Arizona announces permanent extension of grandmothered policies to no one's surprise


via the Arizona Dept. of Insurance & Financial Institutions:

Arizona Announces Extension of Major Medical Transitional Policies Until Further Notice

Phoenix - The Arizona Department of Insurance and Financial Institutions (DIFI) announced that insurers in the individual and small group major medical health insurance markets can choose to renew "transitional policies" for a policy year beginning after October 1, 2022, and thereafter until CMS modifies its non-enforcement policy.  Transitional policies are policies that individuals had in place before the Affordable Care Act went into full effect on January 1, 2014.  

This extension aligns with the extension announced by the Center for Consumer Information and Insurance Oversight (CCIIO) in Insurance Standards Bulletin Series – INFORMATION – Extension of Limited Non-Enforcement Policy through 2023 and Later Benefit Years.  The Bulletin gives insurers the option to annually renew applicable pre-2014 individual and small group policies until further notice.  Approximately 30,000 Arizonans have health insurance coverage through a transitional plan.

Insurers that elect to extend transitional coverage must send each policyholder a renewal notice that explains the offer to continue the transitional policy and includes information regarding any related price increase.  Conversely, insurers must send a 90-day notice for the final discontinuation of transitional plans.

The extension does not affect grandfathered policies issued prior to March 23, 2010 which can remain in effect as long as they maintain grandfathered status.

This comes as absolutely no surprise to anyone who's been following the ongoing pre-ACA "transitional" or "grandmothered" plan saga. As I noted back in April:

The way this program worked, it was up to individual states whether they would rip the band-aid off all at once (terminating noncompliant plans as of 12/31/13 as originally scheduled), or bumping the deadline out by one, two or even three years. Some states chose to stick with the original deadline, a few chose one or two years, and most chose to bump it out as long as possible.

Even in the states which did allow "grandmothered" plans, not every carrier chose to continue to offer them, resulting in the deadline for these plans spreading out from as early as 12/31/13 to as late as 9/30/17.

Since then, it's become a bit of a running joke, as each year the Centers for Medicare & Medicaid Services (CMS) has extended the deadline another year, and another, and another...even as the number of people actually enrolled in these policies dwindled by sheer attrition.

Last spring, CMS apparently realized that it was getting a little silly issuing proclamations letting the holdout states bump out the deadline for just one year at a time over and over again when there's hardly anyone still enrolled in these plans anymore anyway, so they just said "to heck with it" and gave their blessing for states to let grandmothered plans dwindle out to nothing on their own.

My colleague Louise Norris noted that Arizona specifically was down to just ~44,000 transitional plan enrollees as of 2020. According to the press release above, that total is down to just 30,000 Arizonans today. They don't clarify whether that includes both the individual and small group market or just the individual market alone, but it doesn't really matter at this point.