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How Medica Revived Zombie Health Plans

Christopher Cheney, for HealthLeaders Media, June 23, 2014

Halfway through the PPACA open-enrollment period, health insurance carriers in more than two dozen states had only about six weeks to resurrect non-PPACA-compliant policies. Medica found a way to revive 81 "zombie," or transitional policies.

Under fire for the persistent failures of the HealthCare.gov site and eyeing low enrollment numbers, President Obama last November extended the life of individual health insurance policies that did not comply with the new federal healthcare law. "You can keep your plan if you like it," he said.

For the more than two dozen states the idea of health plan extensions, which federal officials dubbed transitional policies, may have seemed nightmarish.

In North Dakota, Medica officials started talking about them around Thanksgiving. They called them zombie health plans.

The Minneapolis-based commercial insurance carrier had not planned for these policies leading into the 2014 plan year that began Jan. 1. Rather, says Craig Ashby, a senior director at the company, the zombies snuck up on them.

To comply with the Patient Protection and Affordable Care Act, Medica had a mechanism in place to transition 81 non-qualifying health plans in North Dakota to PPACA-compliant policies. Anyone enrolled in a Medica health plan also had the option to obtain a policy from other available carriers.

"We thought it was going to be pretty seamless," Ashby says.

When the White House changed course in November, halfway through the open-enrollment period for the new PPACA-spawned health insurance exchanges, Medica and other carriers in more than two dozen states had about six weeks to resurrect their zombie health plans.

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