Cancelled Insurance Survival Checklist
Posted by February 20, 2015in Insuranceon
Checklist for handling a cancelled health insurance plan
You might be getting some unexpected—and possibly unwelcome—news about your health insurance if you have a policy that doesn’t meet the standards of the Affordable Care Act (ACA). And if you’re getting that news, you’re not alone.
Thousands of Americans from Indiana to Texas are learning that their non-compliant health insurance plans are being cancelled by their insurance companies, according to The Washington Post.
The reasons vary why these plans don’t meet ACA requirements. Some plans don’t include benefits like maternity or prescription coverage, or they set costs above the law’s annual threshold. Many of the non-compliant plans are based on the policyholder’s health or excluded coverage based on preexisting medical conditions, both of which are no longer allowed, the Post reports.
It’s unclear how many American consumers might be affected by this round of cancellations. However, the cancellations are widespread geographically.
Why did these cancellations occur?
One reason behind the cancellations is that insurers have determined they can make more money by selling ACA-compliant plans that are often at higher premiums and may be subsidized by the U.S. government, the Post says.
Insurance companies are also concerned that some of the old plans pay out minimal medical benefits because they feature large deductibles or their policyholders are relatively healthy. With such limited plans, insurers run the risk of violating the ACA requirement to spend at least 80 percent of premiums on health care or pay rebates to consumers, according to the Post story.
Another insurer concern has involved the struggle to provide both pre-ACA and post-ACA plans, health insurance brokers told the Indianapolis Business Journal.
To be ACA-compliant, a plan must meet a set of 10 essential health benefits and pay for at least 60 percent of all expected health costs. Also, the ACA no longer allows insurers to charge customers more or less based on their health status—other than whether they smoke, the IBJ article says.
Some customers whose policies were cancelled could see a big spike in premiums, according to the IBJ.
What happens now?
So what do you do if your health insurance plan is cancelled? The following checklist walks you through the steps to understand the details of your cancellation and find your best coverage option for 2015.
If you decide to purchase insurance through the Marketplace, remember that you could face a waiting period of up to 45 days. You might need temporary coverage to protect you while you’re not covered. Click here to read more about your Affordable Care Act healthcare options, or get a quote for a short-term policy to bridge your coverage gap.