California Insurance Commissioner Dave Jones said he's taken steps Thursday to allow more than 1 million residents with terminating insurance plans to keep them through next year.
Jones said he's asked Covered California to release insurers offering plans on the exchange from the requirement to cancel policies that don't comply with the health care overhaul.
"I've asked Covered California to take this action immediately so that health insurers are free then from this contract provision and can follow the president's request, and my request, that they allow their existing customers to renew their policies into 2014," Jones, a staunch supporter of the federal health law, said in a conference call from San Francisco.
His move came as President Barack Obama said insurance companies could extend for one more year plans for individual policyholders that would otherwise be canceled.
Jones also called on all insurers to issue new notices offering existing customers the option to renew existing policies.
"It's very clear to everybody who has been following this issue the federal government told people in California and throughout the United States they can stay in their existing plans," Jones said. "These are individuals and families who did exactly what we've been urging them for years to do, which is to purchase health insurance ... So, clearly there was a commitment made to them and I think it's important, collectively, that commitment be upheld."
A Covered California spokesman, Roy Kennedy, said in a statement the exchange was assessing the impact and analyzing its options on how it will incorporate the modification into existing policy.
He said the exchange is aware of the "urgent need for clarity around this segment of policy and is working closely with health plans, regulators, and policymakers to quickly determine how the president's new guidance will be fulfilled for Californians."
The moves out of California come as the state's counterparts operating their own insurance marketplaces, including Washington and Oregon, are rebuffing President Barack Obama's invitation for states to extend the canceled policies. Obama has come under increasing pressure from congressional Democrats to delay the cancellations in light of the administration's problematic launch of its online web portal for three dozen states.
"We will not be allowing insurance companies to extend their policies," Washington Insurance Commissioner Mike Kreidler said in a prepared statement. "I believe this is in the best interest of the health insurance market in Washington."
Oregon Insurance Commissioner Laura Cali has said there were too many logistical difficulties to justify an extension.
In California, an estimated 1.1 million people have received cancellation notices informing them that their plans were out of compliance with the federal health care overhaul. Jones had foreshadowed his decision by negotiating temporary reprieves for about 225,000 customers with two large insurers - Blue Shield of California and Anthem Blue Cross of California.
Jones has said repeatedly that he disagreed with the state exchange's decision not to allow those plans to continue once the federal law took full effect.. Neither California nor federal law requires insurers to cancel noncompliant plans by Dec. 31. Jones noted that California insurers are not canceling small business customers -- "and I think that also is unfair," he said.
About 59,000 residents have enrolled in Covered California from its launch Oct. 1 through Tuesday.
PHOTO: Insurance Commissioner Dave Jones calls for Anthem Blue Cross to reduce it's planned rate increase on small group major medical policyholders during a news conference in Sacramento on Jan. 8. AP Photo/ Rich Pedroncelli