California's insurance commissioner on Thursday called on health insurance companies and the state insurance exchange to extend a deadline on individual policies through 2014 after President Barack Obama announced changes to his Affordable Care Act.
Commissioner Dave Jones said he asked Covered California, the state health insurance exchange, to release insurers from contracts in which they agreed to terminate policies as of Dec. 31.
``It was mistake to require that those policies be cancelled,'' Jones said. Obama extended that deadline on Thursday, conceding problems with the rollout of the Affordable Care Act and the federal website where people have been directed to buy insurance.
The announcement left insurance companies scrambling to figure out their next steps. In California, Jones said that more than 1.1 million customers have received notices canceling their existing coverage as of Dec. 31.
He said he is calling on insurance companies to continue offering the policies because of the promise Obama previously made that no one would lose their coverage because of the ACA.
``It is very clear the federal government told them they could stay in their existing plan,'' Jones said at a news conference in downtown San Francisco.``There was a commitment made to them.''
The federal law required minimum levels of coverage in individual insurance plans, which led many companies to terminate current policies even before the law required it at the end of 2014, partly to get more people into the mandatory, more comprehensive policies.
The California Association of Health Plans said the state should stay on track with its current plan.
``Reversing course now could cause a significant disruption in the marketplace, given that rates and benefit plans for 2014 have already been set by Covered California,'' association President and Chief Executive Patrick Johnson said in a written statement.
He said extending policies that are not compliant with the federal guidelines could cause further rate increases for consumers and add to the imbalance in the state's insurance marketplace by skewing the pool with more older, sicker people.
``The entire underlying premise of the ACA balancing costs of the young, old, sick and healthy has been left adrift with this announcement,'' he said of the White House decision.
Jones called those claims disingenuous, noting that more than half of the 1.1 million affected policyholders will not qualify for a federal subsidy and thus be part of the insurance pool.
Covered California announced Wednesday that nearly 59,000 Californians enrolled in coverage from Oct. 1 to Nov. 12, although the figure includes many customers who have yet to pay a premium.
The agency did not immediately respond to a request for comment from The Associated Press on Thursday.