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News & Politics News & Politics

Thousands Of Consumers Get Insurance Cancellation Notices Due To Health Law Changes

Posted by on Oct. 21, 2013 at 8:24 PM
  • 31 Replies
1 mom liked this

OCT 21, 2013

Health plans are sending hundreds of thousands of cancellation letters to people who buy their own coverage, frustrating some consumers who want to keep what they have and forcing others to buy more costly policies.

The main reason insurers offer is that the policies fall short of what the Affordable Care Act requires starting Jan. 1. Most are ending policies sold after the law passed in March 2010.  At least a few are cancelling plans sold to people with pre-existing medical conditions.

By all accounts, the new policies will offer consumers better coverage, in some cases, for comparable cost -- especially after the inclusion of federal subsidies for those who qualify. The law requires policies sold in the individual market to cover 10 “essential” benefits, such as prescription drugs, mental health treatment and maternity care. In addition, insurers cannot reject people with medical problems or charge them higher prices. The policies must also cap consumers’ annual expenses at levels lower than many plans sold before the new rules.

But the cancellation notices, which began arriving in August, have shocked many consumers in light of President Barack Obama’s promise that people could keep their plans if they liked them. 

“I don’t feel like I need to change, but I have to,” said Jeff Learned, a television editor in Los Angeles, who must find a new plan for his teenage daughter, who has a health condition that has required multiple surgeries.

An estimated 14 million people purchase their own coverage because they don’t get it through their jobs. Calls to insurers in several states showed that many have sent notices.

Florida Blue, for example, is terminating about 300,000 policies, about 80 percent of its individual policies in the state. Kaiser Permanente in California has sent notices to 160,000 people – about half of its individual business in the state.  Insurer Highmark in Pittsburgh is dropping about 20 percent of its individual market customers, while Independence Blue Cross, the major insurer in Philadelphia, is dropping about 45 percent.

Some Policies Targeted

Both Independence and Highmark are cancelling so-called “guaranteed issue” policies, which had been sold to customers who had pre-existing medical conditions when they signed up. Policyholders with regular policies because they did not have health problems will be given an option to extend their coverage through next year.

Consumer advocates say such cancellations raise concerns that companies may be targeting their most costly enrollees.

They may be “doing this as an opportunity to push their populations into the exchange and purge their systems” of policyholders they no longer want, said Jerry Flanagan, an attorney with the advocacy group Consumer Watchdog in California.

Insurers deny that, saying they are encouraging existing customers to re-enroll in their new plans.

“We continue to cover people with all types of health conditions,” said Highmark spokeswoman Kristin Ash.

She said some policyholders who may have faced limited coverage for their medical conditions will get new plans with “richer benefits” and the policies “in most cases, will be at a lower rate.”

Paula Sunshine, vice president of marketing with Independence, said the insurer hopes the cancelled policyholders will “choose Blue when they decide on a new plan.”

Higher Costs?

Some receiving cancellations say it looks like their costs will go up, despite studies projecting that about half of all enrollees will get income-based subsidies.

Kris Malean, 56, lives outside Seattle, and has a health policy that costs $390 a month with a $2,500 deductible and a $10,000 in potential out-of-pocket costs for such things as doctor visits, drug costs or hospital care.

As a replacement, Regence BlueShield is offering her a plan for $79 more a month with a deductible twice as large as what she pays now, but which limits her potential out-of-pocket costs to $6,250 a year, including the deductible.

“My impression was …there would be a lot more choice, driving some of the rates down,” said Malean, who does not believe she is eligible for a subsidy.

Regence spokeswoman Rachelle Cunningham said the new plans offer consumers broader benefits, which “in many cases translate into higher costs.”

“The arithmetic is inescapable,” said Patrick Johnston, chief executive officer of the California Association of Health Plans. Costs must be spread, so while some consumers will see their premiums drop, others will pay more -- “no matter what people in Washington say.”

Health insurance experts say new prices will vary and much depends on where a person lives, their age and the type of policy they decide to buy.  Some, including young people and those with skimpy or high-deductible plans, may see an increase. Others, including those with health problems or who buy coverage with higher deductibles than they have now, may see lower premiums.

Blue Shield of California sent roughly 119,000 cancellation notices out in mid-September, about 60 percent of its individual business.  About two-thirds of those policyholders will see rate increases in their new policies, said spokesman Steve Shivinsky.

Like other insurers, the Blue Shield letters let customers know they have to make a decision by Dec. 31 or they will automatically be enrolled in a recommended plan.

“There is going to be a certain amount of churn in the marketplace as people have to make their decisions,” Shivinsky said.

Jay Hancock contributed.

