacare plans that are continuing: 14,130
In non-exempt plans that accepted option for early renewal to continue in 2014: 30,459 (41,169 were offered)
In non-exempt plans that are migrating to ACA-compliant plans: 38,601
Malloy joins governors in a number of other states, including Massachusetts, who have already reached the same conclusion. Typically, according to the Washington Post, states that are accepting the fix are the ones that did not embrace health reform and do not have their own exchanges operating.
Friday’s events provided rich political intrigue. Obama is able to say he tried to offer a solution but the states wouldn’t take it. Democratic governors such as Malloy — who is likely to seek re-election next year – are able to distance themselves from a Democratic president whose popularity is plummeting due to this very issue.
And Republicans took the opportunity to slam Malloy for rejecting a fix that they said would have helped Connecticut residents — even though Malloy had no power to compel insurers to offer plans they didn’t want to offer.
“Instead of acting on my call to bring the General Assembly into session to amend state law so that these policies could be continued, the Governor rejected my request and his insurance commissioner has told us to ‘forget about the numbers.’” said Sen. John McKinney, the state Senate majority leader. “But we can’t do that. Unfortunately for Governor Malloy, these ‘numbers’ represent real people.”
Based on figures released by Malloy’s office Friday, there are 52,988 Connecticut residents whose plans were dropped by insurers. That includes 27,891 people in 16,204 individual policies that were not compliant with the Affordable Care Act, but could have been extended for another year if insurers had opted to do so. Another 25,097 people in 15,057 individual policies were in plans that could have continued indefinitely because they pre-dated Obamacare, but were dropped by insurers.
GOP state chairman Jerry Labriola Jr. said in a written release that Malloy is “refusing to accept responsibility….By deciding to do nothing, Governor Malloy made sure that those with canceled policies will face higher costs for less coverage.”
They may have a legitimate beef with Obamacare for shutting out some customers’ policies but the fix was simply not workable in a state that carefully regulates the market. It’s too late for regulators to reconsider closed plans in time for a January enrollment.
And, insurers said, it might have led to higher prices on some other plans as insurers scrambled to rebalance their offerings.
“To those who think we should have a special session because there’s some magical way for us to fix the issue, I say you’re wrong,” Malloy said in response to the GOP critics.
For people closed out of old plans, the bad news is that prices on the individual market are up by 15 percent to 200 percent, Malloy said. The good news is that many residents are eligible for federal subsidies — households of four with incomes as high as $94,000, and one-person households with income as high as $44,000.
“We’re going to work with people, walk them through their options, and get them covered either on the exchange or with a private plan that makes sense for their needs,” he said.
Keith Stover, a spokesman for the Connecticut Association of Health Plans, an industry loybbying group, hailed Malloy’s announcement. “We think staying the course is the right and wise decision,” he said.
Officials at Anthem Blue Cross and Blue Shield of Connecticut, the state’s largest insurer with 46,000 individual members, and ConnectiCare, the third largest with 12,700, issued statements supporting Malloy’s decision.
Connecticut was already among the states that allowed insurers to continue non-compliant plans into 2014 — if they went through the regulatory process. The companies and customers that did continue those plans –19,251 policies covering 30,459 people — are unaffected by Friday’s announcement. Those numbers can still rise over the next several days if more people who were offered extensions elect to take them.