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Two-year extension offered for canceled health plans

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Warding off the specter of election-year health insurance cancellations, the Obama administration Wednesday announced a two-year extension for individual policies that don't meet requirements of the new health care law.

The decision helps defuse a political problem for Democrats in tough re-election battles this fall, especially for senators who in 2010 stood with President Barack Obama and voted to pass his health overhaul.

The extension was part of a major package of regulations that sets ground rules for 2015, the second year of government-subsidized health insurance markets under Obama's law — and the first year that larger employers will face a requirement to provide coverage.

Hundreds of pages of provisions affecting insurers, employers and consumers were issued by the Treasury Department and the Department of Health and Human Services. It will likely take days for lawyers and consultants to fully assess the implications.

The cancellation last fall of at least 4.7 million individual policies was one of the most damaging issues in the transition to a new insurance system under Obama's law. The wave of cancellations hit around the time that the new HealthCare.gov website was overwhelmed with technical problems that kept many consumers from signing up for coverage. It contradicted Obama's promise that you can keep your insurance plan if you like it.

The latest extension would be valid for policies issued up to Oct. 1, 2016. It builds on an earlier reprieve issued by the White House.

Other highlights of the regulations include:

— An extra month for the 2015 open enrollment season. It will still start Nov. 15, as originally scheduled, after the congressional midterm elections. But it will extend for an additional month, through February 15 of next year. The administration says the schedule change gives insurers, states and federal agencies more time to prepare. This year's open enrollment started Oct. 1 and ends Mar. 31.

— New maximum out-of-pocket cost levels for 2015. Annual deductibles and copayments for plans sold on the insurance exchanges can't exceed $6,600 for individuals or $13,200 for families. While not as high as what some insurance plans charged before the law, cost sharing remains a stretch for many.

—An update on an unpopular per-member fee paid by most major employer health plans. The assessment for 2015 will be $44 per enrollee, according to the regulations. Revenues from the fee go to help insurers cushion the cost of covering people with serious medical problems. Under the law, insurance companies can no longer turn the sick away. The per-person fee has been criticized by major employers. It is $63 per enrollee this year, and is scheduled to phase out after 2016. Some plans, including multi-employer arrangements administered by labor unions, will be exempt from fees in 2015 and 2016.

—Treasury rules for employers and insurers to report information that's crucial for enforcing the law's requirements that individuals carry health insurance, and that medium-to-large employers offer coverage. Although officials said the reporting requirements have been streamlined, businesses see them as some of the most complicated regulations to result from the health care law. The Internal Revenue Service will collect the information, because it is in charge of dispensing tax credits for individuals and small businesses to buy coverage as well as levying fines on those who fail to comply. The individual mandate is already in effect; the employer requirement begins to phase in next year.

—Notice of a potential delay, optional for states, in a promised feature of new health insurance markets for small businesses. The feature would allow individual employees — not the business owner — to pick their coverage from a list of plans. The health insurance exchanges for small businesses have been troubled by technical issues this year. Small Business Majority, a group that supports the health care law, said it's disappointed. The administration says no final decision has been made.

It's not clear how many people will actually be affected by the most closely watched provision of the new regulations, the two-year extension on policies that were previously subject to cancellation. The administration cites a congressional estimate of 1.5 million people, counting those in individual plans and small business policies.

About half the states have allowed insurance companies to extend canceled policies for a year under the original White House reprieve. The policies usually provided less financial protection and narrower benefits than the coverage required under the law. Nonetheless, the skimpier insurance was acceptable to many consumers because it generally cost less.

The National Association of Insurance Commissioners, which represents state regulators, was skeptical of the change.

"Creating two tiers of plans — the compliant and non-compliant — could result in higher premiums overall and market disruptions in 2015 and beyond," said NAIC president Adam Hamm, who is North Dakota's insurance commissioner. Although Hamm is a Republican, the NAIC is nonpartisan.

Separately, the House on Wednesday voted to delay for one year the penalty faced by individuals under the law if they fail to sign up for health insurance. It was the 50th time Republicans have forced a vote to repeal, gut or change Obama's health overhaul.

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  • King Barry
    This ACA has destroyed any chance at affordable healthcare. We pay our own policies (yes, 2 to save money) and feel hostage to this horrid nightmare. Oh yeah, Harry Reid, we were cancelled, too.
  • The King speaks
    It boggles my mind at how this administration just waves it's hand and changes the law at will. I do not understand how so many intelligent people in our society pretend not to see through this administration and the way that they operate. Nothing wrong with a 2-year extension, but lets get it done the right way -- not by royal pronouncement.
  • What if you cannot get insurance?
    One person in my family retired and is not nearly old enough for Medicare. She has started a new business and cannot get health insurance. She makes too much for one category and too little for another. She is stuck". And, she needs her health insurance due to a few health problems! It is scary.

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  1. I took Bruce's comments to highlight a glaring issue when it comes to a state's image, and therefore its overall branding. An example is Michigan vs. Indiana. Michigan has done an excellent job of following through on its branding strategy around "Pure Michigan", even down to the detail of the rest stops. Since a state's branding is often targeted to visitors, it makes sense that rest stops, being that point of first impression, should be significant. It is clear that Indiana doesn't care as much about the impression it gives visitors even though our branding as the Crossroads of America does place importance on travel. Bruce's point is quite logical and accurate.

  2. I appreciated the article. I guess I have become so accustomed to making my "pit stops" at places where I can ALSO get gasoline and something hot to eat, that I hardly even notice public rest stops anymore. That said, I do concur with the rationale that our rest stops (if we are to have them at all) can and should be both fiscally-responsible AND designed to make a positive impression about our state.

  3. I don't know about the rest of you but I only stop at these places for one reason, and it's not to picnic. I move trucks for dealers and have been to rest areas in most all 48 lower states. Some of ours need upgrading no doubt. Many states rest areas are much worse than ours. In the rest area on I-70 just past Richmond truckers have to hike about a quarter of a mile. When I stop I;m generally in a bit of a hurry. Convenience,not beauty, is a primary concern.

  4. Community Hospital is the only system to not have layoffs? That is not true. Because I was one of the people who was laid off from East. And all of the LPN's have been laid off. Just because their layoffs were not announced or done all together does not mean people did not lose their jobs. They cherry-picked people from departments one by one. But you add them all up and it's several hundred. And East has had a dramatic drop I in patient beds from 800 to around 125. I know because I worked there for 30 years.

  5. I have obtained my 6 gallon badge for my donation of A Positive blood. I'm sorry to hear that my donation was nothing but a profit center for the Indiana Blood Center.

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