Despite Obama's Proposal, California Health Insurers Want to 'Stay the Course'

Under the original terms of the Affordable Care Act, a million Californians would lose the health plans they have.

Today, President Obama proposed those plans be allowed to continue for another year.

But California’s health insurance industry is urging the state not to change course.  

The California Association of Health Plans (CAHP) says delaying the policy cancelations will have the exact opposite effect of what the law intended.

It says, Covered California will wind up insuring the people with more health problems, and health care costs will go up.

“There’s no reason to turn back to a time when people had policies with inferior benefits compared to what will occur under the new law,” says Patrick Johnston of CAHP.

Johnston says the federal law is working just fine in California.  

“The exchange is up and running, people are signing up, there’s no reason why people can’t transition to these standardized policies with good benefits,” says Johnston.

California’s Insurance Commissioner Dave Jones doesn’t agree with the industry, he agrees with the President.

He wants insurers to notify customers they have the option to renew existing policies.

But Jones says he doesn’t have the legal authority to force that.

“I will do everything within my power to urge that California’s insurance companies and HMOs follow the President’s call, and give existing policyholders the opportunity to renew policies into 2014,” says Jones. 

Jones says he’s also calling on Covered California to relieve insurers of the obligation to cancel non-compliant plans.