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Health policy cancellations prove a new blow for officials



Published: Wed, October 30, 2013 @ 12:00 a.m.

Associated Press

WASHINGTON

Move over, website woes. Lawmakers confronted the Obama administration Tuesday with a difficult new health care problem — a wave of cancellation notices hitting small businesses and individuals who buy their own insurance.

At the same time, the federal official closest to the website apologized for its dysfunction in new sign-ups and asserted things are getting better by the day.

Medicare chief Marilyn Tavenner said it’s not the administration but insurers who are responsible for cancellation letters now reaching many of the estimated 14 million people who buy individual policies. And, officials said, people who get cancellation notices will be able to find better replacement plans, in some cases for less.

The Associated Press, citing the National Association of Insurance Commissioners, reported in May that many carriers would opt to cancel policies this fall and issue new ones. Administratively that was seen as easier than changing existing plans to comply with the new law, which mandates coverage of more services and provides better financial protection against catastrophic illnesses.

While the administration had ample warning of the cancellations, they could become another public relations debacle for President Barack Obama’s signature legislation. This problem goes to the credibility of one of the president’s earliest promises about the health care overhaul: You can keep your plan if you like it.

In the spring, state insurance commissioners started giving insurers the option of canceling existing individual plans for 2014, since the coverage required under Obama’s law is more robust. Some states directed insurers to issue cancellations. Large employer plans that cover most workers and their families are unlikely to be affected.

The cancellation notices are now reaching policyholders, and they’ve been complaining to their lawmakers — who were grilling Tavenner on Tuesday.

“Based on what little information the administration has disclosed, it turns out that more people have received cancellation notices for their health care plans this month than have enrolled in the [health care website],” said Ways and Means Chairman Dave Camp, R-Mich. He cited a news report of 146,000 cancellations in his state alone.

Up and down the dais, lawmakers chimed in with stories of constituents who had received similar notices. Republicans offered examples of people being asked to pay more.

Democrats countered by citing constituents who had been able to find lower-cost coverage than they have now. Ranking Democrat Sander Levin of Michigan said one of his constituents has been paying $800 a month for a BlueCrossBlueShield plan and managed to find comparable coverage for $77, after tax credits that lower the premiums.

It could take months to sort out the balance of individual winners and losers. There’s not a central source of statistics on how many people have gotten cancellations. Even the number of people who buy insurance individually is disputed.


Comments

1SeriouslyNow(192 comments)posted 10 months ago

The simple reason that insurers are not renewing policies for 2014 is because they don't meet the minimum standards for health care policies embodied in ACA.

You can argue that the government has no business setting standards. Can you also argue that the government should not set standards for cars or airplanes, of for children's clothing, buildings, for bridges, for banking, for voting, for weights and measures..... etc.

People who purchased these health care policies were duped into thinking that they were getting a good quailty health care policy.

Some will say that they knew that they were paying for a sub-standard policy and that they were OK with that, but I really suspect that many people didn't realize the limits of coverage, and how they might be exposed to financial ruin.

Whether it was by ignorance or will, people with sub-standrad policies have been getting by on the cheap. They just want to stay on the cheap.

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276Ytown(1232 comments)posted 10 months ago

The existing individual plans did not include the minimum standards simply because they are not additional services that the customer needed. They were available at additional cost much like auto insurance where you can purchase towing or rental coverage.

The ACA required minimum standards are::
1. Ambulatory patient services
2. Emergency services
3. Hospitalization
4. Maternity and newborn care
5. Mental health and substance use disorder services, including behavioral health treatment
6. Prescription drugs
7. Rehabilitative and habilitative services and devices
8. Laboratory services
9. Preventive and wellness services and chronic disease management
10. Pediatric services, including oral and vision care

Of the 10, only the following were generally not included in an individual plan:
1. Maternity & newborn
2. Mental health & substance abuse
3. Pediatric dental & vision

http://www.healthedeals.com/articles/...

The statement "People who purchased these health care policies were duped into thinking that they were getting a good quailty health care policy." is simply not true.

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3SeriouslyNow(192 comments)posted 10 months ago

I will grant that 76Ytown investigated in great detail every possible circumstance that he might count on his now substandard health care policy. He decided to take a calculated risk.

I will also suggest that 76Ytown is not the normal insurance purchaser. Most are completely satisfied with buying the cheapest product possible and then praying that they don't need those things that are not covered.

