Written by: Scott Lyon, SBAM Senior Vice President
Late last week the Michigan Department of Insurance and Financial Services (DIFS) opted to allow Michigan’s insurers to continue some health insurance plans that are not compliant with the Affordable Care Act (ACA).
With the latest round of delays and decisions being pushed down from Washington to Lansing, and now from Lansing to the insurance plans, carriers are facing one of the classic “damned if you do, damned if you don’t” decisions. Many carriers including, or maybe especially BCBSM, have invested millions and have built the operating systems for the new ACA metal level programs and all newly sold business must enroll in these programs. Then along comes the Obama administration with new delays and a purely (in my opinion) political decision to allow each state the option of allowing businesses to renew their current plans. Now, just last week, the state has pushed this decision down to the carriers and they must now wrestle with a couple of directions to consider:
- Run side by side operating systems for the next couple of years.
- Ripe the band aid off and move customers to the new plans ahead of when the law now requires.
It seems to me that if/when a carrier runs side by side operating systems, rate tables and all the other insider issues, that carrier runs the risk of systems and service issues that I would think are inherent with that option, not to mention the cost of dueling operating systems. If the carrier goes with option number 2, they run the risk of being labeled unfriendly to current customers, because now it is not ObamaCare that is forcing the change, it is big bad insurance carrier X forcing the change. Last, what should the carrier do with business that has already renewed (or is deep into the renewal process) and moved a new ACA compliant plan? So again, damned if you do and damned if you don’t.
While I know this is not really helpful, we are hearing a smattering of both from agents, probably leaning toward the option of just getting on with it and moving to the new metal level products. This is most likely because agents realize that any further delays simply add to the level of confusion and are just delaying the inevitable. The flip side is additional flexibility for their customers and delaying a potentially devastating renewal and rate increase. Balancing the operational, actuarial, agent services and customer care issues inherent in this decision is no easy task and I don’t envy the carriers – much is at risk.
I would like to hear from additional agents – what do you think? Send me a note at scott.lyon@sbam.org.