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Your plan has been cancelled, your rates have gone up, and people blindly blame Obama

Posted by on Nov. 7, 2013 at 8:24 AM
  • 29 Replies
1 mom liked this

Special Investigation: How Insurers Are Hiding Obamacare Benefits From Customers

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AP Photo

Across the country, insurance companies have sent misleading letters to consumers, trying to lock them into the companies' own, sometimes more expensive health insurance plans rather than let them shop for insurance and tax credits on the Obamacare marketplaces -- which could lead to people like Donna spending thousands more for insurance than the law intended. In some cases, mentions of the marketplace in those letters are relegated to a mere footnote, which can be easily overlooked.

The extreme lengths to which some insurance companies are going to hold on to existing customers at higher price, as the Affordable Care Act fundamentally re-orders the individual insurance market, has caught the attention of state insurance regulators.

The insurance companies argue that it's simply capitalism at work. But regulators don't see it that way. By warning customers that their health insurance plans are being canceled as a result of Obamacare and urging them to secure new insurance plans before the Obamacare launched on Oct. 1, these insurers put their customers at risk of enrolling in plans that were not as good or as affordable as what they could buy on the marketplaces.

TPM has confirmed two specific examples where companies contacted their customers prior to the marketplace's Oct. 1 opening and pushed them to renew their health coverage at a higher price than they would pay through the marketplace. State regulators identified the schemes, but they weren't necessarily able to stop them.

It's not yet clear how widespread this practice became in the months leading up to the marketplace's opening -- or how many Americans will end up paying more than they should be for health coverage. But misleading letters have been sent out in at least four states across the country, and one offending carrier, Humana, is a company with a national reach.

"If you're an insurance company, you're trying to hang onto the consumers you have at the highest price you can get them," Laura Etherton, a health policy analyst at the U.S. Public Interest Research Group, told TPM. "You can take advantage of the confusion about what people get to have now. It's a new world. It's disappointing that insurance companies are sending confusing letters to consumers to take advantage of that confusion. The reality is that this could do real harm."

_____

Before Obamacare, Donna paid a $724 monthly premium for $10,000 deductible, catastrophic health coverage from LifeWise, a subsidiary of the state's Blue Cross/Blue Shield affiliate. She asked that TPM withhold her last name because she was disclosing personal financial information.

The Sept. 16 letter from LifeWise told her that her existing plan was being canceled to comply with the new requirements of Obamacare and that she would automatically be rolled over into a new plan that was the "closest match" to her old plan. "If we don't hear from you, we'll automatically move you to this plan and you'll be covered starting January 1, 2014," the notice read.

Under the new LifeWise plan, Donna would have to pay more than $1,000 a month, a nearly $300 per month increase and a huge hit for a family with an income around $40,000. It was bare-bones coverage by ACA standards, with a $6,350 deductible.

The letter, which you can read here, made no mention of the insurance marketplace that was about to open, where she could shop around for other options. It did mention that she might qualify for financial help in the form of a tax credit but the onus was on Donna to call the insurer for more information.

Fast forward a month, and Donna was able to log onto Washington's marketplace and shop for insurance. And what did she find? Options. A LifeWise plan with the same deductible they offered her outside the exchange was a little cheaper. Plans with a lower deductible had the same or lower premiums as the LifeWise plan. What she ended up buying was a plan through Community Health Plan of Washington with a $250 deductible.

And crucially, she also discovered she would qualify for a federal tax subsidy that would knock her monthly premium to $80. Her daughter could enroll in Medicaid, at no cost to the family.

So here's the bottom line: If Donna had taken the default option that LifeWise offered outside of the marketplace, she would have paid nearly $1,000 more per month for a worse plan than she was able to obtain on the marketplace.

A LifeWise spokesman told TPM that the Washington marketplace had done plenty of its own advertising and the company assumes that customers know they have other options. He also noted that more information was available on the company's website.

