One week after President Obama offered to let people keep their canceled health insurance plans for another year – if their insurers agreed to renew those plans – Gov. Andrew M. Cuomo has announced they won’t have the chance in New York.
Insurers here had been waiting for instructions on how to proceed since Thursday, when the president responded to heavy criticism by agreeing to let insurance companies offer the plans, deemed substandard under the Affordable Care Act, to members who wanted to keep them in 2014. Insurance companies here got their answer Monday and are happily proceeding with the state’s status-quo policy, which Cuomo and industry officials argue is working far better than the widely panned federal insurance exchange.
“You know, we haven’t had the kind of issues in New York on our exchange that they’ve had nationwide. Our program has actually been working well. The website has been working well. And we’ve had, actually, very good success with our program. So we don’t see any reason to change it now, because we’re not having those types of issues,” Cuomo said in response to a question at a news conference Monday on Staten Island. The announcement affects more than 137,000 people in Western New York who received cancellation notices for their plans, which in some cases are cheaper than the new insurance policies now being sold on the state insurance exchange.
However, industry officials said they have spent years planning for 2014 on the assumption that substandard insurance plans would be terminated, and they argued that resurrecting the plans at this late date would create logistical problems and foment consumer confusion.
“We have an exchange that is up and running. People are enrolling. We support the governor in saying we should keep the focus on what’s working and move forward with what’s working,” said Leslie Moran, senior vice president with the New York Health Plan Association, which represents managed care plans.
The Obama administration’s change of heart followed intense criticism from lawmakers and the public angered by the news that millions of Americans would lose their health insurance next year – despite the president’s assurances that people could keep their coverage if they like it.
The cancellation notices went out to people who have insurance considered substandard because it doesn’t include “essential health benefits,” such as pediatric dental coverage or wellness benefits. Obama on Thursday announced that his administration would now leave it up to the insurance companies to decide whether to let those members keep their plans for another year, provided the state’s insurance commissioner agrees.
In New York, health insurance companies said last week that they couldn’t move unilaterally on renewing the canceled policies without direction from the state Department of Financial Services, which regulates the insurance industry here.
No direction came Thursday, Friday or Monday, until Cuomo gave his response at the news conference.
Contacted Tuesday, BlueCross BlueShield of Western New York and Independent Health said they are treating the governor’s remarks as policy, and they don’t expect further notice from the state. Univera Healthcare spokesman Peter Kates said Univera still is awaiting official notification.
Asked whether the Department of Financial Services would have anything more to add, spokesman Matthew Anderson simply referred to the governor’s remarks.
Cuomo’s announcement was greeted with relief by insurers, who agree with the governor that the exchange rollout in New York has proceeded smoothly and any attempt to renew the expiring plans would have been a technical challenge.
“I think it would have been disruptive to the marketplace, and it would have added complexity unnecessarily,” said Nora McGuire, senior vice president and chief marketing officer for Independent Health.
As of Nov. 12, 48,162 New Yorkers had enrolled through the NY State of Health exchange – about half in a private plan and half in Medicaid – including hundreds in this region.
The insurers, the state Health Department and the legions of navigators hired to help people enroll on the exchange can focus their efforts on enrolling the uninsured and underinsured in coverage that meets minimum benefits standards, said Donald Ingalls, vice president for federal and state relations for BlueCross BlueShield of Western New York. “Also, it’s less confusing to members,” Ingalls said. The cancellation notices went out to people who had direct-pay insurance or coverage through the state-subsidized Healthy NY program – both options are expiring – and to people enrolled in small-group plans now deemed substandard.
Most people in this population can expect to pay less next year for coverage, the state has said.
Cuomo on Monday left the door cracked open for people who are concerned about losing their plans.
“If it’s posing a problem for someone we’ll certainly look at it, but we don’t have those kinds of problems here in New York,” the governor said.
Assemblyman Dick Gottfried, D-Manhattan, the chairman of the Assembly Health Committee, said the state’s focus should be on improving the insurance plans offered through the exchange. “Reviving inadequate products is not the way to meet people’s needs,” he said.