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Health policy cancellations prove a new blow for officials

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

Associated Press


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.


1redeye1(5663 comments)posted 2 years, 8 months ago

SN You are nothing more then a kool aid drinking liberturd who believes everything the LIAR boy in the White House tells you.. He is suppose to have known this for months but still lie to the general public. If you would have taken the time to read said bill you too would realize that all of the general tax paying public is going to suffer over this lying boy grand gesture. By paying HIGHER taxes so that the poor can be subsidize for their expenses .So how is that fair? In the coming months all pay checks will be shrinking considerably. Let's see what you think then!

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276Ytown(1364 comments)posted 2 years, 8 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


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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376Ytown(1364 comments)posted 2 years, 8 months ago

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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476Ytown(1364 comments)posted 2 years, 8 months 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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576Ytown(1364 comments)posted 2 years, 8 months 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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676Ytown(1364 comments)posted 2 years, 8 months ago


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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776Ytown(1364 comments)posted 2 years, 8 months 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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