NAIC STATEMENT ON NON-COMPLIANT PLAN EXTENSIONS

3/5/14 The following is a statement from NAIC President and North Dakota Insurance Commissioner Adam Hamm on the Obama Administration's announcement regarding policy extensions and the responsibilities of state insurance regulators.

State regulators are committed to ensuring consumers have access to stable insurance markets in every state.  We share the President's and Congress' concerns about policy cancellations and the anxiety of the residents of our states when they receive cancellation notices.  However, we remain concerned about the negative impact this could have on the overall market.

While we appreciate that this delay only applies to renewals and not new sales, thus limiting its adverse impact on the marketplace, it still has the potential to create confusion surrounding available options for health insurance and uncertainty in the restructured marketplace. 

The offer to extend enrollment met a mixed response from state insurance regulators last fall when we saw about half of the states across the country allow an extension.  Our concerns about the impact of this proposal are not a reflection of state insurance regulators support or opposition to the ACA, but rather the practical and legal implications facing each state. This decision allows different rules for different policies which threaten to undermine the new marketplace. Creating two tiers of plans – the compliant and non-compliant – could result in higher premiums overall and market disruptions in 2015 and beyond. 

Last November, each state had to make a decision on whether to allow plan extensions. Once again, state insurance commissioners will  need to consider carefully how this will impact rates, consumer options, and the overall marketplace.  Even if the regulator decides to allow the plans to continue without coming into compliance, carriers may still cancel plans, as we saw in several states after the November announcement.

The NAIC looks forward to learning more details about this policy change. We remain committed to working to develop workable solutions that are in the best interest of consumers.