What he should tell us is what coverage he decided to forgo for his family.

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476Ytown(1232 comments)posted 10 months ago

SeriouslyNow,
Substandard as now defined by Obamacare is one that does not meet all of the above 10 minimums. As you can see there are provisions which are not applicable to all yet we are being forced to pay for a one size fits all. Get your facts straight. Individual policies can include additional benefits such as maternity or mental health if you wish to add on just a your auto insurance is customizable.

If your auto insurance policy renewal now required minimum standards to include dog walking, house cleaning, towing, road hazard and rental along with $1 million dollar maximums you would see an increase in premiums but would not consider your previous coverage to be substandard.

I listened to Obama's speech today where he used the same "substandard" language. Once again playing the blame game for millions of Americans loosing their insurance coverage. This time it's the insurance companies fault, not the fact that he changed the rules that you can't keep your plan.

Your comments above are a slap in the face of hard working honest middle income wage earners, small business owners and individuals who purchase individual insurance policies to protect their families instead of relying on the government to bail them out. The fact of the matter is that people who are independent, self supporting, responsible tax payers are now seeing that they are being forced to purchase plans that they do not want.

By raising the poverty level to 400% the government is hoping that people will be happy to give up their independence to get a government hand out. The insurance company lobbyists are laughing all the way to the bank as their companies raise premiums and out of pocket dollars only to be "insured" by the government.

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5SeriouslyNow(192 comments)posted 9 months, 4 weeks ago

I'm certain that a percentage of the American population would be just fine with cars without seatbelts, airplanes made with inferior steel bolts, poultry that is not inspected, banks without regulation, speed limits, schools without standards for performance or attendance, milk that is not pasteurized, lawyers without licenses, doctors without licenses, pharmaceuticals without FDA approval,.....I can go on and on, but hopefully you get the point.

My point is that most Americans take for granted that the products and services that they buy are up to some level of standards. Does the ACA raise that bar, it certainly does. Can you elect not to purchase insurance, you cetainly can.

Your choices are still there, you just don't like the choices.

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676Ytown(1232 comments)posted 9 months, 4 weeks ago

Seriously, I do not agree with you on this "substandard" claim. The list, put together by the ACA includes what used to be standard plus what was previously considered optional. You cannot change the rules as they have and suddenly deside that the previous benefits were not appropriate. I would agree if they required improvement to what was offered because they were lacking or as in your examples for safety reasons, but the new requirements are only to add benefits that are not necessarily needed and were available to the market if wanted... at additional cost. Tricky word (substandard) to get you to think that they are saving you from harm.

So you would agree that if we set new standards for auto insurance to include dog walking, house cleaning , rentals and towing for all because some people need that coverage? Of course you we'll all have to pay higher premiums.

I'm getting tired of these word plays.

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7SeriouslyNow(192 comments)posted 9 months, 4 weeks ago

If your previous policy explicitly stated what it did NOT cover, then I could find some room to agree. For example, if your previous policy explicitly stated that it excluded coverage for a pre-existing illness (and whatever they define as pre-existing conditions) then I could find validity to the claim.

Do you consider banking standards safety? Do you consider zoning standards safety?

Like it or not that is the nature of governance, setting rules, regulations, establishing standards of behavior. That is what a civil society does.

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876Ytown(1232 comments)posted 9 months, 4 weeks ago

seriouslynow: Yes, individual policies will state what they exclude ie: maternity or substance abuse. Laws such as ERISA, HIPAA, standard and basic plan regulation and prohibiting cancellation if you get sick are already in place.

If you purchase a policy that covers your individual needs, unless they deny something not covered by the policy provisions and exclusions you should not be surprised. What surprises are individuals going to have when they choose the Bronze plan that pays only 60% of the covered expenses over the more expensive plans.

You are acting as though these standards do not already exist.

"substandard plans" word play!

I'd like to challenge you on what exactly you think was not being provided by individual plans that would be considered substandard. Important to note that unless plans have all 10 of the minimum requirements they are now being called substandard.

Here are some facts to consider:

Per HHS a number of Essential Health Benefit categories, including ambulatory care, emergency care and hospitalization services, are currently covered by ALL or nearly ALL existing health plans.

