Americans thinking about buying health insurance on their own later this year, or maybe switching to a different insurer, are probably out of luck. The policies are going off the market as a little-noticed consequence of President Barack Obama’s health care overhaul.
With limited exceptions, insurance companies have stopped selling until next year the sorts of individual plans that used to be available year-round. That locks out many of the young and healthy as well as the sick and injured, even those who can afford to buy without government subsidies.
“Now they’re stuck,” said Bonnie Milani, an independent insurance broker in Los Angeles, who says she warned her customers last year that the change was coming. “It just closes everything down.”
The next wide-open chance to sign up comes in November, when enrollment for 2015 begins in the government-run insurance marketplaces created by the health care law. Companies are following that schedule even for the plans they sell outside the federal and state exchanges.
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The health care law allows insurers to keep selling all year. But it also creates the conditions prompting them to stop.
The law, which requires nearly all Americans to be insured or pay a fine, bans insurers from rejecting customers because of poor health. The companies say that makes it too risky to sell to individuals year-round.
“If you didn’t have an open enrollment period, you would have people who would potentially enroll when they get sick and dis-enroll when they get better,” said Chris Stenrud, spokesman for insurer Kaiser Permanente. “The only insured people would be sick people, which would make insurance unaffordable for everyone.”
The change makes individual policies work more like the job-based plans that already cover far more Americans.
But those who act fast may still be able to get in this year, depending on where they live.
Following the lead of the government marketplaces, some companies are extending off-marketplace sales for a week or a month to help people who hit snags trying to enroll by last Monday’s deadline. Rules vary from state to state.
After those extensions, eligibility for coverage during 2014 is guaranteed only for people who experience certain qualifying life events, such as losing a job that provided insurance, moving to a new state, getting married, having a baby or losing coverage under a parent’s health plan.
Insurance broker Steve Bobiak of Frackville, Pa., said he learned only a couple of weeks ago that insurers were cutting off new policies.
“It’s lousy communication out there,” he said. “If we don’t know, my God, how do they expect other people to know? It’s terrible.”
A survey by the Kaiser Family Foundation in mid-March found that 6 out of 10 people without insurance weren’t aware of the Affordable Care Act deadline of March 31. The Obama administration, insurance companies and nonprofit groups scrambled to spread the word, often with messages that focused on the savings available to many people through government-subsidized plans sold on the marketplaces.
There wasn’t much public discussion about people who prefer to buy policies outside the state or federal marketplaces, sometimes finding better deals or options more to their liking.
Health and Human Services spokesman Aaron Albright pointed to a note buried on the HealthCare.gov website: It says “in some limited cases some insurance companies may sell private health plans outside the marketplace and outside open enrollment” that satisfy the law’s coverage mandate. It doesn’t say how to find any companies doing that. Albright had no further comment.
Gary Claxton, a health law expert at the Kaiser Family Foundation, said it’s “highly unlikely” that companies will offer such coverage after the deadline window fully closes. Some do still offer temporary plans, lasting from a month to a year. But those plans don’t cover pre-existing conditions and don’t get buyers off the hook for the law’s tax penalty.
Nate Purpura, spokesman for eHealthInsurance.com, which sells policies from 200 companies across the nation, said at this point he knows of none planning to offer major medical insurance after this month, except to people with qualifying life events.
For people trying to get an off-marketplace plan through an open enrollment extension, some insurers are selling them through April 15, and others through the end of the month. Purpura said eHealth will offer such plans in at least some areas of these states: Arizona, California, Georgia, Hawaii, Louisiana, Maryland, Michigan, Nevada, New Mexico, Ohio, Oregon, Utah, Virginia and Washington state.
Kaiser Permanente will offer extensions that mirror the state or federal marketplace in the area where a plan is sold, Stenrud said. The federal marketplace extension for online enrollment is April 15. But Oregon, for example, is giving marketplace buyers until April 30.
After that, Stenrud said, without a qualifying life event, the door closes until Nov. 15.