2-year Obamacare extension for non-Obamacare plans

The Obama administration will allow people having health insurance plans that don’t comply with Affordable Care Act (ACA) to keep them through October 2017, as long as states will allow it.  This is the second Obamacare extension for non-Obamacare plans.

History of Obamacare extensions

There are up to 1.5 million people who have health insurance through individual or small-group plans, that are non-Obamacare compliant. In November 2013, Obamacare announced a one-year  delay in the ban on “substandard” plans. About half of the states allowed their residents to keep non-compliant plans.

Under the new rule people will allow to keep those plans until as late as 2017, as long as they renew them by Oct. 1, 2016. It would be up to individual states whether to allow this 2-year Obamacare extension, and whether to allow both individual and small group members, or just one category. This extension is just for existing members; no new customers will be entitled to enroll in these policies.

Obamacare Extension: Other Factors

Whether the new Federal Government extension is viable will depends on other factors:

States

Insurance commissioners in each state must explicitly allow insurers to offer the “substandard” plans. So far only half of the states did it.

Insurers

For insurance companies preparing several years for Obamacare, there is a big hassle to cancel “substandard” policies, reinstate them now and cancel them again in a couple of years. Insurers may decide not to offer already cancelled plans.

Consumers

Insurers are only allowed to carry over plans that were offered in 2013, not to offer the new “substandard” plans. Therefore, natural turnover will reduce the number of people with such plans.

Change in Obamacare Open Enrollment for the next year

The Obamacare Open Enrollment Period for the next year is extended by one month. Instead of being run from Nov. 15, 2014 until Jan. 15, 2015, it’ll be run from Nov. 15, 2014 until Feb. 15, 2015.

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