California health exchange votes to not enact Obama health plan 'fix'

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Calif. refuses Obama’s healthcare fix

No extensions on old plans in California

California’s health insurance exchange voted Thursday to not allow insurance companies to extend policies that do not meet current benefit requirements under ObamaCare, despite President Obama’s “fix” last week.

The Covered California Board of Directors unanimously decided to stick with its current approach of phasing out the non-compliant policies by year’s end, saying Obama’s request that insurers let Americans keep those plans through 2014 will not help consumers in the end.

“The board cited that extending the deadline offers no benefit to the consumer and may create confusion about accessing affordable health care coverage through Covered California,” it said in a press release.

One board member said Obama’s “fix” is not the solution to the problem of millions losing their health plans under the health care overhaul, saying the plan only delays the inevitable.

"There's no way to make the federal law work without this transition to ACA-compliant plans," board member Susan Kennedy said. "Delaying the transition isn't going to help anyone; it just delays the problems. I actually think that it's going to make a bad situation worse if we complicate it further."

The state insurance commissioner has said that 1.1 million Californians are receiving notices that their current individual health insurance policies will be discontinued in 2014 because they do not meet the benefit requirements of the federal health care overhaul.

That has angered some policy holders, many of whom will see their monthly premiums and deductibles rise sharply with the new plans being offered. It also flies in the face of promises Obama made repeatedly when he said people who liked their current health insurance policies could keep them under his health insurance reforms.

The president has since backtracked and has asked states to allow insurance companies to extend those older policies.

However, many insurance companies oppose extending the policies, saying doing so would undermine the new markets being set up under Obama's law. They also said they did not have enough time to rebuild policies they already had discontinued.

Officials described myriad complications if the board had agreed to modify the existing policy cancellation contract Covered California has with the state, including how much premiums could rise, whether consumers might be subject to two deductibles in one year and the tight timeline in which to make a decision, with the end of the year quickly approaching. Insurance companies would need to notify customers that they were re-offering the old plans and process customer payments before Dec. 31.

No matter what action the board had taken Thursday, Covered California Executive Director Peter Lee said the state cannot force any insurance companies to extend their already expired plans.

"Covered California has spent a lot of time structuring a market that is best for consumers," Lee said, cautioning that any changes could upset the intended fairness of the system.

States' responses to Obama's extension have been mixed, with many of those running their own health care exchanges saying they will not follow the president's advice and will let the older policies expire.

Because of the confusion over cancellations, the board on Thursday also extended the deadline to purchase an insurance policy for coverage to start with the new year, from Dec. 15 to Dec. 26. The deadline to make the first payment on that policy was extended four days, to Jan. 5.

The Associated Press contributed to this report