Last week, the Department of Health and Human Services (HHS) revealed that it is “encouraging” insurers to allow people to sign up for health insurance after the December 23rd deadline and into January for coverage that begins on January 1st.
This would give Americans who had their insurance cancelled extra time to purchase a plan without facing any gap in coverage. These Americans have been hurt the most by the website’s failures. They received cancellation notices in the past few months thanks to Obamacare. In return, they should have been able to purchase a new plan on the federal marketplace, but the website’s catastrophic launch has prevented them from doing so, leaving them with no coverage.
But allowing people to retroactively sign up for insurance is a risky move for insurers. A person could forego insurance until they become sick and then purchase coverage. Since insurers can no longer charge unhealthy people more than healthy ones, any people that enroll only once they become sick will increase insurers’ costs. It’s the same as a person purchasing homeowners insurance immediately after their house burns down.
However, the administration is not asking insurers to do this open-endedly, only through January so that people have additional time to enroll in a plan. This is also not something that insurers would widely publicize.
According to Reuters, insurers are meeting HHS half-way. The largest health insurance company in Kansas, BCBS, is giving enrollees until January 10th to purchase coverage that will retroactively begin January 1st.
One of the biggest insurers in the country, Aetna, is also taking up the administration’s advice as well:
Aetna Inc, one of the biggest players on the exchange, is going to extend the payment date until January 8, make service workflow changes to support the deadline shift to December 23 from December 15 and already planned to ensure customers will not miss important appointments, such as cancer treatments
This is an important development. If insurers allow people to purchase coverage that retroactively applies to January 1st, it will help mitigate the greatest consequence of the website’s terrible launch: that people who had their insurance cancelled will be unable to enroll in a new plan.
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