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Loss of insurance baffles some Ohioans



Published: Sun, November 3, 2013 @ 12:00 a.m.

Couple in 60s lose policy over lack of ACA-required maternity coverage

By Randy Tucker

Dayton Daily News

DAYTON

Mike Moyer is among an unknown number of Ohioans who recently found out they will not be able to keep their current health insurance plans because of the Affordable Care Act.

“I got a notice about three weeks ago that our policy would be canceled on Oct. 14 because it didn’t meet the standards,” said Moyer, a self-employed Famersville businessman who had coverage for himself and his wife, Betty, through Reserve National Insurance Co. “I called them up and asked them why our policy didn’t meet the standards, and they said because it didn’t include maternity coverage.

“I’m 64, and my wife is 64,” Moyer said. “What in the heck do we need maternity insurance for?”

The Obama administration had to scramble last week to explain why so many people would have to change their insurance because of provisions in the Affordable Care Act. Numerous times going back years, President Barack Obama has repeated the phrase, “If you like your health insurance, you can keep it.”

In most cases, that is still true, because the law allows policyholders to keep plans that were in effect when the law was signed in 2010 — even if they do not meet the new requirements for comprehensive coverage.

But if changes were made to a policy after March 23, 2010, the plan would no longer qualify for grandfathered status and would have to meet the new benefit standards.

Dayton Daily News readers have contacted the newspaper expressing outrage that they are being forced to shop for health insurance because their current plans do not include such benefits as maternity and newborn care, mental health and substance abuse treatment and other core benefits required under the health care law.

Only about 5 percent of the U.S. population buys health insurance on the individual market, and only a small percentage of the estimated 12 million to 15 million self-insured policyholders will be forced to change policies because of the new law, according to the Obama administration.

The vast majority of Americans with employer-sponsored health insurance have policies that already meet the new law’s standards, government officials said.

Experts say there is no way to tell exactly how many will be affected. But up to two-thirds of individual policyholders move in and out of new policies annually, which could disqualify their grandfathered status.

While Ohio insurance companies that sell individual policies were quick to point out that they are not “canceling” policies, they acknowledged that at least some of their policyholders will have to switch from health plans that do not comply.

“Medical Mutual has not canceled any grandfathered individual policies,” said Don Olson, a spokesman for the Cleveland-based insurer. “We will work closely with our non-grandfathered individual customers to transition them into an (Affordable Care Act)-compliant policy that suits their needs.”

Those comments were echoed by officials at United Healthcare, which, along with Medical Mutual and WellPoint, control about 80 percent of the individual health insurance market in the state, according to the Ohio Department of Insurance. And it’s clear the insurers — who serve anywhere from 300,000 to more than 500,000 individual Ohio customers — want to keep as many of those customers as possible.

“Our customers in grandfathered plans can keep their current coverage without any additional changes required by the Affordable Care Act,” said Ellen Laden, a spokeswoman for United Healthcare, which serves about 1.2 million customers in Ohio. “Our customers in non-grandfathered plans can keep their current coverage and will be subject to any additional applicable ACA requirements.”

Savings or higher rates

Moyer said he was offered different options to upgrade to a new policy with Reserve National: “They offered us some other options, but they were all more expensive than what we had.”

But when the newspaper helped him view different options available through the federal government’s online marketplace, HealthCare.gov, Moyer discovered he could find better coverage for $100 less than the $800 per month he’s paying for coverage.

However, like millions of Americans, Moyer is frustrated because ongoing technical issues prevented him from logging onto the website and shopping for plans.

Government officials have promised to fix the problems by the end of the month, and they say in many cases, Ohioans who have been forced to turn to the marketplace will find better coverage at lower prices.

Any non-elderly adult earning up to 400 percent of the federal poverty ‘” about $45,000 for an individual ‘” can use a tax subsidy to purchase health insurance through the marketplace.

The nonpartisan Congressional Budget Office says one in six of the approximately 48 million uninsured Americans — including nearly 1.5 million Ohioans ‘” will be able to find coverage for $100 or less per month in the marketplace, taking into account premium tax credits and Medicaid coverage, which was recently expanded in Ohio.

