Are health insurers trying to trick individual policyholders into renewing before they can shop on new insurance exchange?

UPDATE, Sept. 25: The state has fined Humana $10 per letter, or $65,430, for sending the letters, Chris Kenning of The Courier-Journal reports.

State officials say Humana Inc. is misleading individual policyholders by telling them they can keep their current policy for a year at current rates or get a costlier policy that complies with federal health reform and asking them to choose by Sept. 20. That's 10 days before they will be able to "shop for less-expensive insurance that complies with the health care law, often called Obamacare, and possibly qualify for government subsidies to help pay for it," writes Laura Ungar of The Courier-Journal. "State officials are also reviewing a letter by Anthem Blue Cross Blue Shield asking people to "call now' to lock in 'today’s affordable rates'."

Humana's letter (Courier-Journal photo)
Ray Brundige of Louisville told Ungar that it’s unfair to rush customers into decisions before the exchange announces its coverage, premiums and subsidies. “They are not giving people the ability to make an informed choice, because the information is not yet out there,” said Brundige, 63. “They’re doing themselves and the community a disservice.” Democratic U.S. Rep. John Yarmuth of Louisville told her the letters “appeared to pre-empt people’s use of the exchange,” which opens Oct. 1.

The letters say, “Please choose one of these two options no later than 30 days from the date of this letter.” Kevin Gibson of Humana told Ungar that someone could still shop on the exchange and cancel their earlier coverage. He said Brundige's current $279-a-month policy would cost $619 because he now has "limited coverage, which will no longer be allowed on the individual insurance market under the health care law," Ungar reports.

"Anthem spokesman Tony Felts said urging people to renew their current policies before the health care law takes effect in earnest Jan. 1 is allowed under insurance regulations. He said the option to keep current rates will be available into mid-November, after the exchange is underway."

State Insurance Commissioner Sharon Clark said the Humana letter is "misleading intentionally" and has objected to the company. Kate Marx of Humana told Ungar, "We feel the need to clarify that although we've asked for a 30-day selection, we will continue to make ourselves available to assist members with plan selections until the end of the year." Policies sold on the exchange will take effect Jan. 1 but any policy can be canceled before April 1, said D.J. Wasson of the Department of Insurance.

Ungar writes, "Wasson said Anthem’s letter improperly conveys a sense of great urgency" because it says, “We can only offer current plans and rates for a limited time.” The letter, sent to all individual policyholders in Kentucky, does mentions that the exchange will offer subsidies.

"Department officials reiterated that insurers should be straightforward and truthful with customers, and not take advantage of uncertainty surrounding the health care law," Ungar writes. "And they said consumers should get educated about the law."

Insurance is complicated, on your best day,” Clark told Ungar. “It is just such a new environment.” (Read more)
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