Dennis Domrzalski, Reporter- Albuquerque Business First
New Mexico’s three major health insurers have begun offering some of their customers a way to avoid dealing with changes in the Affordable Care Act for a year.
The insurers are offering individual and small group customers the option to renew their current insurance policies early instead of waiting for them to expire next year and face the changes under the ACA. Those changes include a set of health benefits required by the ACA and could cost employers and individuals more money.
Presbyterian Health Plan, Blue Cross and Blue Shield of New Mexico and Lovelace Health Plan are offering early renewals on their current policies, representatives from the companies told Albuquerque Business First. Customers that renew early and have their new contracts take effect before Jan. 1 can lock in their current policies for the next 12 months.
Critics of the early renewal efforts nationwide say they amount to cherry-picking by insurers as they try to lock in healthy employees and profitable policies ahead of the ACA, which takes effect Jan. 1. Those healthy employees will be “carved out of the risk pool for the new marketplace in 2014” and will “negatively impact nearly everyone,” said an Aug. 22 article by the Commonwealth Fund.
Three states — Illinois, Missouri and Rhode Island — have banned the practice, while seven other states have restricted the practice in some way.
New Mexico Superintendent of Insurance John Franchini said he has no problems with early renewals because they offer business and individuals a choice and time to more closely look at policies that will be sold on the New Mexico Health Insurance Exchange, as well as giving the exchange time to work out any glitches in its first year of operation.
“I thought it was not going to be an issue in New Mexico and the reason is that people should be able to have a choice,” Franchini said. “That could give them another six to eight months to make that choice.”
Once those early renewal policies expire in 2014, however, individuals and business will have to choose policies — complete with minimum coverage requirements — mandated by the ACA, Franchini said.
“It is not going to matter in another year, so why not allow them choices. This will allow the exchange” to correct any first-year glitches, and “I prefer a soft landing to chaos any day,” Franchini said.
“We are offering right now employers the ability to move to a Dec. 1 renewal if they would like to,” said Neal Spero, vice president of marketing and sales for Presbyterian Health Plan. “For employers it is a good thing. It gives members a year to stay on their current benefits and they can always make a move in the interim.”
BCBSNM has begun offering early renewal to its 29,000 customers who have individual policies as well as to groups with 50 or fewer employees, said company Vice President of External Affairs and Chief of Staff Janice Torrez.
“What is important for us here is that we offer the most choice to our members. It means that folks will have a bit more time to see what will work for them and if it makes sense for them to move to an exchange product or an off-the-exchange product,” Torrez said. “It really is about choice.”
BCBSNM Division Vice President of Sales Randy Shaffer said the firm is offering an impact analysis for its small group customers that will show whether the businesses will be better or worse off under the ACA in the next 12 months.
“We are going to have winners and losers. Some will benefit from the exchange and some will benefit if they keep their current plans,” Shaffer said. “We want to give them the option of choosing whatever is best.”
Lovelace Health Plan Chief Programs Officer Marlene Baca said the company is also offering early renewals to some of its customers.
The three officials said it was too early to gauge the interest in the early renewal offers.
The Commonwealth Fund article said the early renewals could lead to higher premiums for everyone in 2015.
“It is young, healthy people that the new marketplace needs in 2014 to keep premiums affordable,” said the article by Christine Monahan and Sabrina Corlette. “If only people who enroll in new plans in 2014 are more expensive to cover than insurers have accounted for in setting their rates — which have been coming in lower than anticipated in a number of states — insurers will need to make up for their higher risk the following year. That means higher premiums for everyone in 2015.”