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One-Year Renewal An Option For Cancelled Insurance Plans

Many New Hampshire residents who buy their own health insurance are finding cancelation notices in their mailbox. Anthem, the state’s largest carrier, says it’s dropping more than two-thirds of its individual plans because they don’t satisfy new regulations in the Affordable Care Act.

Linda Allen of Allen Associates in Manchester says her brokerage house has been flooded with calls about the discontinuation notice.

“I’d say our phone is ringing probably triple what it usually does with questions from our clients and from people who are not our clients,” says Allen.

Last month, Anthem notified 22,000 customers that their current plans aren’t being offered again in 2014 because they fail to meet requirements under so-called Obamacare, including mandates that policies cover services including maternity care and mental health benefits, and limit deductibles and other out of pocket expenses.

What Anthem’s first letter didn’t make clear to some people, however, is that you can renew your current plan.

At a legislative committee meeting on Tuesday, Anthem’s Director of Government Relations Paula Rogers said a follow up letter is in the mail.

“There is another communication going out to policyholders which I think more clearly than the discontinuation letters, lays out all of the options.”

Consumers will need to wade through these options quickly, since the deadline for renewing early is November 15th. Many customers will likely take them up on the offer, because any individual plans bought after January 1st from Anthem won’t include access to 10 of the state’s 26 hospitals.

There is a trade-off, though. Renewing now means you can’t get the subsidies available through the new health exchange marketplaces that, for many people, will bring down the cost of insurance dramatically.

Sabrina Corlett, senior research fellow at Georgetown University, says there’s another problem with early renewals.

“It could end up driving up insurance premiums in 2015 and beyond,” says Corlett.

Corlett says that’s because those most likely to renew are male, younger and healthier, who can handle the risk of a skinnier policy.

If they don’t buy into the health exchange this year, sicker people will drive up costs in that pool, forcing insurers to try to recoup that money in the out years.

“In some ways, it is sort of extending the pain of a market transition longer than it needed to be.”

To try to quicken the process, some states, including Missouri, Illinois and Rhode Island, are prohibiting early renewals.

Alex Feldvebel with the state Insurance Department says New Hampshire won’t be following suit.

“It is never a good thing to remove an option that consumers have.”

Feldvebel says people need to weigh all their choices before deciding to renew or purchase a different plan through the exchange. There’s still a little more than a week left to decide. 

Todd started as a news correspondent with NHPR in 2009. He spent nearly a decade in the non-profit world, working with international development agencies and anti-poverty groups. He holds a master’s degree in public administration from Columbia University. He can be reached at tbookman@nhpr.org.
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