Obamacare Will Cancel 50,000 More Plans Before November

Font Size:

Tens of thousands more Obamacare cancellations are going to pile up over the next month, potentially putting pressure back on the health-care law in the weeks before the election. 

Insurance companies across the country are slated to send close to 50,000 people cancellation notices before November, according to the Morning Consult. That includes at least 30,000 New Mexicans who will be kicked off their plans, the Albuquerque Journal reported Tuesday.

“We got together and said, ‘This would be the right time to make sure all the citizens in the state who had a plan that wasn’t ACA-compliant would have the opportunity to convert to one,” said New Mexico insurance superintendent John Franchini, apparently without any irony. The state decided in May not to extend plans not compliant with Obamacare past the end of 2014.

Another 14,000 people in Kentucky (mostly Humana customers) and 800 Moda customers in Alaska will receive cancellation letters by Oct. 1. Both states accepted three-year extensions of plans not compliant with Obamacare regulations, but top insurers are ending their plans early. It’s a financial boost for Obamacare exchange insurers (both Humana in Kentucky and Moda in Alaska offer exchange plans) to terminate their noncompliant plans.

This month, around 2,000 people will receive notices from Blue Cross Blue Shield of Tennessee. And Colorado officials admitted last month that another 2,000 customers would be losing their coverage this year, on top of almost 250,000 who had their policies cancelled in 2013. (RELATED: Another 2,000 Insurance Policies Cancelled In Colorado)  

Colorado and Tennessee state officials are scheduled to outlaw noncompliant health plans after Dec. 31, according to trade group America’s Health Insurance Plans.

Some states, though, reported low numbers — Maine officials have said just 40 people will lose their plans this year. North Carolina’s insurance department said it’s been notified that only 75 people will lose plans, but the number could be much higher because insurers in that state aren’t required to notify the government when they cancel a health plan.

It’s very difficult to pin down an exact number of insurance policies canceled due to the health-care law, but the reports keep coming in. When customers first began receiving notices in 2013 that Obamacare regulations had made their health care plans illegal, the public outcry at President Barack Obama’s outright lie that if you liked your plan you could keep it prompted the Obama administration to issue one year-long delay, and then another.

That pushed the politically controversial issue onto state governments — some of whom are very displeased with the Obama administration over the move. According to America’s Health Insurance Plans, just 27 states have granted three-year extensions of noncompliant plans.

But even in states that went along with the extension, insurance companies don’t have to keep offering the plans. In many cases, it’s much more beneficial for insurers to discontinue the noncompliant plans.

The millions-strong cancellations were partially intended to push already-insured customers — who are typically healthier and with less pent-up need for health care services — onto Obamacare exchanges by taking away their other options.

When the Obama administration extended the plans, many insurers were left in a bind because they didn’t see the influx of healthier, previously insured customers they had expected. This was a factor in the Obama administration’s decision to pave the way to expand a risk corridor program into handing insurers federal taxpayer funding.

The fight about Obamacare cancellations has cooled over the past several months, but now that notices are going out en masse all over again, the clear loss for Obamacare supporters has the potential to create problems.

In Alaska, where the 800 cancellations are a higher percentage of the state’s tiny population, Democratic incumbent Sen. Mark Begich has already taken hits for his support of the law — and is currently down in the polls against his Republican challenger, Attorney General Dan Sullivan. (RELATED: Alaska Physician Shuts Down Practice, Citing Obamacare)

If Republicans manage to pick up Senate seats in Alaska and Colorado in particular, their chances of winning the Senate majority will be much higher, according to The Washington Post. While Obamacare is still not the leading issue in the polls, anger over the cancellations could be used to the GOP’s advantage.

Follow Sarah on Twitter

Tags : obamacare
Sarah Hurtubise