This is from Chris Rauber in the San Francisco Business Times: (Hat tip to Jennifer Moore for the pointer)
Specific language in the contracts major health insurers signed with Covered California to participate in the exchange required them to cancel the individual coverage which is at the center of a growing national debate.
Anthem Blue Cross, Kaiser Permanente, Health Net and Blue Shield of California have confirmed to the San Francisco Business Times that their Covered California contracts, signed in August or September, required the cancellations. Other plans on the exchange are subject to the same contract language.
"All QHPs (of which we are one) had to sign that contract," said Darrel Ng, a spokesman for Anthem Blue Cross, referring to insurers known as qualified health plans. ...
Here's some of the relevant Covered California contract language:
"Contractor agrees that effective no later than December 31, 2013, except as otherwise provided in State Law, it shall terminate or arrange for the termination of all of its non-grandfathered individual health insurance plan contracts or policies which are not compliant with the applicable provisions of the Affordable Care Act. Contractor agrees to promote ways to offer, market and sell or otherwise transition its current members into plans or policies which meet the applicable Affordable Care Act requirements. This obligation applies to all non-grandfathered individual insurance products in force or for sale by Contractor whether or not the individuals covered by such products are eligible for subsidies in the Exchange."
The contract issue is significant, because many unhappy individual insurance plan enrollees — and much national and regional news coverage — have suggested that insurance companies made the decision on their own to cancel existing individual plans at year-end, and shift enrollees into other, sometimes more expensive alternatives.
The New York Times, for instance, in an Oct. 31 story with the headline "Why Some Can't Keep the Plan They Like," made no mention of insurers being required to make these moves....
Otherwise, many healthy people may have decided to stay with their existing individual and family plans, leaving Covered California — and participating insurers like Anthem, Kaiser, Blue Shield and Health Net — to deal with a potential deluge of sick people seeking coverage and not enough healthy ones to make the project actuarially sound.
Meanwhile, the California Department of Insurance confirmed to the Business Times that 1.8 million Californians are covered by individual plans, the first time a specific number has been verified by state officials since the controversy over individual policy cancellations heated up last week, when the Los Angeles Times (and, even earlier, Kaiser Health News) got the ball rolling....
(Emphasis added.)
