Last-Ditch Plea? Health Insurers Try to Keep Healthy Customers

In an attempt to hang onto healthy policyholders ahead of the Affordable Care Act’s exchange launch on Oct. 1, some insurers are reportedly misleading policyholders that they may face major rate hikes if they don’t renew their plans ahead of open enrollment.

The Wall Street Journal is reporting insurers including Humana Inc (NYSE:HUM) and Blue Cross Blue Shield are among the companies being accused by state regulators of “misleading consumers” to motivate them to renew their plans.

Insurance companies likely want to keep healthy policyholders on board ahead of Obamacare’s rollout to help keep their premium costs down, says Nate Purpura, spokesperson for eHealth. The health-care reform bars insurers to discriminate against the elderly and those with preexisting conditions by charging them higher premiums.

Purpura says insurers stand to benefit from younger, healthy people renewing their plans, but this demographic might be better off going to the exchanges. Some consumers may be eligible for subsidies or may find lower-priced plans on state-exchanges, he says, which is why shopping around during open enrollment is key.

“Open enrollment is exactly that—open enrollment,” he says. “You can still shop around or apply for any plan that you want. Even if you take the early-renewal option, that doesn’t mean you can’t shop during the open enrollment period.”

Purpura says that open enrollment begins on Oct. 1 and ends on March 31, 2014—so consumers can change and update their plans during this time. Those who do not have health insurance may be confused as to whether they should enroll next month or wait until 2014, when coverage will actually kick in, he says.

“If you need insurance right away, how do you fill in that gap?” he says. “Some people will have the chance to apply for a non-reform plan, then renew their old plan, and shop multiple times over the next few months.”