Correction: A previous version of this story mistakenly said that Maryland is not allowing insurers to renew existing plans. In fact, the state’s insurance commissioner is allowing renewals.
Health insurers in the District will not be allowed to continue offering policies that do not comply with the minimum-coverage requirements of the new federal health-care reform law, regulators announced Wednesday.
The announcement nearly comes nearly two weeks after President Obama, responding to a public outcry over the cancellation of many noncompliant individual health plans, said on Nov. 14 that he would allow state insurance commissioners to determine whether those plans could continue to be offered through 2014.
The District joins six states that, as of last week, had decided not to allow old plans to be renewed; another seven states, including Maryland, have announced that they will allow insurers to continue offering the old plans.
Hours after Obama’s announcement, D.C. Insurance Commissioner William P. White issued a statement criticizing the policy change, saying it “threatens to undermine the new market, and may lead to higher premiums and market disruptions.” A day later, on Nov. 15, White was dismissed by his supervisor, Deputy Mayor for Planning and Economic Development Victor L. Hoskins — a decision, mayoral officials said, prompted by White’s failure to clear his statement though proper channels.
The decision announced Wednesday largely comports with White’s original position. A statement issued by the D.C. Department of Insurance, Securities and Banking said the agency has determined that “the future rate impact of the transitional policy would be more significant to District residents than continuing implementation as intended.”
The statement also endorsed the federal law’s provisions requiring all health plans to offer a certain level of “essential benefits.” The plans that have been canceled often have strict limits on the types of care covered and the total amount of coverage offered.
The decision, the statement added, was made after input from the District’s health insurance exchange and local insurers, as well as other groups and individuals.
Insurers and policymakers have expressed concern that continuing to offer cheaper, less-comprehensive plans will mean higher premiums for individuals participating in the new insurance exchanges — the state-based marketplaces that are at the core of the federal reform. Group plans offered by employers have generally been less affected by the federal law’s new standards.
Chester A. McPherson, the insurance department’s interim commissioner, said in a statement that regulators “carefully considered all factors involved in this decision – District residents, the industry and the unique characteristics of our market” before making its decision.
“The department believes this approach provides more certainty for residents and carriers by subjecting all health plans to the same standard as outlined in the law,” he said.
White, in a letter posted Monday on an insurance industry Web site, said his statement was not mean to criticize Obama, “but rather to call into question the course of action being suggested to the state insurance commissioners, because of its potential impact on the District marketplace and its residents.”
“I did and said what I thought to be right in my role as the District’s top insurance official, but there will always be differences of opinion with sensitive matters of policy,” he wrote. “I am disappointed this has ended the way it did. We had worked hard to build something of real value for the District, and I thought I was doing my job by trying to protect it.”