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Well intentioned but poorly conceived is my reaction to President Obama's offer to extend the current 2013 individual policies for one more year, until Dec. 31st, 2014. I watched the President's press conference yesterday - November 14th. It would be a logistical nightmare to extend the current 2013 individual products. President Obama got one thing absolutely right Buying insurance is complicated.
First the perspective of our Washington State Insurance Commissioner and then my thoughts. Our Insurance Commissioner, Mike Kreidler, who is a Optometrist and a Democrat, will not be approving this in our state.
A quote from Mike Kreidler's News Release:
"I understand that many people are upset by the notices they have recently received from their health plans and they may not need the new benefits today. But I have serious concerns about how President Obama's proposal would be implemented and more significantly, its potential impact on the overall stability of our health insurance market.
I do not believe his proposal is a good deal for the state of Washington. In the interest keeping the consumer protections we have enacted and ensuring that we keep health insurance costs down for all consumers, we are staying the course. We will not be allowing insurance companies to extend their policies. I believe this is in the best interest of the health insurance market in Washington."
It might take an insurance company a year to create a new product An insurance policy is a legal contract. You need insurance experts, actuaries, and lawyers to design a new policy. They create a product and send it to the Office of the Insurance Commissioner who must review every line, every benefit, every detail including the pricing. The OIC is there to protect consumers and regulate the carriers and licensed agents.
Products - whether life and health, or property and casualty are not for sale until they are approved by the OIC. New forms must be designed, created, and submitted to the OIC for approval as well as marketing materials. That takes time. It is a lengthy process. This process is playing out in fifty states, plus five U.S. Territories, as each state has a separate insurance division.
It was a three year process to adapt to the mandates of the ACA (Affordable Care Act) in our state. Insurance is a combination of regulatory law and complex actuarial calculations. The new ACA policies were created to comply with the new federal law. The pricing and actuarial planning is based on the premise that all people move onto the new products.
Insurance companies created new software and web platforms, hired and trained staff, trained agents, and created marketing materials. They have transitioned to meet the federal law by October 1st, 2013. They rolled out the new ACA products for a January 1 effective date.
Why can't a young healthy guy on a catastrophic plan keep his current coverage? Young and healthy citizens must enroll in addition to those with chronic health problems. We spread the risk over the entire poor of insureds. Everyone needs to be on the new plans to make it affordable. That is the ONLY way to keep the costs under control. That is the only way to extend policies to everyone without medical questions/underwriting. If only the 'sick' people move onto the new plan the premiums will sky rocket. An attempt was made to simplify the policies and spread the risk. The Medicaid expansion and the subsidies make the insurance affordable for low and middle income families.
The current individual products, in Washington State, end on Dec. 31st. They expire at year end.
Small group policies will terminate when you reach your renewal. Just as usual for groups you have a 12 month renewal which might end on any month of the year. If you have an April renewal your contract will end March 31st. Your current carrier, whether Group Health, Regence, Aetna, has created new policies for you. As is my practice we will look at the variety of options available to your group. I am very busy now working on my January groups.
I am highly trained, with 24 years in the insurance industry, and have been preparing for months with conference, trainings, workshops on a state and a a national level to assist you with your options, educate you, and help you make an informed decision for your family or your business - all at no extra cost to you. In addition I welcome the chance to assist your family and friends with individual products. I only work on a referral basis.
There will be no extension of 2013 individual policies in Washington state. Mike Kreidler's position is final. We are moving forward to what, I hope, will be an improvement for all of us.
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