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Thursday, November 14, 2013

Insurance commissioner: Arkansas will not use new "grandfather" rules to allow plans to continue past 2014

Posted By on Thu, Nov 14, 2013 at 3:36 PM

As we explained earlier today, President Barack Obama this morning announced that the administration would extend "grandfather" status to existing insurance plans, potentially allowing them to continue for existing customers until October 2015 even if they were not compliant with the new health care law. However, as we noted, insurance regulators in each state can choose whether to implement this new option or not. Arkansas Insurance Commissioner Jay Bradford told me that he plans not to allow renewals of non-compliant plans that would extend into 2015. 

"At this point in time, no," Bradford said. "We’re going to stay with our original bulletin. That gives them a year to at least assess the marketplace."

The original bulletin Bradford refers to allow carriers to use "early renewal": they can offer a one-year extension of a plan to consumers on Dec. 31, 2013, so that consumers can keep the plan through the end of calendar-year 2014, even if the plan is not compliant with Obamacare. All of the major carriers in Arkansas have used this option to give their customers the choice of an extra year. According to Bradford, at least 95 percent of plans in the Arkansas individual market will be offered to customers for an additional year via early renewal. Even if the state doesn't take advantage of the new grandfather rules, in other words, almost all Arkansans will be able to keep their plan through 2014 if they like. That was true before and that's true now.

But Bradford said the state will pass on using the new option offered by the Obama administration today to allow people to renew in 2014

It's just too late to change that track at this point in time.. . I think it would be confusing to change this at this late hour. Most people have made a decision. If I send out another bulletin and ask the companies...give them another decision to make…I don’t think that would be in our best interests. We’ve set our anchor on this and we ought to probably just go forward with it. 

Bradford said repeatedly "we're going to stay with our original bulletin that gives them 12 months." But he left a little wiggle room when I asked whether his decision was final. No, he said, but "I think this is what's in the best interest of the consumers at this point in time."

p.s. this is familiar terrain for readers of this blog but Bradford added that consumers should "do a thorough evaluation of what's best for you" rather than automatically opting to keep coverage for a year via early renewal. He noted that in many cases, customers can find better coverage on the Health Insurance Marketplace, and many will be eligible for subsidies that lead to cheaper deals than what they have today. 

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