Anthem Delays Policy Cancellations
For the second time in a week, California Insurance Commissioner Dave Jones has intervened in a health insurer's plan to cancel individual policies en masse.
This time, Anthem Blue Cross of California's Life and Health Insurance Co. has agreed to delay cancellations for 104,000 individual policyholders by 60 days.
The cancellations were intended to go into effect on Dec. 31, but Anthem, a subsidiary of Indianapolis-based WellPoint, agreed to delay the cancellations until Feb. 28.
According to Jones' office, a computer glitch on Anthem's part delayed the dissemination of cancellation notices to policyholders, violating a regulatory mandate that they have ample notice their coverage is being terminated.
In some cases, Anthem policyholders received cancellation notices at the beginning of November with termination on Dec. 31. That time window was in violation of the 90 days Anthem is required to provide by statute.
To date, more than 1 million individual holders of healthcare coverage in California have received cancellation notices tied to the official rollout of most components of the Affordable Care Act in January.
The cancellation issue has created controversy for the Obama Administration, with critics of the ACA saying it violated a promise made by President Obama years ago that anyone can keep insurance coverage that they liked.
"Neither state nor federal law allows me to stop the 1 million cancellation notices sent to Californians, despite my opposition to these cancellations," Jones said in a statement. “We will, however, do everything within our power to extend existing policies where health insurers are not in full compliance with notice requirements.”
Jones' office said the postponed cancellations will save the policyholders up to $23 million if they choose to remain in their current coverage until the new expiration date. Anthem had offered many new policies at higher premiums, citing mandates in the Affordable Care Act to bolster coverage.
Last week, San Francisco-based Blue Shield of California agreed to delay the cancellation of 115,000 individual policies by 90 days, moving the date back from Dec. 31 to March 31.
Jones contended that policyholders in that instance required a 180-day notice because Blue Shield was moving its individual policy book of business from agency to the Department of Managed Health Care, essentially eliminating equivalent replacement policies. He said that move would save policyholders more than $28 million if they did not switch coverage before the deadline.
Blue Shield officials responded by saying the move to the DMHC was intended to consolidate the operations of two different companies offering similar types of insurance.
