Gansler Advises Maryland Health Insurance Companies to Treat Consumers Fairly Under State Law and the Affordable Care Act

Cancellation notices must inform policyholders of full rights and options

Baltimore, MD (Nov. 18, 2013) – Attorney General Douglas F. Gansler today advised Maryland health insurance carriers that consumers who receive a policy cancellation notice must be informed of their full rights and options under state and federal law, and that such communications should be concise and easy to understand. Citing reports of insurance company abuses in other states where carriers have attempted to “intentionally evoke fear and mislead consumers about their options” under the Affordable Care Act, Attorney General Gansler notified insurance carriers in a letter sent today that they will be held accountable if they attempt to drop consumers from their rolls and push them into the exchange without offering a new plan.

“I am making it clear to insurance companies that they will be required to comply with the letter and the spirit of the law under the Affordable Care Act,” said Attorney General Gansler. “Our office will not stand for the abuses and fear-mongering that has been documented in other states.”

In the letter to eight Maryland health insurance companies, Attorney General Gansler spelled out the information that every Maryland consumer should receive if their carrier opts to cancel their policy. The Attorney General wrote that such notices, where applicable:

1. Should provide the 90-day notice required by Maryland law, as well as comply with all regulations set forth by the Maryland Insurance Commissioner;
2. Should include a statement, when applicable, that the insurer had the option to renew the policy for one year, but chose not to do so.
3. Should prominently mention Maryland’s health exchange; the availability of other health plans on the exchange, including those offered by other insurers, and; the availability of tax credits and other subsidies that lower premiums.
4. Should not automatically enroll individuals in a new plan outside Maryland’s health exchange.
5. If letters identify or suggest a new plan offered by the insurer as an option and any comparisons are made between the current plan to be canceled and that plan, comparisons must not only include actual premiums and deductibles, but also the scope of benefits covered, coverage of pre-existing conditions, and the availability of tax credits and subsidies.
6. If letters identify or suggest a new plan offered by the insurer outside the exchange as an option, they must include information on all plans offered by the insurer on the exchange, including information on actual premiums, deductibles, scope of benefits covered, coverage of pre-existing conditions, and the availability of tax credits and subsidies.

The health insurance carriers that received copies of the letter are CareFirst of Maryland Inc., CareFirst BlueChoice, Group Hospitalization and Medical Services Inc., Aetna Life Insurance Co., Kaiser Foundation Health Plan of the Mid-Atlantic States Inc., Mega Life and Health Insurance Co., Celtic Insurance Co. and United American Insurance Co.