But for others ‘” including self-employed entrepreneurs and young, healthy people, whose premiums are now the lowest in the industry ‘” they’ll definitely end up paying more, said Kev Coleman, head of research at HealthPocket.com ‘” a free website that compares and ranks health insurance plans available to an individuals.

“If you had a pre-ACA plan, you’re going to get broader benefits under the new law,” Coleman said. “But adding services increases prices, and many people are going to be unhappy with their larger exposure to cost sharing.”

That includes Sandy Osman, 52, of Kettering, who said she’s “angry and frustrated by the whole mess.” After two weeks, she finally gave up trying to enroll in the marketplace through the main portal for enrollment in Ohio and 35 other states. But she was able to review her options in the marketplace by calling the marketplace helpline.

“I have insurance through my job, and they told us that they were dropping our coverage at the beginning of the year and to go to the marketplace,” Osman said. “They told me the cheapest policy I could buy would cost more than $200 a month. I pay about $140 a month for insurance now, and my budget is tight. I don’t know if I can afford an extra $60 or $70 a month.”

Osman’s combined income from the alimony she collects from a recent divorce and her job at Wendy’s fast-food restaurant in Beavercreek pushes her over the income threshold to qualify for a tax credit subsidy.

“It’s really unfair,” she said. “I’m perfectly happy with the insurance I have.”

Obama ‘Àúunambiguous’

In recent days, President Obama and the White House have attempted to qualify his assertion that people could keep their health plans. They have noted the main reason people are being forced to purchase new coverage is that they chose to change their policies after the law was enacted and were no longer in grandfathered plans.

Even before the law took effect, a substantial number of policyholders were forced to switch plans every year, according to White House Press Secretary Jay Carney, noting that the U.S. Department of Health and Human Services issued a press release to that effect the same year the health care law was signed.

But, critics say, no matter how administration officials interpret the law, what President Obama told the American public about the law was, at best, inconsistent with actual results.

“The statements that were made were unambiguous, and it’s clear that those statements were inaccurate,” said Greg Lawson, an analyst at The Buckeye Institute for Public Policy Solutions. “Anybody who gets one of those letters that says they’re about to lose coverage has a right to be pretty angry.”

HealthPocket’s Coleman said the problem with President Obama’s assurances is they assume universal standards can be applied to an industry as fragmented as health care.

Guaranteeing standardizing health insurance necessarily hurt those consumers currently paying the least for coverage, while benefiting those paying the most or who were previously denied coverage.

“The individual and family insurance market is enormously diverse, and when you make reforms that go across an entire population, you’re going to have winners and losers just because our health circumstances vary so much among one another,” Coleman said.

But in the long run, standardizing health insurance could benefit everyone by holding down medical cost inflation and putting downward pressure on health insurance prices.

“By reducing the differences among health plans, it forces you to compete on price because if you’re no longer competing on benefits that’s what you’re left to compete with,” Coleman said.

Contact this reporter at 937-225-2437 or email Randy.Tucker@coxinc.com.


Comments

1HappyBob(285 comments)posted 10 months, 2 weeks ago

Two observations on this article,

First, perhaps this doesn't apply to all whose policies are being cancelled in Jan 14, but shouldn't the insurance companies have warned policyholders that dropping their grandfather(able) policy would put them into a class where they may have to purchase items of coverage that they didn't want? Seems like the ethical thing to do.

Second, It sounds like the Moyer's were able to get a less expensive policy saving 1200/year with better coverage by purchasing on the exchange (with another insurer). Sounds like a win!

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2Sanjay1976(37 comments)posted 10 months, 2 weeks ago

Since Sandy Osman' income is over the threshold for subsidy, we can deduce that her income is over 45,000/year.

One would suppose with that income level they can find some wiggle room to pay an extra 60/month for healthcare insurance.

She is 52 years old, afterall, so she better have coverage. A policy at 200/month is a steal for a 52 year old!

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3Sanjay1976(37 comments)posted 10 months, 2 weeks ago

Since Sandy's income puts her beyond the threshold for subsidy, we can deduce that her income is greater than 46,000/year. One would think that with that level of income she could find some wiggle room to afford an extra 60/mo.

