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By Jason Stipp and Vishnu Lekraj | 11-14-2013 12:00 AM

ACA 'Fix' Won't Cause Breakdown for Insurers

Allowing certain minimal-coverage health-insurance plans to stay in effect for one more year isn't a gamechanger for the managed-care organizations' prospects under the Affordable Care Act, says Morningstar's Vishnu Lekraj.

Jason Stipp: I'm Jason Stipp for Morningstar.

President Obama Thursday announced some changes to the Affordable Care Act and some of the plans that will now be allowed as part of the ACA.

Here to offer the details on those changes and how they might affect the managed-care organizations is Vishnu Lekraj. He covers these companies for Morningstar.

Thanks for joining me, Vishnu.

Vishnu Lekraj: Jason, thanks for having me.

Stipp: Obama did announce some changes to specific plans that had been affected by the rollout of the ACA. Can you walk us through what those changes are and what the new exception is?

Lekraj: There are a lot of moving parts with Obamacare, and this just adds more complexity into it. But basically what it boils down to is that there are some plans for individuals that weren't receiving health care either through an employer or other means--they bought the insurance by themselves on the market. They bought these plans, and these plans are lower-cost plans, and the benefits of these plans provided do not fit or meet the minimum benefits set out by the Affordable Care Act. And these plans were therefore canceled this year in anticipation of there being a vibrant and liquid public-exchange market for these folks to enter once their plans were canceled. That hasn't happened, and there's been a lot of blow-back because of it.

Stipp: They'll be able to hold on to these plans, [which] were going to be canceled before, but they won't be able to hold on to them forever necessarily?

Lekraj: No. It's a one-year delay for current plans in place. So the insurance companies can offer these plans to members who have these plans currently. They won't cancel them. But these members will probably have one year to determine what they want to do or how they can obtain health-care insurance--either through the exchanges or try to get it through their employer. It's just going to buy them one year of time.

Basically a lot … of political pressure was on the [Obama] administration and they had to acquiesce.

Stipp: If I don't have one of these plans right now, anything about this change where I could get into one, or is it just if I already hold one?

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