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Non-compliant insurance plans get 3-year stay

By Lydia Nuzum, Staff writer

West Virginians who enrolled in health insurance plans incompatible with the Affordable Care Act before its onset will now have three more years to choose a new plan, according to the state’s insurance chief.

West Virginia Insurance Commissioner Mike Riley said Gov. Earl Ray Tomblin made the decision to extend the allowable period for ACA non-compliant plans on April 10. On March 5, the federal government decided to allow those with non-compliant plans to keep them through October 2017 if their states and insurance companies allow it.

The decision likely will impact only a small portion of the population enrolled in the small-group marketplace. According to Riley, the governor based his decision on feedback from various insurers who indicated that some of their customers had renewed non-compliant plans through 2014, the previous deadline for switching to an ACA compliant plan. 

“It’s up to the carriers as to whether they want to offer non-compliant plans through that much longer period,” Riley said. “It seemed like a necessary decision. The original decision had placed the deadline at the end of 2014, but our carriers had reported to us that they had already offered some policyholders plans that they would retain through 2014. This was the best way to address it.”

Fred Earley, president of Highmark West Virginia, said his company has not decided yet whether it will extend non-compliant coverage to its small group customers. Highmark, the largest insurance company in the state, was the only company to opt into West Virginia’s ACA insurance marketplace.

“The Affordable Care Act has resulted in a good bit of disruption in the way small-group plans function,” he said. “In terms of the way we had rated the small group system, really for the last 20 years — which worked very well — the inclusion of the ACA changed that significantly. For some groups, it was better; for other groups, it was worse.” 

Earley said one of his concerns about allowing an extension is the effect it will have on Highmark’s risk pool for its small-group plans. A risk pool is a system of risk management that allows insurance companies to group customers together in order to lessen the costs of paying claims.

“Allowing this additional transition period is fracturing the small group risk market,” Earley said. “Some will be allowed to purchase a new product, and some will be allowed to continue on their non-compliant product. Whenever a risk pool is broken into smaller pieces, it will have adverse effects, so we’re still working on trying to balance that out.” 

David Mathieu, vice president of marketing and underwriting for The Health Plan of the Upper Ohio Valley, West Virginia’s second-largest insurer, said his agency had opted into the extension. Mathieu estimated that The Health Plan insures roughly 5,000 people in the small-group marketplace, and said the company felt extending coverage would be the best decision to help some of those customers.

“We have been permitted to offer these non-compliant plans through 2017,” Mathieu said. “Unfortunately, there was a period of a few months where some customers chose a plan, and what’s going to be confusing is that those customers who chose non-compliant plans during that time will have to stay on those plans [through 2014], while the other half, who have anniversary dates between July and December, have the opportunity to sign up for the plan we now have. Half of our folks will be compliant, and half will be non-compliant.” 

Brandon Merritt, a health- policy analyst for the West Virginia Center on Budget and Policy, said the decision impacts a small segment of the state’s population. He said roughly 55 percent of those insured through the state receive their insurance through a large employer or through PEIA, and more than 30 percent receive public insurance, such as Medicaid or Medicare. 

“All in all, this makes me feel like this won’t have a huge impact on the way the ACA is implemented,” Merritt said. “It shouldn’t impact the implementation in West Virginia much, because we have one of the smallest individual markets in the country.”

Reach Lydia Nuzum at lydia.nuzum@wvgazette.com or 304-348-5189.


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