California, New York, and Massachusetts have all decided they won’t be giving consumers with plans canceled under the Affordable Care Act a chance to keep them. Gov. Dannel P. Malloy may announce whether Connecticut will join them later today.
Connecticut may be considered the insurance capital, but there are only four insurance carriers competing in the individual market in the state and at the moment no one has any idea how many plans may have been canceled due to the Affordable Care Act.
Insurance Commissioner Thomas Leonardi said earlier this week that of the 27,000 policies offered by Anthem—which has the largest share of the market—about 9,000 policies will be impacted.
The legislature’s two Republican leaders wrote Leonardi earlier this week and asked him to provide more detail about how he’s calculating the number of consumers falling off these plans that were not grandfathered under the new law. These types of numbers are generally not something the Insurance Department collects from the carriers that it regulates.
Sen. Kevin Kelly, a Republican who sits on the legislature’s Insurance and Real Estate Committee, said he’s offended that Leonardi has the time to go to the White House Wednesday, but is sending his deputy commissioner to Friday’s legislative hearing.
“The governor should direct the commissioner to show up at tomorrow’s Insurance Committee meeting ready to answer questions and be honest with the people’s representatives about the real impact of the Affordable Care Act in our state,” Sen. Kelly said in a statement.
In the past two years, the Leonardi has made five appearances before the Insurance Committee to testify on pending legislation. Currently, he is not on the schedule to testify Friday, but Anne Melissa Dowling, his deputy commissioner, is on the agenda of scheduled speakers.
It’s unclear if Leonardi was specifically invited to give testimony. The Insurance Department spokeswoman did not return calls for comment Thursday.
Last week, Sen. Republican leader John McKinney, who is also running for governor, said he doesn’t believe Malloy has the power to unilaterally accept Obama’s directive. He said the General Assembly would need to convene a special session and overturn legislation it passed in 2011 before Malloy could agree to what’s being called the Obama “fix.” McKinney said a simple directive from the president doesn’t change the underlying law, which Connecticut chose to memorialize in legislation..
For the past week Malloy and the Insurance Department have been reviewing their options and talking to insurance companies about what they would like to see happen.
After Obama’s announcement last week, America’s Health Insurance Plans’ President and CEO Karen Ignagni changing the rules now could destablize the market.
“Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace,” Ignagni, head of the national trade association for the health insurance industry, said. The danger is that if “fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase in the marketplace and there will be fewer choices for consumers.”
In the meantime, Malloy has been critical of Obama for attempting to make good on an often-repeated pledge that consumers who like their insurance plans could keep them.
In making that pledge, Obama took state insurance commissioners, insurance companies, and governors by surprise. His announcement forced states to reach a decision about how to treat these canceled policies.
“I think Washington has messed this thing up pretty badly. I’m not happy with them. We’ve done a great job here in Connecticut and I think that we can do a better job helping folks,” he said Tuesday.
Shortly after that at 11 a.m. the Insurance and Real Estate Committee will hold an informational hearing on Connecticut’s implementation of the Affordable Care Act.
How many people will be impacted?
Families USA, a national organization that supported the Affordable Care Act, released a report Thursday that said about 5.7 percent of Americans purchase their insurance in the individual market. Of those only 0.6 percent have incomes over 400 percent of the federal poverty level and would not qualify for a subsidy through the exchange.
According to the report, which used 2010-2011 Census data, about two-thirds of individuals in the individual market did not purchase insurance that lasted more than 12 months.
“The individual market before the Affordable Care Act was a transitory source of insurance and the “wild wild west” of health insurance marketplaces, with high out-of-pocket costs and few consumer protections,” the organization says in the report. “For most consumers who bought individual market coverage, it was their only health insurance option because they did not have an offer of affordable job-based coverage and their income was too high to qualify for Medicaid.”
Click here to read the Families USA report.