She is, after all, 52 years old. She'd better have health insurance.

A health insurance policy for a 52 year old for 200/month is a steal.

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476Ytown(1239 comments)posted 10 months, 2 weeks ago

HappyBob: Some people with individual policies had them before the law changed, but many purchased them as an alternative to COBRA which tends to be the most expensive option for coverage.

Sanjay: Would love to compare the benefits Sandy is getting for $200 mo compared to her employer subsidized plan at $140.

Those that need the coverage the most may elect the Bronze plan because they can't afford the monthly premium only to find out once then have a claim that the deductible and coinsurance will bankrupt them.

I'm still waiting to see the $2500 per year savings that was promised. So far, it seems to have gone the other way.

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5HappyBob(285 comments)posted 10 months, 2 weeks ago

76Ytown:
True enough, but the fact remains that the aca law provided for policy holders to keep "the plan they liked". If someone decided to change their plan after March 2010, they no longer could rely on that "keep the plan" provision.

While there may be a variety of reasons that a policyholder might drop his plan after March 2010, my point is that those who voluntarily changed from the "policy they liked"' should have been warned that there would be consequences.

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676Ytown(1239 comments)posted 10 months, 2 weeks ago

As we were told in 2010, 2011, 2012 and 2013, "If you like your current Health Plan, you can keep it" "period".

Didn't you know you were supposed to be smart enough to read between the lines?

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7Sanjay1976(37 comments)posted 10 months, 2 weeks ago

Yes that would be interesting (to see her coverage through her job). Just because she has coverage "through her job" we don't know if Wendy's absorbed some of her premium, or if Wendy's just provided an group umbrella under which she could purchase at group pricing, or if Wendy's is self insured with a insurer managing the coverage.

In any event, 140/mo for a 52 year old is way inexpensive, which suggests to me that her employer MAY have been covering some of her premium. If so, then she should be asking her employer to maintain her compensation by increasing her earnings by the amount of their previous contribution, and preferably with tax makeup.

For her area approx 200/mo would give her the very cheapest high deductable catastrophic plan.

I'm not sure what you are getting at with the notion that the Bronze plan is somehow inferior to a HDHC? Is that what you mean? I'm unclear about your paragraph that starts "those that need....

Not only would I like to see the 2500/year savings, can you point me to where that was promised?

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876Ytown(1239 comments)posted 10 months, 2 weeks ago

The Bronze plan is a HDHP. (High Deductible Health Plan)

People who do not understand their benefits may choose the Bronze plan based on premium cost which may or may not be subsidized. The Bronze plan has the highest deductible and the highest co-insurance. It pays 60%, you pay 40% after you meet your $5,000 deductible. The out of pocket maximum per year is $6,350 per person or $12,700 per family which in health care costs isn't hard to run up a $6,350 bill.

So if you get really sick, add $6350 to your premium costs of let's say $200 per month / $2400 year (low est) and you're looking at paying $8750 out of your pocket. Break that down to a monthly, and your looking at $729 per month for one person. Not that you would get sick, but just saying that it could happen.

$2500.00 savings...
http://www.youtube.com/watch?v=_o65vM...

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9Sanjay1976(37 comments)posted 10 months, 2 weeks ago

High-deductible health plans are a form of catastrophic coverage, and have a very specific defination for purposes of the IRS in qualifying HSAs

The deductable for the bronze plans is not set, various insurers have created a range from 2500 to 5500. Furthermore, the spectrum of plans offered, even within a metal catagory varies widely as a function of plan type (HMO/PPO/EPO/POS), copays and options.

Selection of "the best" plan for you or your family IMO hinges on (1) knowing how you are currently spending your medical care dollars, (2) deciding what level of risk you are willing to assume, (3) what limits are acceptable on choosing doctors - hospitals - , (4) accepable burden on your personal budget.

Until the ACA is fully implemented in 2015, insurers are free to set the out-of-pocket limits (Stop-Loss) where ever the market will withstand. Even so, the distinction of max out-of-pocket only applies to covered services.

