Blue Shield extends coverage for some in California

November 5, 2013: 1:47 PM ET
NEW YORK (CNNMoney)

More than 110,000 Californians will be able to keep their current Blue Shield of California health care coverage until March 31.

The insurer is extending the terms after the state's insurance department argued it didn't provide proper notice to consumers that it was canceling policies that don't meet Obamacare requirements.

Millions of Americans nationwide have recently learned that their current individual policies are being changed or canceled ahead of new Obamacare rules that kick in Jan. 1. This has caused an uproar. Many are questioning President Obama's pledge that people could keep their plans.

Holding on to a policy for an additional three months may please some angry consumers. But it is unclear how much these Blue Shield policyholders will benefit.

California Insurance Commissioner Dave Jones argues that the extension will allow consumers to temporarily remain in policies that could have lower costs and wider doctor networks than what they can find in the state exchange. These people now will have more time to shop for alternative plans and see whether they qualify for premium subsidies in the exchange.

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Blue Shield, however, says that the extension could leave policyholders on the hook for two deductibles if they keep their current insurance through March and then switch to another one. They may also be able to find less expensive coverage on the exchange, particularly if they receive subsidies. And they must enroll in a plan that meets Obamacare requirements by March 15 to avoid a gap in coverage.

"It's adding a little more confusion to an already confused marketplace," said Steve Shivinsky, spokesman for Blue Shield.

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