WASHINGTON (Reuters) - State insurance commissioners told President Barack Obama on Wednesday that his effort to stem a wave of insurance cancellations caused by his signature healthcare law could lead to higher premiums.
Obama met with representatives from the National Association of Insurance Commissioners to discuss the “fix” he came up with last week to calm the uproar surrounding millions of cancellation notices sent to holders of individual health insurance policies no longer legal under the healthcare law, known as Obamacare.
While taking responsibility for the troubled rollout of his law and apologizing for the promises he made that were not being kept, Obama sought last week to address the problem of canceled plans by giving insurers the option to extend them By one year, even if they did not meet minimum standards under the law.
The insurance market in the United States is heavily regulated at the state level. While individual state commissioners have no legal obligation to go along with Obama’s wishes, the White House move effectively put the onus on them for cancellations caused by the administration’s law.
Comments after the meeting reflected continued skepticism by some of the commissioners.
In a statement, the group “stressed their concern that different rules for different policies would be detrimental to the overall insurance marketplace and could result in higher premiums for consumers, without addressing the underlying concern of gaps in coverage.”
Since the passage of Obama’s Affordable Care Act in 2010, “state regulators have been working to ensure that plans are compliant with the new rules. These proposed changes are creating a level of uncertainty that we must work together to alleviate,” Jim Donelon, NAIC president and Louisiana insurance commissioner, said in a statement.
“We share the President’s goal of affordable coverage for consumers, and we will work with the insurance companies in our states to implement changes that make sense while following our mandate of consumer protection,” he said.
Insurance commissioners from Connecticut and North Carolina also attended the meeting along with Health and Human Services Secretary Kathleen Sebelius, White House domestic policy adviser Cecilia Munoz, healthcare adviser Chris Jennings, and White House counsel Kathryn Ruemmler. The meeting lasted about 50 minutes.
Since the messy rollout of the healthcare law last month, the administration has drawn criticism over its glitch-prone website and the revelation that Obama was wrong to promise that those people who liked their plan would be able to keep it if they wished.
The troubles have sent Obama’s job approval rating down to 37 percent, according to the latest CBS News poll.
Several million people stand to have their individual health insurance canceled at some point in 2014 despite a pledge by Obama that those who liked their benefits would be able to keep them under his law.
Obama’s decision to allow an extension requires each state to examine whether it can do so under existing laws.
Reuters checks have found that at least nine states, including Florida and Ohio, have said they will act on Obama’s offer to allow insurers to extend existing policies. But at least four others, including Washington and Massachusetts, do not plan to not implement the fix.
States are concerned the cancellation fix will threaten the financial stability of the new health marketplaces. Insurance companies say unexpected changes in the mix of healthy and sick, or young and old people who choose the existing plans over new Obamacare-compliant policies could mean that some insurers will be forced to raise premiums or lose money.
The White House said Obama told the commissioners his administration would work with them closely to ensure consumers are protected and health insurance markets are competitive.
“States have different populations with unique needs, and it is up to the insurance commissioner and health insurance companies to decide which insurance products can be offered to existing customers next year,” it said in a statement about the meeting.
Representatives from the NAIC told reporters after the White House meeting that they did not think the president was trying to pressure them to go along with his fix and recognized the difference among state insurance markets.
“He made it clear to us that he really understands the value of state-based regulation,” said Thomas Leonardi, Connecticut’s insurance commissioner. “It wasn’t the president trying to persuade us or trying to stiff-arm us or anything like that. He was wanting to make the point that he gets what our value is and how can he help.”
Donelon told reporters the NAIC would not be advocating for or against Obama’s fix.
The Obama administration has been in damage control for weeks because of the website problems and general souring on the law.
As part of that process, the White House released a report earlier on Wednesday saying the health law had helped spur stronger economic growth by contributing to slower increases in healthcare prices and spending.
Writing by Jeff Mason and Steve Holland Editing by Fred Barbash and Mohammad Zargham