We want to hear from you: Contact Kaiser Health News
by on Oct. 21, 2013 at 8:24 PM
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Replies (1-10):
Ednarooni160
by Eds on Oct. 21, 2013 at 9:28 PM
1 mom liked this

Well if you're an insurance company and you can kick off people and get higher deductibles and charge more..WHY NOT?  It's all about money and making the customer/client pay more than what the insurance company would pay out.  I'm telling ya..Obama care is like the LOTTO ticket for insurance companies..they just KEEP winning with this one. They made money "before" it was implemented by raising premiums..during, and they will after.. Obama said you could keep your doctor and your insurance..what he didn't say was that doctors can opt out and insurance companies can "change' it up.   Well, I HOPE the insurance companies at least sent Obama a BIG  thank you card..

grandmab125
by Platinum Member on Oct. 21, 2013 at 9:32 PM
3 moms liked this

Won't it be a kick in the teeth if the ignorant masses who voted Obama into office to get their freebies, then were stupid enough to vote for him again, get their just deserts and have their policies dropped too?

Billiejeens
by Ruby Member on Oct. 22, 2013 at 10:26 AM
3 moms liked this

 

I think that you really over estimate the bots and the zombies.

They are not going to be able to understand the letter when it comes, if they get hurt or sick they will simply still go to the emergency room.

Quoting grandmab125:

Won't it be a kick in the teeth if the ignorant masses who voted Obama into office to get their freebies, then were stupid enough to vote for him again, get their just deserts and have their policies dropped too?


 

MomTiara19
by Silver Member on Oct. 22, 2013 at 10:53 AM

I still have my same health insurance.I did not recieve a cancellation letter and I have Blue Cross Blue Shield.

grandmab125
by Platinum Member on Oct. 22, 2013 at 1:02 PM
2 moms liked this

 So, does your hubby work for the gov't, or is he a union member?  That would explain a  lot.  Also, you may not lose your insurance, but have you rec'd your new bill for 1/14 yet?  Or do you live in one of the states that was already so highly regulated that there won't be much of a difference between your current one and the ones on the market place?  Fess up.

Enough with the stupid memes.

Gee, just think, could it be that TX at 1.5M illegal residents is the second highest in the country?  Then there is the little fact that actually CA has more uninsured people than Texas based on their populations.  It is the 'percentage' of the total population that puts them at the top.....not the highest number of uninsured.

Do try and do a little research before you post again, instead of cherry picking incorrect dumb memes...

Quoting MomTiara19:

I still have my same health insurance.I did not recieve a cancellation letter and I have Blue Cross Blue Shield.

 

Pema_Jampa
by 2HotTacoTini on Oct. 22, 2013 at 1:06 PM

We still have the same also. No rise in costs for now. We shall see if that changes. 

Quoting MomTiara19:

I still have my same health insurance.I did not recieve a cancellation letter and I have Blue Cross Blue Shield.


Schauseil
by Bronze Member on Oct. 22, 2013 at 1:07 PM
*sigh* this is what happens when you don't have a single payer system and instead have a bunch of companies that have to be prepared for anything.
Pema_Jampa
by 2HotTacoTini on Oct. 22, 2013 at 1:07 PM

You mean like most of the poor people currently do? 

Quoting Billiejeens:


I think that you really over estimate the bots and the zombies.

They are not going to be able to understand the letter when it comes, if they get hurt or sick they will simply still go to the emergency room.

Quoting grandmab125:

Won't it be a kick in the teeth if the ignorant masses who voted Obama into office to get their freebies, then were stupid enough to vote for him again, get their just deserts and have their policies dropped too?




Billiejeens
by Ruby Member on Oct. 22, 2013 at 1:34 PM
Quoting Pema_Jampa:

You mean like most of the poor people currently do? 

Quoting Billiejeens:


I think that you really over estimate the bots and the zombies.


They are not going to be able to understand the letter when it comes, if they get hurt or sick they will simply still go to the emergency room.


Quoting grandmab125:

Won't it be a kick in the teeth if the ignorant masses who voted Obama into office to get their freebies, then were stupid enough to vote for him again, get their just deserts and have their policies dropped too?








Poor, lazy, bad planners, selfish people...... yeah
Pema_Jampa
by 2HotTacoTini on Oct. 22, 2013 at 1:35 PM

You cannot paint all people with one brush. please stop doing it and calling people names.

Quoting Billiejeens:

Quoting Pema_Jampa:

You mean like most of the poor people currently do? 

Quoting Billiejeens:



I think that you really over estimate the bots and the zombies.


They are not going to be able to understand the letter when it comes, if they get hurt or sick they will simply still go to the emergency room.


Quoting grandmab125:

Won't it be a kick in the teeth if the ignorant masses who voted Obama into office to get their freebies, then were stupid enough to vote for him again, get their just deserts and have their policies dropped too?










Poor, lazy, bad planners, selfish people...... yeah


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