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News: 2013 Press Release
For Release: November 5, 2013
Media Calls Only: 916-492-3566
Insurance Commissioner obtains delay of individual policy cancellations from Blue Shield
115,000 consumers may keep lower priced, wider network policies through first quarter of 2014
SACRAMENTO, Calif. - Insurance Commissioner Dave Jones announced today that he obtained an agreement from Blue Shield of California Life and Health Insurance Company (Blue Shield) to allow its California policyholders to keep their individual and family health insurance policies through March 31, 2014. Previously, the company announced plans to cancel these individual and family policies on December 31, 2013.
"Allowing consumers to stay in their existing plans longer is the right thing to do for policyholders," said Jones. "State and federal law allow Californians to keep their current policies beyond December 31. The existing policies are likely to have a broader network of medical providers and for those who are not eligible for premium subsidies, a lower cost than what is available in 2014. There is nothing in the healthcare reform law that requires insurers to narrow their provider networks, but some insurers are doing so, which means consumers will want to confirm that their doctors and hospitals are in the network before selecting new coverage."
The commissioner obtained an agreement from Blue Shield to send a new notice to consumers allowing them to stay in their individual market policies if they elect to do so and to provide the existing coverage through March 31, 2014, at the existing price with the existing medical provider network. If all of the policyholders elect to stay in their existing plans until March 31, the premium savings could be as high as $28.6 million. However, policyholders who are eligible for federal premium subsidies through Covered California will likely want to select their new policies by December 15, so they can start receiving premium assistance for January 1 coverage in their new plan.
"I disagreed with health insurers' decision to cancel policies and Covered California's decision to require health insurers selling in the Exchange to cancel existing policies on December 31," Jones added. "Health insurers and Covered California are allowing small businesses to renew their existing plans past December 31 and should have allowed individuals and families to do the same. Selecting the health insurance product that best meets your needs is an important decision and will take some time for those whose doctors are no longer in the networks of their existing health insurer. Policyholders should examine all their options and determine if they are eligible for a premium subsidy through Covered California."
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Blue Shield notified the Department of Insurance it sent cancellation notices to approximately 115,000 policyholders to inform them that Blue Shield would cancel individual market policies at the end of the year. The commissioner objected to Blue Shield's December 31 cancellations, because policyholders are entitled to 180 days' notice if their carrier is going to stop selling new policies in a particular market, which in October, Blue Shield notified the Department it would be doing.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California, regulating the $123 billion insurance marketplace. In 2013 the California Department of Insurance received more than 170,000 calls from consumers and helped recover over $63 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.