Hundreds of thousands of health insurance policies nationwide have been cancelled as a result of the rollout of the federal health care overhaul, contradicting President Barack Obama's promise that Americans who like their present coverage could keep it, Bloomberg reported. However, Iowa's largest insurer carrier said a step it took earlier this year means none of its policyholders must face that situation.

 

Wellmark Blue Cross and Blue Shield officials said this morning that the option it announced in June to extend coverage for existing individual and small group policyholders for another year, means that none of its Iowa customers will have to unwillingly lose coverage.


The Iowa Insurance Division allowed all Iowa carriers to extend their plan year on existing small group and individual coverage through 2014. Wellmark was the only carrier that provided that extension for individual policyholders and one of a few carriers in the state that provided a plan-year extension for small group policies, said Laura Jackson, senior vice president of Wellmark.

 

"If they have a Wellmark plan, they won't be forced out of their coverage," Jackson said. 

 

Wellmark Individual policies were automatically extended unless the policyholder notified Wellmark that he or she wanted to opt out, she said. Small group policyholders were asked to notify Wellmark if they wished to opt-in for extended coverage. 

 

Jackson said numbers were not yet available for how many individual policyholders have opted out of continuing coverage so they could shop for insurance on the online exchange. She said more than 80 percent of small group policyholders have opted to retain their current coverage for another year and she expects that percentage to increase.

 

The cancellations being reported come as a result of the 2010 Patient Protection and Affordable Care Act, which says that health insurance policies that fail to offer added benefits, such as prescription drug coverage and free preventive care, can't be sold after this year even if they're cheaper.

 

The health care law eliminates "substandard policies that don't provide minimum services," said Jay Carney, a White House spokesman, in response to the cancellations. The "80-plus percent" of Americans with employer plans or covered by government programs are unaffected.

 

However, as many as 80 percent of people who don't have a company-sponsored plan or insurance through the Medicare or Medicaid government programs may have to find new health coverage, said Robert Laszewski, an insurance-industry consultant in Arlington, Va. About 19 million people are included in this market.

 

According to an NBC News report, the Obama administration knew that "40 to 67 percent" of individual policyholders would not be able to keep their policies.

 

Because technical glitches that have kept people from using the government's exchange website to shop for health insurance, Americans may have only weeks to find replacement coverage, and many may end up paying higher premiums. Those who want plans that begin Jan. 1 must enroll by Dec. 15, either by mail, phone or the exchanges.

 

Plans bought before March 23, 2010, when the law known as Obamacare was enacted, can stay in effect under a "grandfather" clause.