Insurance agency offers guidance on dropped plans

  • Posted: Wednesday, November 20, 2013 11:08 p.m.

COLUMBIA — South Carolinians who lost their health policies under the federal health care law will soon learn whether they can keep their plans for another year after all.

The state Insurance Department issued guidelines on Tuesday for insurers that want to extend coverage to clients who previously received termination notices.

Millions of policyholders nationwide have received such letters, despite President Barack Obama’s repeated promise that those who like their health plans would be able to keep it under the 2010 overhaul. People learned that, to keep coverage, they needed to switch to a more comprehensive, and often more expensive, policy that complies with the federal law.

The backlash over canceled plans, including from his own party, caused Obama to reverse himself last Thursday on part of the law, as he took administrative action to let insurers continue current plans for a year.

“It added a whole lot of confusion to an already confusing issue,” said state Insurance Director Ray Farmer. “We’re trying to make the most sense of it, so we can explain it to our carriers and they can provide information to our citizens.”

Farmer estimates the notices affected more than 150,000 people in South Carolina.

State law did not require insurers to provide the data, and the state’s largest insurer, BlueCross BlueShield of South Carolina, has refused to publicly say how many notices it sent.

But the Insurance Department will collect detailed numbers as insurers submit their intentions. Carriers must respond by Dec. 2. The agency will then announce which carriers are allowing customers to renew their policies, and which are continuing with termination plans.

Insurers will likely need to update their filings.

“Our department will be on standby,” Farmer said. “We will process those as thoroughly and quickly as possible.”

Farmer said he has yet to receive any guidelines from the federal government. However, given the short window between Obama’s announcement and when policies begin to terminate, “we think we need to go ahead and give direction,” Farmer said.

“South Carolina declines to enforce the 2014 market reforms that the federal government will not enforce for these specific policies,” the bulletin reads. “South Carolina will instead enforce its own laws during this transitional period.”

If conflicts arise with forthcoming federal directions, it continues, the state’s guidelines will overrule.

A BlueCross BlueShield spokeswoman applauded the agency’s responsiveness but said the insurer must wait for the federal Department of Health and Human Services.

“While we are poised to move forward, we are also obligated to include in our decision-making any additional guidance,” said spokeswoman Patti Embry-Tautenhan. “As there are still details to be worked out, we will communicate in full with our customers once all the directives are in place.”

BlueCross BlueShield is among several insurers offering plans to South Carolinians through the online marketplace created under the law.

A federal report released last week shows 572 South Carolinians managed to secure health insurance through the problem-plagued federal website in its first month. They were among 26,794 people covered by new policies across the 36 states where the federal government is running the marketplace, according to the Department of Health and Human Services.

So far, most South Carolinians shopping through the marketplace are choosing Consumers’ Choice, the cooperative announced Tuesday. Plans offered by the nonprofit -- one of 24 nationwide that the law created and funded as a way to drive competition -- cover 65 percent of residents enrolled between Oct. 1 and Nov. 1, said spokeswoman Adrian Grimes.

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