WASHINGTON — Millions of Americans have been notified in recent weeks by their health insurance companies that their coverage will soon be canceled because of President Obama’s healthcare law.
To address the outrage over these cancellations, the Obama administration on Thursday outlined a new policy to allow insurers to extend current health plans into 2015.
Here are answers to some key questions:
Why are the cancellation notices being sent?
The Affordable Care Act requires health insurance policies that begin after Jan. 1, 2014, to offer new consumer protections.
Among other things, these protections prohibit insurers from turning down sick customers and require all health plans to offer a basic set of benefits, including prescription drug, hospitalization and maternity coverage.
Many health plans that were on the market did not offer these protections.How many people had these kinds of health plans?
It is difficult to say. Approximately 15 million people have a health insurance plan that they or their family bought on the open market. (Most Americans get health insurance either through an employer or through a government program, such as Medicare or Medicaid).
But not all consumers on the so-called individual market received cancellation notices.
Why didn’t all consumers with these plans receive cancellations?
Health insurers in most states have until Dec. 31 to renew health plans. If a plan is renewed before Dec. 31, it does not have to include the new protections in the health law.
Some insurance companies canceled policies up for renewal at the end of the year. But others opted to renew them early. That allowed consumers to remain on their current plan for another year, or until the end of 2014.
What does the new Obama administration plan do?
The plan would allow some consumers to remain on their current health plan even longer.
Instead of having to renew their current plan by Dec. 31, consumers would now have until Oct. 1, 2014. Since health plans typically last a year, that means a consumer could stay on a health plan without the new protections until Sept. 30, 2015.
Would all consumers whose policies were canceled be able to do this?
Insurance companies that have sent cancellation notices would have to offer those consumers the option to renew. Many insurers are reluctant to do this because they have already created new plans for next year.