Feds Try To Stop Insurers From Misleading Customers On Obamacare

In order to prevent consumers from being misled or deceived about Obamacare, the Obama administration is setting new rules about the notices that insurance companies should give customers in the individual health insurance market.

The new rules, announced Thursday, address two related issues: notice that must be given to consumers being offered the option of renewing their existing policies and notice that should be given to consumers whose existing policies are being cancelled.

When insurers are offering customers the opportunity to renew an existing insurance plan, part of the new Obamacare "fix," they must inform them that they can shop on the law's new marketplaces and they may qualify for tax credits or other financial assistance.

The required renewal letters will also be required to inform recipients about the differences between their current non-compliant coverage and what they would be able to purchase under Obamacare.

The White House's 'fix' gives state regulators and insurers the option of allowing renewal for non-Obamacare-compliant plans. For those companies that offer renewal under the fix, the notice is required.

For consumers whose existing polices are being canceled, the administration is urging but not requiring insurers to inform consumers that they can shop on the law's new marketplaces and they may qualify for tax credits or other financial assistance. Thursday's bulletin included sample language.

As the White House noted, and a TPM investigation documented, letters that some insurers were sending to their customers had left out key information about Obamacare and its benefits, such as the new options that would be available to consumers on the law's insurance marketplaces.

"This effort is a direct response to the President’s concerns that the small percentage of Americans receiving confusing letters from their insurance companies need clearer information about how to keep an existing plan, or how to choose a new plan with new protections available in the health insurance marketplace," Chris Jennings, deputy assistant to the president for health policy, wrote in a blog post.