Dive Brief:

• Insurers on California's ACA exchange are dropping patients who might otherwise qualify for subsidized ACA plans, and the state's insurance commissioner is crying foul, according to The Los Angeles Times.
• California Insurance Commissioner Dave Jones said the state's ACA health exchange is violating the law by canceling private coverage for about 95,000 patients because they might qualify for Medi-Cal, the subsidized state plan. By state law, cancelations of private policies may only occur if a customer fails to pay premiums, or if there is evidence of fraud or relocation to a new area. Just because a person might be eligible for Medi-Cal isn't grounds for cancelation under state law, he added.
• To lend a hand for those customers who may wake up one morning without health coverage, Covered California, the state's ACA exchange, said it reached an agreement this week with state and county health officials to ensure policyholders are moved into Medi-Cal on January 1. That's actually the reverse of the way the system is supposed to work, according to insurance commissioner Jones. The insurers are supposed to keep the private policies intact while the state works out a patient’s qualifications for Medi-Cal, Jones said. 

Dive Insight:

This is a tenuous situation, as Medi-Cal has faced a backlog of applicants, making some folks wait for months before getting enrolled. While the state reported that it has resolved much of the bottleneck, that isn't doing much to assuage Jones' concerns about how it all went down. "The law is very clear. They can't cancel people," Jones told the Times.

Amy Palmer, spokeswoman for the exchange, told the paper, "There will be no gap in coverage for these people. We will make sure Medi-Cal kicks in immediately."

Still, it's been suggested before that it's unrealistic to think that private insurers would not drop patients in order to shift them into subsidized plans. The tenor of the Times piece is that patients will have a safety net provided by the state, so it should all be okay, but Jones may take exception to a plan that puts the state on the hook for a possible violation of law by the exchange.

It will be interesting to see what action he may—or may not—take if Medi-Cal is unable to provide the promised coverage to the people being dropped from their private plans. If that happens, he may be forced to take a tougher stance than simply asking the insurers to reconsider their actions.