Small Business Majority Commends Covered California on its Refusal to Allow Cancelled Insurance Plans to be Sold Outside New Marketplace

Small Business Majority commends Covered California̢??‰?s Executive Board for unanimously voting today to prevent insurers that are selling plans inside the new marketplace from selling policies that aren̢??‰?t compliant with the Affordable Care Act outside of the marketplace.

Last week, President Obama announced that states could extend insurance policies through 2014 that do not meet the expanded scope of required benefits under the new law. Following that announcement, California̢??‰?s Insurance Commissioner Dave Jones encouraged Covered California to let insurers selling plans in the marketplace to continue to sell the subpar policies that would otherwise be cancelled outside it. Covered California̢??‰?s Board voted 5-0 today rejecting that proposal, and to instead open a hotline starting Nov. 25 to help anyone with questions or concerns over cancelled plans or rate increases.

While this issue doesn̢??‰?t affect California̢??‰?s small group marketplace, it does impact the 2.8 million self-employed individuals (700,000 who are uninsured) and small business employees who are purchasing insurance through the individual marketplace. By allowing noncompliant insurance plans to be sold outside the marketplace, the risk pool inside it could be disrupted causing insurance rates to rise and defeating one of the key goals of the law.

We are disappointed that communications surrounding implementation of the law have not been more effective at informing small businesses of their insurance options. For many lawmakers, reforming the broken healthcare system continues to be more about playing politics than about supporting our small businesses and their hard-working employees. We want to ensure the stability of the marketplace so owners can find affordable and comprehensive insurance for their employees and themselves. Covered California offers businesses more competitive choices, which will help them lower costs and improve their bottom line.

As we move forward with full implementation of the law, Covered California should continue to stay the course, making smart decisions that ensure a robust insurance marketplace and help small businesses, their employees and all Californians get the most out of what the new marketplace can offer.