Kansas Insurance Commissioner Sandy Praeger said that she expects health insurers doing business in the state to stop cancelling policies that don’t meet the minimum coverage requirements of the Affordable Care Act and reverse the thousands of cancellations already in process.

But, she said, it won’t be easy for Blue Cross Blue Shield of Kansas, the state’s largest health insurer, which Praeger said was “trying to do the right thing” by steering consumers into more comprehensive coverage.

“They (BCBS) are struggling, they want to do the right thing,” Praeger said. “But I think that they think they’ve been thrown a curve ball at this point because they’re going to have to make some changes and it may be costly.”

Mary Beth Chambers, a BCBS spokesperson, said on Thursday that the company was awaiting guidance from the federal government and from Praeger’s department about how to proceed. She said that about 35 percent of the company’s 27,000 individual policyholders had already been notified that they would need to choose new plans by Dec. 15 in order to have uninterrupted coverage starting Jan. 1, 2014.

Praeger and the companies are responding to President Barack Obama’s about-face decision to allow consumers to keep sub-standard policies without penalty through 2014. The president reversed course in the face of mounting bipartisan pressure from members of Congress who were being flooded with complaints from constituents receiving cancellation notices.

Coventry Health Care of Kansas, the state’s second largest insurer, doesn’t face the same challenge as BCBS because it made a business decision to hold off cancelling policies that came up for renewal before the end of the year, Praeger said.

Keeping policies in force that don’t meet the health reform law’s coverage requirements could also trigger higher premiums for policies sold on the new online marketplace because younger, healthier people could chose to keep those plans rather than shop for more comprehensive coverage.

“The potential pool of insured has changed,” Praeger said. “When they (insurers) thought they could price based on a mix of everybody, that was one thing. But now, if you’re going to let these healthier folks stay out of the mix for another year, there’s going to be an impact.”

Blue Cross Blue Shield could have sufficient reserves to absorb the cost increases, if the number of Kansans who opt to keep sub-standard policies is relatively low, Praeger said.

“They’re probably financially are able to absorb it, but is it right to ask them to,” Praeger said.

Maintaining sub-standard coverage for one more year creates real complications in the marketplace, Praeger said. But, she said, a decision by Congress to approve legislation being pushed chiefly by House Republicans that would allow consumers to purchase such plans indefinitely would “totally undermine” the law.

“That would be a huge mistake, a huge mistake,” Praeger said. -By Jim McLean, KHI News Service