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Latest ACA postponement allows people to keep plans through 2016

Thursday March 6, 2014
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The Obama administration granted another extension to people with individual insurance plans that do not meet the requirements of the Affordable Care Act, allowing them to potentially stay in their plan through 2016.

A previous extension allowed people to stay in their plan through 2014. When the ACA was passed in 2010, Americans were supposed to be enrolled in a plan that was ACA-compliant by Jan. 1, 2014, unless they had an exemption. The new extension allows people to renew non-compliant policies until Oct. 1, 2016.

ACA plans require insurers to limit out-of-pocket spending and cover certain items and services in 10 categories: ambulatory care, emergency, hospitalization, maternity and newborn care, mental health and substance use disorder services, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services, and pediatric services including oral and vision care.

President Obama had promised everyone could stay in their insurance plan if they chose, but reportedly 2.5 million people received cancellation notices last year because their individual plans did not cover all ACA-mandated services and items or did not have tight enough limits on out-of-pocket spending such as deductibles and co-pays.

The ensuing backlash led the administration to offer the initial one-year delay, although states and insurers had the final authority to decide whether the non-compliant plans would be allowed to continue. The same condition applies to the new delay. Administration officials said about 500,000 people have maintained their non-compliant plans since the initial delay was granted.

Insurance company representatives had expressed disappointment with the initial delay, saying it could affect the sustainability of the ACA’s insurance marketplaces by allowing people to keep their plans. The thinking was that many who would decline to shop for more extensive insurance would be relatively young and healthy, the kind of people insurers hope to attract to offset the cost of covering everyone who applies for insurance. Before the ACA, insurers could deny coverage based on preexisting conditions or other factors.

The open enrollment deadline for 2014 is March 31, and the administration said there will be no postponement of that deadline.


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