Consequently, for example, chiropractic services may or may not apply to deductable, or OOP, depending on the policy (even within the same metal catagory).

I wont try to defend campaign promises, but my faith is that each of the candidates (Rep, Dem, Ind, or other) really believes that it in the possibility to deliver on those promises. Whether or not those are realistic, is entirely another matter. I could believe that many expected the 2500 "savings" to start on October 1 (which is equally unrealistic).

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10Sanjay1976(37 comments)posted 10 months, 2 weeks ago

Here's another source for comparative information:
http://www.healthpocket.com/

more detail:
http://www.valuepenguin.com/ppaca/exc...

and details of anthem offers:
https://shop.anthem.com/sales/eox/sho...

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1176Ytown(1239 comments)posted 10 months, 2 weeks ago

Sanj, I think we agree that there are many variables.

Also, traditionally, HDHPs, coupled with a HSA (health savings account) was a great way to go since the premiums dropped substantially and the difference could be put into an HSA. The focus was also in consumer driven health care making the insured more aware of the difference in cost from one provider to another. It allowed for your HSA to grow much like a 401k to be used in retirement years.

My comment related to bankruptcy also has to do with the fact that the high premiums plus high deductible and coinsurance don't allow much room for an additional amount to be put into an HSA safety net.

Put me into the category of "oh ye of little faith" when it comes to relying on our politicians delivering on promises and taking us into the direction of common sense.

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12Sanjay1976(37 comments)posted 10 months, 2 weeks ago

So expand my understanding of HSAs, specifically about the distribution rules. I thought that the funds could only be used for qualifying medical costs. Can they be used for other things?
What happens when the owner dies? Is it like a 401 in that it has a beneficiary (therefore avoiding probate)?

different topic,
I've talked with a few folks about their understanding of maximum out of pocket.
Generally they seem to think that if they incur a medical expense after they have already gotten to their max OOP, they pay nothing more.
In other words they are counting on their max OOP to be the most that they will spend on medical services during the year.

My understanding however is that if the service is not a covered service, they are responsible for the full cost, regardless if they have met their deductable or maxed out their OOP. Consequently, it is not only important to look at the deductable and the max oop, but also the items that are covered.

There is a subtle distinction between my "faith" and your "lack of faith"

While I tend to believe that they believe that they can deliver on promises, I also discount their ability to deliver. I prefer to believe that generally their intentions are good, but then reality hits.

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13Sanjay1976(37 comments)posted 10 months, 2 weeks ago

were those other links useful to you?

(healthpocket, a lot if missing detail on plans)

but the others were more informative

there was another, in the form of a speadsheet that compared details of plans (and premiums) on a county and age basis... I just can't find it again.

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1476Ytown(1239 comments)posted 10 months, 2 weeks ago

Sanj:

HSAs, MSAs, HRAs and FSAs have similarities. People are most familiar with FSAs (Flexible Spending Accounts). A major difference between these and HSAs is the FSAs "use it or loose it rule". The HSA allows you to rollover any money left in the account from year to year.

Another difference is that unlike the FSA, the money you contribute to the account if by payroll deduction is only available to the extent to the amount that you have in there. FSA's allow the money you pledge for the year to be available on Jan 1.

The amount you can fund to a Health FSA has $2500 limit in 2014.
HSA limits are $3300 single or $6550 family, plus if over age 50, an additional $1000 catch up contribution.

Distributions (withdrawals) must be for qualified expenses otherwise you incur a 20% penalty plus you are taxed. But, after age 65 or if disabled, you can withdraw the money for any reason without the penalty but you would be taxed since it was a pre-tax deduction.

HSAs are more like an IRA. You can assign a beneficiary so that the money in the account goes to your heirs if you die.

Here's a good link to answer questions about HSAs even though it is from the state of Illinois.

http://www.ilhealthagents.com/health-...

OOP applies to "eligible" expenses. So even if you reach your annual OOP and want to have cosmetic surgery, it's not covered. Also, your co-pays do not apply to the OOP and once you reach your OOP you still pay co-pays. And you need to be sure that your services are in network vs out of network. Higher OOPs apply to out of network.

"Faith"...in this case...confidence.

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