Insurers Furious over New Obamacare Plan

Insurers are not too happy over the Obama administration's decision to extend individual-market health plans for a year.

In a statement released Thursday,Karen Ignagni, president of America's Health Insurance Plans said:

Making sure consumers have secure, affordable coverage is health plans' top priority. The only reason consumers are getting notices about their current coverage changing is because the ACA requires all policies to cover a broad range of benefits that go beyond what many people choose to purchase today.

Changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers. Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace. If now fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase and there will be fewer choices for consumers. Additional steps must be taken to stabilize the marketplace and mitigate the adverse impact on consumers.

Health insurance plans are upset because this throws a wrench in their plans for the new health insurance markets. Insurers have already set the prices they plan to charge in the 2014 insurance exchanges, and those relied on people transitioning out of their current plans (which would be phased out) and into these newer plans.

After Obama's announcement on Thursday, that may not happen at all. If insurers allow people to keep enrolling in their 2013 plans, it could cause issues with the risk pool in the new insurance marketplace because younger and healthy people could stay out of the exchange. Young people have been targeted to bring into the exchanges, leaving insurers with not-so-great options going forward.