"Our experience is that our customers are already aware that they have other options in the market and that we've never had to tell them in the past that we have competitors," Eric Earling, director of corporate communications at Premera Blue Cross/Blue Shield, said. "We knew that (the marketplace) would have a robust marketing campaign for themselves and knew they didn't need any additional help from us."

As a result of the letter LifeWise sent to Donna and other customers, state regulators in Washington issued a consumer alert on Sept. 19, warning residents about the misleading information. "Don't just take what your insurance company says, make sure you shop around. You have the right to buy any plan inside the new exchange or in the outside market," Insurance Commissioner Mike Kreidler said in the alert.

But the agency doesn't have the statutory authority to stop LifeWise from sending the misleading letters, a spokeswoman told TPM. The company controls one-third of the state's 300,000-person individual health insurance market -- leaving a lot of people at risk of being duped.

"Yes, that's possible," Stephanie Marquis, the spokeswoman, said when asked if some Washingtonians could be paying much more for insurance than they could if they went on the exchange because of LifeWise's actions.

"One of our concerns has been that people don't know they have these new rights," Marquis said. "The insurance companies can manipulate or withhold that information to increase their market share. It's just really disingenuous."

_____

Donna's experience isn't an isolated incident, however. And the wider spread the issue is, the likelier it becomes that some people have been manipulated into spending more for insurance than they should.

Kentucky fined Louisville-based Humana for sending out letters with similarly misleading information to customers in that state. They received complaints about an Aug. 21 letter that pressed customers to renew their policy now or risk increased rates under Obamacare.

But like LifeWise, Humana downplayed the fact that people could search the marketplace for other insurance options or that they might qualify for Obamacare's financial assistance, state insurance commissioner Sharon Clark, pictured, told TPM in an interview. A footnote referenced the "open enrollment period" that started Oct. 1. Humana directed customers to their website for more information about the marketplace, but offered no further explanation.

After receiving the letter, which you can read here, some customers were badgered through phone calls to make a decision, Clark said. Of the 6,500 people who received a letter, 2,200 actually responded and gave the company their answer before they had a chance to look at what the Kentucky marketplace had to offer.

But Clark's office soon stepped in. They fined Humana $65,000 for the "misleading" information, and the 2,200 respondents were released from their obligation to Humana and freed to shop for insurance through the Obamacare marketplace starting Oct. 1.

The most troubling part of the Humana case is that the company was pushing customers into a Humana insurance plan that was more expensive than the plan Humana was selling on the Obamacare marketplace, without the financial help available under Obamcare.

Clark gave the example of a single mother with children who was urged to sign up for a Humana plan with a monthly premium of $719.86. That price is higher than any comparable plan for sale on the state's insurance marketplace, Clark said -- not to mention that the mother might have qualified for tax subsidies to help pay for it if she went through the marketplace, as Donna did.

"People don't think about insurance every day," Clark said, "and in an environment with so many changes, this has been a period of confusion and uncertainty for people."

Colorado regulators also received complaints about a similar Humana letter, dated Aug. 28 on acopy obtained by TPM, that went out to 3,400 customers in their state.

It explained options available on the Obamacare marketplace and financial help in, again, a footnote. The company wasn't fined as it was in Kentucky, but state officials forced Humana to send out an apology and a corrected letter that met the state's standards.

"The letter appeared threatening," Vincent Plymell, a spokesman for the state insurance department, told TPM. "You've got to let people know their options. You can't make it seem like they have to stick with your company."

State officials in Missouri also told TPM that they have received complaints about misleading letters from Humana and were in the process of investigating them.

Asked by TPM about the Kentucky letter that resulted in a fine, Humana senior vice president for corporate communications Tom Noland offered the following statement via email, but declined to comment further.

"In retrospect, the letter could have been more consumer-friendly and we've rewritten it with that in mind. We are continuing to work closely with the Department of Insurance to ensure our messaging is clear and not adding confusion to consumers during this period of adjustment and transition."

Clark, the Kentucky insurance commissioner, told TPM that Humana executives had told state officials that there had been "a major disconnect" between the marketing and government compliance arms of the company.

