You like your health insurance plan and you’d like to keep it — great! But what if your health plan is cancelled?
Since the Affordable Care Act (also commonly referred to as the “ACA” and “Obamacare”) was passed in 2009, there have been shifts in the health insurance market with each new open enrollment period, and those shifts may mean your health plan is cancelled.
These are four of the most common reasons for a health plan’s cancellation:
- Your health insurance carrier stopped selling exchange-based plans or exited the individual market completely
- Your state’s health insurance co-op is closing
- Your grandfathered or grandmothered plan was discontinued
- Your plan was cancelled for non-payment
We’ll talk in more detail later about options if your health insurance policy is cancelled, but if you’re looking for a quick, temporary solution to cover an unexpected gap in coverage, you could consider short term health insurance.
Short term medical insurance is not ACA-compliant, does not include essential health benefits and is not guaranteed issue – meaning you can be denied coverage due to pre-existing conditions or health history.
However, these plans may have lower premiums than major medical because they provide less coverage, primarily for accidents and critical illnesses that result in emergency care or hospitalization.
You can compare plan options and costs by obtaining a free quote.
1. Your carrier stopped selling ACA plans or exited the individual market completely
Each year brings changes to the list of insurance companies that participate in the state-based and federally facilitated ACA health insurance exchanges. When a plan is cancelled, insurance companies must provide you with at least 90 days’ notice in writing.[0]
Insurer participation in the ACA marketplaces is expected to improve in 2019. In fact, for the first time since 2015, there are more insurance companies entering the markets or expanding their footprints within states than there are withdrawals.[1]
Overall, however, the market has fewer insurers than in the early years of Obamacare, with an average of five insurers per state in 2014 (and only two states with only one insurance provider), down to 3.5 per state in 2018 and eight states with only one insurance provider participating in the ACA exchanges.[2] The more recent exits of major insurance companies include:[3]
- 2018: Aetna and Humana completely withdrew from the Obamacare marketplace.[4]
- 2017: Anthem announced it was exiting the exchanges in Indiana, Maine, Nevada, Ohio, and Wisconsin, and scaling back their exchange coverage area in California, Georgia, Missouri, and Virginia. Cigna exited the exchange in Maryland and UnitedHealthcare exited the exchange in Virginia.[5]
- 2016: 50 health insurance carriers left the ACA’s state-based and federally facilitated health insurance exchanges.[6]
If you find yourself in this situation, you should start exploring your options as soon as you get the notice of cancellation from your insurer.
Most individuals and families should carry major medical health insurance in order to have the most comprehensive long-term coverage available to them.
But what if major medical coverage isn’t the right fit for you? The monthly premiums may be too high, or maybe you just don’t find value in the extra benefits and services that major medical includes.
If you find yourself second-guessing major medical due to cost or coverage, there are a few options available to you:
First, see if you qualify for a subsidy for enrolling in a major medical plan from Healthcare.gov or your state’s marketplace.
If you need to enroll in a high-deductible major medical plan in order to make the monthly premium payments fit your budget, a medical gap supplemental health insurance plan may be able to help make your deductible more affordable.
If your insurance plan is cancelled outside of the ACA open enrollment period and you’re facing a gap in coverage, a short-term medical plan could help. These plans offer significantly less coverage than ACA-qualifying insurance, so be sure to read any short-term medical policy you’re considering very closely so that you’re aware of the many limitations and exclusions that are traditionally included in these plans.
And remember, they’re not guaranteed-issue, so you may be denied coverage when you apply due to a pre-existing condition or health history. That said, they may provide some level of protection for critical illnesses and accidents that result in emergency care or hospitalization.Get a short term health insurance quote to see availability and compare plans.
Or, if you’d just prefer to pay a lower premium each month for less coverage, a short term medical policy may be a good choice for you.
2. Your state’s health insurance co-op is closing
Minuteman Health of Massachusetts and New Hampshire withdrew from the Affordable Care Act exchanges in 2018,[7] leaving just four of the original 23 Consumer Operated and Oriented Plans (CO-OPs) operating in five states (Maine, Montana, Idaho, New Mexico and Wisconsin) for 2019.[8]
In 2018, there were only about 150,000 people enrolled in those remaining CO-OPs, down from more than a million enrollees in 2015, when the CO-OPs were at their peak.[9]
Despite the other failures, the remaining CO-OPs seem to be doing fine. Two of them announced rate decreases for 2019 and another increased rates by an average of less than 1%.[10]
If your state’s co-op is closing, you get an immediate open enrollment exception due to “involuntary loss of other coverage” and can enroll in a new ACA-qualifying major medical plan without having to deal with the lapse in coverage.[11]
If you want to review options which may have lower monthly premiums you could consider a short term medical policy. Again, they are not ACA-compliant, but they may have lower premiums than major medical because they provide less coverage.
3. Your grandfathered or grandmothered plan is discontinued
The ACA includes a “grandfather clause” that allowed you to keep a health plan purchased before the law passed in 2010. Though the Centers for Medicare and Medicaid extended the deadline twice, these plans eventually expired on Dec. 31, 2018.[12]
However, if your health insurance policy was purchased between March 23, 2010 – when the ACA was signed into law – and October 1, 2013, your plan is considered a “grandmothered” policy and has the following characteristics:[13]
- Grandmothered plans are not fully ACA-compliant, but must comply with more ACA regulations than grandfathered plans did
- 32 states still allow renewals of grandmothered plans
- 14 states and DC did not allow renewals of grandmothered plans.
- In some states policies purchased through December 31, 2013, are considered grandmothered.
Individual states can allow grandmothered plans to renew until as late as October 1, 2019, as long as they terminate by the end of 2019, but they are not required to do so.[14]
If your grandmothered[15] plan is discontinued, you can qualify for a special enrollment period. Your special enrollment period starts 60 days before and ends 60 days after your plan’s cancellation date. If you miss this window, you’ll have to wait until the next open enrollment period to enroll in a major medical plan.[16]
Your options if your plan is discontinued are:[17]
- Buy another plan from the same company. Your insurer must let you to buy any ACA-compliant major medical plan available to you.
- Enroll in a major medical plan through the ACA marketplace. This is a good option especially if you qualify for a subsidy.
- Obtain a major medical plan away from the ACA marketplace from a private health insurance provider.
If your grandmothered plan changes to include the ACA rights and protections, you have another set of options:[18]
- Accept the changes and renew the plan. Be sure to pay attention to potential changes in premium and deductible amounts.
- Enroll in a major medical plan through the ACA marketplace.
- Obtain a major medical plan away from the ACA marketplace from a private health insurance provider.
In either case, if you want to review options which may have lower monthly premiums you could consider a short term medical policy. Again, they are not ACA-compliant, but they may have lower premiums than major medical because they provide less coverage.
4. Your plan was cancelled for non-payment
If you miss one monthly premium payment, you’re probably okay, thanks to a grace period. But if you stop payments altogether, you could lose your coverage.
Learn more about what to do if your health insurance policy was cancelled due to non-payment.
Summary + Next Steps
There are a number of reasons why your health insurance plan may be cancelled:
If your health insurance carrier stopped selling ACA plans or exited the individual market, you can sign up for a new plan during the next open enrollment period or if you need coverage now you can apply for a short term health insurance policy.
If your state’s health insurance co-op is closing, you can get an open enrollment exception and enroll in a new major medical plan without a lapse in coverage.
If your grandmothered plan is discontinued, you also qualify for a special enrollment period.
If your plan was cancelled for non-payment, you still have options – learn more about what to do.
If you want help from a licensed agent, call (888) 855-6837 to discuss your options.
