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Response mixed on health insurance cancellations change

For many, issue is still unsettling

RALEIGH, N.C. — A month after President Obama announced that people could keep insurance policies slated for cancellation under the federal health overhaul, the reversal has gotten a mixed response from insurers, state regulators, and consumers.

Many consumers complained in October and November after insurers notified them that their individual policies were being canceled because they did not cover preexisting conditions, hospitalization, prescription drugs, or seven other basic benefits required under the law.

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In pitching the overhaul, Obama had long promised that people who liked their policies could keep them.

Then Obama said Nov. 14 that companies could continue existing policies that don’t meet the minimum requirements if state regulators approved.

Reporting by the Associated Press shows that older policies are being allowed to continue in 36 states, either because officials allowed it after Obama’s announcement, decided not to intervene in any way, or had made a decision earlier in the year to extend noncompliant policies for a period of time.

Even so, insurers were given a choice of whether to continue the policies, and some declined to do so.

In Kentucky, Humana, United Healthcare, and Assurant chose to extend old policies while Anthem and Bluegrass Family Health opted against it. Seven companies in South Carolina are extending individual plans the federal law considers substandard, while six companies are extending plans in the small group market. Twenty are not participating.

In North Carolina, only Blue Cross and Blue Shield, which controls about 80 percent of the state’s market for individual and small-business policies, offered to renew plans covering 474,000 people that had been slated for cancellation. North Carolina’s insurance commissioner allowed the company to raise premiums by between 16 percent and 24 percent.

Prices on noncompliant policies are rising in other states, as well. Anthem Blue Cross in Maine plans to raise premiums by an average of 12 percent on its no-longer-canceled policies.

The Blue Cross provider in neighboring New Hampshire expects an average 7 percent increase, an amount that is in line with previous years’ premium increases. Blue Cross Blue Shield of Illinois said it would seek undefined price changes.

The problem has not been as pronounced in Massachusetts because the state’s own health care law already required insurers to offer many of the same basic benefits as the new national law.

Raleigh attorney Jeff Poley, 42, says he is fine with paying more for his current policy, considering what it would have cost him to switch to a new one. He has been covered with a high-deductible health policy from Blue Cross for the past two years, which currently costs $137 a month. The plan does not cover maternity and some other benefits required under the Affordable Care Act.

When he initially received a cancellation notice, Blue Cross said the closest plan that met all of the new federal requirements would cost nearly twice as much.

But after Obama’s announcement, Blue Cross offered to extend Poley’s old plan for another year at $170 a month. His wife is covered by a policy through her law firm.

‘‘I was glad for the one-year reprieve, but I would still like a permanent fix because I don’t need abortion coverage, I don’t need maternity coverage,’’ he said. ‘‘We as a family had made that choice, and we are two intelligent people who know better what’s good for our family than the government does.’’

About 15 million Americans buy policies as individuals, according to Families USA, a nonprofit organization that backs health reform.

Before Obama’s announcement, insurers sent at least 4.7 million policy cancellation notices, according to a tally by the Associated Press. The number is probably much higher because officials in nearly 20 states said they were unable to provide information on cancellation notices or were not tracking it.

Sabrina Corlette, project director at the Health Policy Institute at Georgetown University, warns that Obama’s decision last month could allow younger people with relatively few health problems to stay on bare-bones policies. That could lead to higher premiums in 2015 to offset insurers’ cost of covering people with more health problems, she said.

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