Insurance Rates

Think Your Health Insurance Policy Was Canceled? Think Again

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On Thursday the Obama administration announced a significant and largely welcomed adjustment to the terms of the Affordable Care Act: customers who like their health insurance plans will be permitted to keep them through the end of 2014, regardless of the terms of the coverage.

Prior the announcement, many Americans were panicking because the private health insurance policies they had purchased – which they had been promised they’d be able to continue with – were being canceled en masse. This is because, under the terms of the Affordable Care Act (ACA), insurance policies are required to carry certain benefits. For example, the ACA mandates that health insurance companies cover prescription drugs and preventative care regimens. Insurance policies that don’t provide these benefits were canceled, and new plans were offered to customers through national and state exchanges.

Unfortunately, though, the roll-out of these online exchanges has been anything but smooth. While Americans were waiting to be able to log in to the exchanges’ websites, they were receiving notices stating that they wouldn’t be able to keep their current coverage. This caused understandable frustration, which the president sought to ameliorate in his address to the nation on Thursday.

According to NBC News, which reported on the changes to the provisions of the ACA, the Obama administration has agreed to allow insurance plans that don’t comply with the requirements of the healthcare law to remain in effect throughout 2014.

However, the insurance companies offering these plans must provide customers with two key pieces of information:

  • A list of the benefits not covered by their plans
  • A statement that explains that customers have the option of shopping for a different plan on the state and federal exchanges

The administration’s hope is that, despite liking the cost of their current plans, customers will realize that better options are available and opt for policies that cover more. If not, they now have an entire year to adjust to the idea of shopping for a new plan.

So for now, it looks like Americans unhappy with the idea of taking on a new health insurance policy have been granted a reprieve. However, the success of the state and federal health insurance exchanges, which are still experiencing a host of technical problems, has yet to be determined.

About Lindsay Meredith

Lindsay is a high school teacher and personal finance blogger. She lives, works, and plays in the Washington, D.C. area.

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