California's health insurance exchange has declined a presidential invitation permitting insurers to grant extensions to more than 1 million customers with policies set to terminate at year's end.
Covered California officials said they were leery of giving insurance companies more time to terminate individual policies that don't conform to the federal heathcare overhaul, or were obtained after its passage in March 2010.
Chairwoman Diana Dooley said she was troubled by the impact of the cancellations, "But fundamental mitigation is not possible," she said.
"If I thought for a minute that by delaying it we could solve some of the problems I would delay it," added Susan Kennedy.
Any decision at the exchange's board meeting Thursday would have been conditioned on working out separate agreements with 11 health plans.
In a retreat, President Barack Obama announced last week that states could extend millions of canceled insurance policies for another year amid uproar over his broken pledge that those who like their plans would be able to keep them.
Several states, including Washington, Minnesota and Vermont, have rebuffed calls to alter their courses. About 600,000 Californians with canceled plans could expect to pay more for coverage.
Covered California Executive Director Peter V. Lee advocated maintaining the status quo while joining with the insurers to expand outreach. He and exchange officials argued that any extension could cause broad instability.
They said customers eligible for subsidies would be unnecessarily paying rates anywhere from 1.7-to-3.3 times higher than what is available through the exchange. They also warned about insurers offering "last-minute" renewals in an effort to outmaneuver competitors, destabilizing the the viability of the health law. The state also described meeting noticing deadlines as "a mess."
Other critics of extending non-compliant polices worried about increased rates because fewer younger and healthier people would be in the exchange risk pool.
But Insurance Commissioner Dave Jones rejected the argument that releasing insurers from the contract would harm the exchange or the state's implementation of the healthcare law.
Jones over the last two weeks has already negotiated two- and three-month extensions for some customers with two of the state's largest insurers.
In a letter to the state exchange Wednesday, Jones argued that many of the concerns were misplaced. The federal health law has a robust set of mechanisms to protect health insurers and offset impacts to the risk pool, Jones wrote.
Nearly 80,000 people enrolled in exchange plans through Tuesday.
Darcel Lee, executive director of the California Black Health Network, applauded the exchange's outreach efforts and said any delays would only add to her challenges to enroll new customers.
"This is one hot mess," Lee said. "We are going to be so challenged with explaining this to our constituents, who we already know are confused."
PHOTO: Kristy Farrington, a student at Sacramento State University, looks at a pamphlet with information on Covered California on Oct. 16, 2013.