Affordable Care Act may cause mass cancellation of health insurance policies
In the U.S., the Affordable Care Act is meant to make health insurance coverage more available to a wider range of consumers. The federal health care law initially received strong praise for its provisions that would allow consumers to find the health insurance coverage they needed without being met with staunch rejection from private insurance companies. The problem, however, is that the law’s provisions may actually lead to many people losing their health insurance coverage as the law takes effect in January of 2014.
Insurers may be looking to cancel policies due to provisions of federal law
According to the National Association of Insurance Commissioners, a growing number of insurers are planning to cancel policies before the federal health care law takes effect. The majority of these policies fall below the minimum coverage standards established by the Affordable Care Act. This means that these policies will become void when the law is fully enacted next year. The law provides insurance companies with the option of canceling plans or issuing new policies that comply with the standards of the Affordable Care Act. Insurers are not forced to continue providing policies to consumers.
Cancellations could affect millions of policyholders
If health insurance companies opt to cancel policies, a portion of the 14 million consumers in the individual market could lose out on their health insurance coverage. These consumers would be forced to find coverage through other private companies or through state-run insurance exchanges, which are set to begin open enrollment this October throughout the country. In Washington State, some 400,000 consumers are expected to be affected by this emerging issue.
Health insurance companies likely to issue new policies to replace canceled plans
Health insurance companies providing coverage to large employers are not expected to cancel policies in any way. The individual market is the only sector that is likely to see any impact from this practice. Those that do have their insurance policies canceled are likely to see new policies issued to them by their health insurance provider. New policies issued in this way are not likely to be significantly more expensive, though they may offer better coverage options.