Health Net closes the window on all existing IFP plans for 2013.
In communication with their brokers on September 10, Health Net said they would be closing all their California individual and family plans (IFP) as of December 31, 2013. The closures do not affect their small or large group plans. The announcement cited the development of all new Affordable Care Act compliant plans as a reason for scrapping all the old ones.
Out with old, in with the new Health Net plans
Health Net will be offering health plans through Covered California for open enrollment in October with effective dates of January 1, 2014. One of the conditions of participating in the health insurance exchange was that the carriers had to make all their plans outside of Covered California mirror plans offered inside the new health insurance market place. It was probably easier for Health Net to clear the table of their old plans and just start with new ones for the open market.
Building business in 2013
For the last year Health Net has been very aggressive on pricing their individual and family plans. It almost appeared as if Health Net was trying to buy some business in advance of the new Affordable Care Act state exchange opening for business. The plans had a great price point, but were real thin on benefits with high deductibles, few office visits with a copay and additional copayments for hospital stays.
Current plans thin on member exposure to costs
The plans probably would have been below the Bronze level of providing 60% actuarial value to the consumer. Since Health Net had to create new plans just for Covered California, it only makes sense to roll those plans onto the open market. So instead of creating a confusing mess of trying to update old plans, it looks like Health Net decided to scrap and replace.
Bold move to wipe all the plans off the table
The marketing fear is that current members will think the worse and jump ship to another carrier. That will be the next hurdle for Health Net; remind and convince their current members to stick with them. They are also closing their Grandfathered Plans, health plans in existence before the ACA, which they are under no obligation to do.
Covered California discounts on new plans
If you have an individual and family Health Net plan, it is going away. You will be given the opportunity to slide into another plan of similar or better value with all the ACA benefits. A very important point is that you or your agent checks to see if you are eligible for discounts or premium assistance if you purchase the Health Net plan through Covered California. You can only get the discounts when you purchase through the state health insurance exchange of Covered California.
Dark cloud with a silver lining
The big silver lining for many Health Net members whose plans are closing is that they will get better health insurance, with more covered benefits, for less money if they qualify for the premium assistance.
Health Net Broker Communication
Health Net will be closing all existing IFP plans (both grandfathered and non-grandfathered) as ofDecember 31, 2013. We will have new ACA-compliant plans across our portfolio effective January 1, 2014. Brokers and members will be receiving notifications regarding these closures at the end of September that will provide specific details of the members’ options, including:
- Transferring to an ACA-compliant, off-marketplace Health Net plan (if available in that area). We will provide members with plan information, change forms and rates.
- Information regarding plans offered on the Covered California® marketplace. Some members may be eligible for financial assistance.
We are excited to launch our new 2014 IFP ACA-compliant portfolio as it delivers a competitive line-up of affordable, value-rich plans designed to give your clients choices. We will be offering mirrored plans both on and off the marketplace.
###