"That was the excuse they gave us," she said. "That was the rationale."

"This is a great example of the kind of consumer abuses that are typical of the insurance industry, and they're supposed to stop under the ACA," Ethan Rome, executive director of Health Care For America Now, a pro-Obamacare advocacy group, told TPM. "In this case, they're trying to get in just one more abuse."

by on Nov. 7, 2013 at 8:24 AM
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Replies (1-10):
Billiejeens
by Ruby Member on Nov. 7, 2013 at 9:36 AM
3 moms liked this

Nonsensical Post

susan115
by on Nov. 7, 2013 at 9:41 AM
2 moms liked this

Let's use critical thinking skills...So, all insurance companies planned on cancelling on the same week or day?  Doesn't make sense.  Didn't all insurance companies recieve orders from this administration to get rid of high risk pools, small business insurance, and the self insured. I am not a fan of the insurance industry, but this pratice does not make sense for long term goals.

PrimmednPunked
by Silver Member on Nov. 7, 2013 at 10:27 AM

Way to ignore the real issue and still blame Obama :(  Not EVERYTHING is his fault lol.  Just like Bush isn't to blame for everything.  


I am not for the ACA.  I honestly think it has been instituted improperly and would have been best taken care of on a state by state basis.  However we shouldn't ignore how the insurance companies are abusing the system, as they always have.

rocketracer
by Gold Member on Nov. 7, 2013 at 11:24 AM
3 moms liked this
Govt is abusing their power....this is a power grab of 1/6 of the US economy which may eventually be funded by a nat'l sales (VAT) tax...what a better way to control people by taking more from them and dictating what they have to purchase....
PrimmednPunked
by Silver Member on Nov. 7, 2013 at 11:28 AM

Again this isn't to support the ACA.  I very much realize the issues.  But the big thing here is how the insurance companies are continuing to screw over Americans.

Quoting rocketracer:

Govt is abusing their power....this is a power grab of 1/6 of the US economy which may eventually be funded by a nat'l sales (VAT) tax...what a better way to control people by taking more from them and dictating what they have to purchase....


HaileysMom07180
by New Member on Nov. 7, 2013 at 11:31 AM
2 moms liked this

essentially what i have read and heard was that certain plans didnt fit in the ACA guidelines and thonse plans that didnt fit were told to change them to fit their guidelines.  for some companies, the changes were so drastic that it was easier just to cancel them completely and create new plans (the more expensive ones they are asking their customers to switch to)  I have a friend that works at Blue Cross callcenter and he said it has been hell for him at work since Oct. 1st and he has to psyche himself up in the partking lot just to go into work.


Quoting susan115:

Let's use critical thinking skills...So, all insurance companies planned on cancelling on the same week or day?  Doesn't make sense.  Didn't all insurance companies recieve orders from this administration to get rid of high risk pools, small business insurance, and the self insured. I am not a fan of the insurance industry, but this pratice does not make sense for long term goals.



rocketracer
by Gold Member on Nov. 7, 2013 at 11:59 AM
3 moms liked this

...as advanced by the gov't as a means to an end....the gov't has to come up with a scape goat as a means to single payer....(pick a target (Private Insurance), isolate it, demonize it = Alinski tactic) + (overwhelm the system (push people on to gov't assistance) = Cloward and Piven tactic) = The Lefts tactics being played out right in front of our  eyes.  


Quoting PrimmednPunked:

... how the insurance companies are continuing to screw over Americans.

Quoting rocketracer:

Govt is abusing their power....this is a power grab of 1/6 of the US economy which may eventually be funded by a nat'l sales (VAT) tax...what a better way to control people by taking more from them and dictating what they have to purchase....



 

rocketracer
by Gold Member on Nov. 7, 2013 at 12:01 PM
1 mom liked this

 The ACA law stated that if an insurance company raised their premium by as little as $5 the plan became null and void.  