However, maternity and newborn care was covered by 34% of plans, pediatric dental and vision care, 24%, mental health services 61% and substance use disorder services 54%.

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9SeriouslyNow(192 comments)posted 9 months, 4 weeks ago

The policy for your family of 3 last year is not going to be renewed. It is being replaced with a new policy.

Have you asked your insurer if the are no longer selling your prior policy because it did not meet the ACA standards, or was it a business decision (eg low profitability) that they no longer offer that policy?

If the prior policy did not meet the ACA standards, what was explicitly excluded in your prior policy that your insurer will now cover (at double the premium).

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1076Ytown(1232 comments)posted 9 months, 4 weeks ago

seriously,

What was not covered? Maternity and newborn care, pediatric dental and vision, substance abuse. Of those, none are applicable to my family.

I'm still waiting for you to answer my challenge.

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11SeriouslyNow(192 comments)posted 9 months, 4 weeks ago

Regarding your challenge: What I think should or should not be included in a standard policy is immaterial. I wasn't consulted, nor do I have any strident opinions on what exactly a standard policy should cover.

Generally speaking, I think that whatever coverage is provided it should protect the owners from financial ruin caused by encurring unexpected medical expenses.

Actually you are in a much better position to determine the differences between an older (so-called "substandard") policy and a newer compliant policy.

And you have provided that differentiation. If I understand what you've said the only coverage difference is maternity/newborn, ped dental/vision, and sunstance abuse. What I'm failing to understand is why your premium, for these "extra" services, has increased from 508/mo to 1100/mo for a family of 3.

The main reason that I find that incredible is that my 2014 family policy for 80/20 with deductible of 600 and stop loss at 5000 is less than 600/mo.

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1276Ytown(1232 comments)posted 9 months, 4 weeks ago

Insurance companies determine price actuarially. If you have a group policy with a mix of young and old, male and female the risk is spread out and the cost comes down. For an individual policy, the risk "is what it is". The additional coverage must assume that we have a need so they've come up with a cost of well...double.

From the back of the letter from Aetna:

"We estimate 94% of the average 2014 ACA plan rate increase relative to the average 2013 plan rate is due to healthcare reform. Each member's actual percent increase may vary from this average depending upon the current plan you are enrolled in, the plan you choose in 2014, whether tobacco rates will apply in 2014, where you reside, your age and gender, and whether or not the rate you currently pay was increased due to an underwriting review. For families enrolling more than 3 dependent children under age 21, the impact of healthcare reform will likely be less than average. These increases are due to the Federal Patient Protection and Affordable Care Act and not the enactment of any laws or regulations of the Governor, or Department of Insurance."

I still object to the term "substandard" since the only change is to add benefits that were considered extras in the past as mandated by the ACA. The core benefits remain the same.

Who knows? Maybe insurance companies have found a way to easily double their profits if folks are eligible for govt. subsidies that offset their cost. Ins companies were in fact the authors of the ACA. We'll just have to sign up to find what else is in it.

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13SeriouslyNow(192 comments)posted 9 months, 4 weeks ago

I can accept your objection to the word substandard because of the implications associated with it. Viewed in retrospect, it implies that you specifically choose a policy that exposes your family to risk. I'm fairly certain that was not your intention or motivation.

I appreciate your taking the time to relate the 'back of the letter' notification from Aetna, but it doesn't say anything specific about the difference in policy coverage that justifies a doubling of your rate. It seems to just say..."blame it on ACA"

As I said above, I don't comprehend how the extra services (that you identify as being the only coverage difference) translate to an increase of over 500/mo.

Regarding the insurers doubling their profits... It’s my understanding that insurers are required to payout (in actual medical benefits) at least 80% of the premiums that are collected. Hopefully that is an overall standard, so that insurers are not able to play one class (group policies) against another (individual policies).

Lastly, I'm intrigued by your last comment about the Insurance companies being the authors of ACA. I think you have previously opined that the ACA was designed to fail. That "designed to fail" is the current talking point of those who think that failure of ACA is intended to lead to a single payer system.

It doesn't make sense that the insurance companies would author a plan that is intended to lead to a single payer system, like Medicare for all.

(Unless of course that they believe that the single payer would be privatized to the insurance companies themselves --- I can't believe that they want to get into the business of insuring the elderly!)

Have you shopped the exchange yet? How does Aetna's 2014 offer compare with what's available on the exchange?

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