About 1 million Californians who are due to lose their existing health insurance Dec. 31 may get a reprieve after all.
On Thursday, President Obama said he was encouraging insurance companies nationwide to rescind millions of cancellation notices and allow consumers to keep their current policies for at least another year into 2014.
Many policyholders have been irate at being required to find new coverage that complies with the Affordable Care Act, often at higher rates, after Obama repeatedly told Americans they could keep their health plan if they liked it.
Now it's up to insurers in the state and California officials on what happens next since Obama's move is optional, not mandatory, in the marketplace.
Obama noted that "this fix won't solve every problem for every person."
In California, the cancellation notices were prompted by a requirement from the state's health insurance exchange, Covered California, that all current policies end Dec. 31.
The one exception under the healthcare law has been individual policies that were in effect before it was enacted in March 2010 and weren't materially changed since then. Nearly half of the people in California's individual market have those "grandfathered" policies.
State officials have said they set the Dec. 31 requirement because they didn't want to give insurance companies the opportunity to hold on to their healthier customers for up to a year, keeping them out of the larger risk pool that will influence future rates.
Officials at Covered California couldn't be reached for immediate comment.
Insurance industry officials have warned that extending policies at this late date could lead to higher rates later on in new government-run exchanges.
"This puts the insurance companies, who have successfully complied with the law, in a hell of a mess," said Robert Laszewski, a healthcare industry consultant in Virginia.
"First, this gives insurers the 'option' of offering the extension. The blame for this cancellation issue thus moves to those insurers refusing to do it."
California Insurance Commissioner Dave Jones has recently required two major insurers to give short-term extensions to customers facing cancellations because the companies didn't meet state rules for timely notification.
Anthem Blue Cross will extend policies for 104,000 people until the end of February, and Blue Shield of California will allow 113,000 customers to stay on their current plan until March 31 if they wish.
Obama's announcement Thursday opens the door for much longer extensions through the end of 2014.
But consumer advocates say people should consider their options carefully because they may be able to find a better deal in the state exchange and qualify for federal premium subsidies.
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