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From Health Law Daily, November 15, 2013

House passes legislation allowing consumers to keep their insurance plans in 2014; Obama threatens veto

By Sheila Lynch-Afryl, JD, MA

On Friday, November 15, the U.S. House of Representatives voted 261 to 157 to approve the “Keep Your Health Plan Act of 2013” (H.R. 3050), which authorizes health insurers to continue offering current individual health coverage in satisfaction of the minimum essential health coverage requirement of the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148). However, the Obama Administration preemptively stated in no uncertain terms that it “strongly opposes” the legislation, instead relying on the “administrative fix” it presented in response to consumers receiving cancellation letters from their insurers.

H.R. 3350. Representative Fred Upton (R-Mich.), Chairman, House Committee on Energy and Commerce, introduced H.R. 3350 on October 28, 2013, and 39 Democrats voted in favor of the bill. Urging members of the House to pass the legislation, Upton stated that “cancellation notices are now arriving in millions of mailboxes across the country” despite the President’s promise that Americans could keep their current health plan.

Section 2 of the one-page bill is entitled, “If You Like Your Health Plan, You Can Keep It,” and provides that an insurer that has in effect health insurance on the individual market as of January 1, 2013, may continue to offer such coverage in 2014 in the individual market outside of an exchange. Such health insurance coverage would be treated as a grandfathered plan for purposes of PPACA sec. 1501(b). According to the House Committee on Energy and Commerce, the legislation would “give Americans an escape hatch from Obamacare’s expensive premiums and broken website.”

White House’s opposition. Obama, however, promised to veto the bill. The Administration contends that H.R. 3350 would allow insurers to continue to sell new plans that don not offer coverage for people with pre-existing conditions, that charge women more than men, and that continue yearly caps on the amount of care that enrollees receive. According to the Administration, policies like those contained in H.R. 3350 will “reverse the progress made to extend quality, affordable coverage to millions of uninsured, hardworking, middle class families.”

Administrative fix. The White House released a fact sheet outlining how it is using its “administrative authority” to allow insurers to renew their current policies for current enrollees without adopting the 2014 market rule changes. In addition, insurers offering these renewals will be required to inform consumers who have received or will receive a cancellation letter about the protections that the plan will not include and how they can learn about options available to them through the marketplace. According to the fact sheet, whether consumers can keep their plans will also depend on their insurance company and the state insurance commissioner—but “it will no longer be the implementation of the new law that is forcing them to buy a new plan.” HHS will adjust the temporary risk corridor program, which the fact sheet said is designed to stabilize premiums as changes are implemented.

Upton opposed the administrative fix.

Other Congressional action. Meanwhile, in the Senate, Senator Mary Landrieu (D-La.) introduced the “Keeping the Affordable Care Act Promise Act” (S. 1642), which would allow an individual to “elect to continue coverage (offered in the individual market) in which the individual was enrolled on December 31, 2013, if such individual meets such other eligibility requirements (such as payment of premiums) as are applied with respect to such coverage” unless the insurer ceases operations. Such coverage would be deemed to be a grandfathered health plan under PPACA.

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