Quoting HaileysMom07180:

essentially what i have read and heard was that certain plans didnt fit in the ACA guidelines and thonse plans that didnt fit were told to change them to fit their guidelines.  for some companies, the changes were so drastic that it was easier just to cancel them completely and create new plans (the more expensive ones they are asking their customers to switch to)  I have a friend that works at Blue Cross callcenter and he said it has been hell for him at work since Oct. 1st and he has to psyche himself up in the partking lot just to go into work.

 

Quoting susan115:

Let's use critical thinking skills...So, all insurance companies planned on cancelling on the same week or day?  Doesn't make sense.  Didn't all insurance companies recieve orders from this administration to get rid of high risk pools, small business insurance, and the self insured. I am not a fan of the insurance industry, but this pratice does not make sense for long term goals.

 

 

 

 

blondekosmic15
by Blonde on Nov. 7, 2013 at 1:48 PM
4 moms liked this

Barack Obama, Kathleen Sebelius, Valerie Jarrett, Ezekiel Emanuel & those responsible for the ACA are to blame....videos provided on link.


Obama Officials In 2010: 93 Million Americans Will Be Unable To Keep Their Health Plans Under Obamacare

Obama administration knew that Obamacare would disrupt private plans

continued....

Mid-range estimate: 51% of employer-sponsored plans will get canceled

continued....

Will these canceled plans be replaced with better coverage?


President Obama’s famous promise that “you could keep your plan” was not some naïve error or accident. He, and his allies, knew that previous Democratic attempts at health reform had failed because Americans were happy with the coverage they had, and opposed efforts to change the existing system.

Now, supporters of the law are offering a different argument. “We didn’t really mean it when we said you could keep your plan,” they say, “but it doesn’t matter, because the coverage you’re going to get under Obamacare will be better than the coverage you had before.”

But that’s not true. Obamacare forces insurers to offer services that most Americans don’t need, don’t want, and won’t use, for a higher price. Bob Laszewski, in a revealing blog post, wrote about the cancellation of his own health coverage. “Right now,” he wrote, “I have ‘Cadillac’ health insurance. I can access every provider in the national Blue Cross network—about every doc and hospital in America—without a referral and without higher deductibles and co-pays.”

But his plan is being canceled. His new, Obamacare-compatible plan has a $500 higher deductible, and a narrower physician and hospital network that restricts out-of-town providers. And yet it costs 66 percent more than his current plan. “Mr. President,” he writes, “I really like my health plan and I would like to keep it. Can you help me out here?”

Congress proposes a straightforward solution

Senator Ron Johnson (R., Wisc.) and Rep. Fred Upton (R., Mich.) have proposed the “If You Like Your Health Care Plan You Can Keep It Act,” with dozens of co-sponsors. The two-page bill simply states that “nothing in [the Affordable Care Act] shall be construed to require that an individual terminate coverage under a group health plan or health insurance coverage in which such individual was enrolled during any part of the period beginning on the date of enactment of this Act and ending on December 31, 2013.”

Some Senate Democrats are jumping on the grandfathering bandwagon. Mary Landrieu (D., La.), locked in a competitive reelection race against Rep. Bill Cassidy (R., La.), now claims that she was unaware that Obamacare would disrupt existing insurance arrangements. “It was our understanding when we voted for that bill that people when they have insurance could keep with what they had. So I’m going to be working on that fix,” she said on Wednesday.

But that’s not accurate. It was well known, as far back as 2009, that millions of Americans would lose their existing coverage under the Obamacare bill. Landrieu still voted for it. In September of 2010, Sen. Mike Enzi (R., Wyo.)introduced legislation that would protect small businesses from losing their health plans’ grandfathered status under Obamacare. Landrieu voted against the bill, on a party-line vote.

But Landrieu’s flip-flop illustrates the potency of this issue. If Americans were truly being forced off of their existing insurance plans—that they like—and into better and more affordable ones, the outcry would be minimal. But that isn’t what’s happening. People are being forced into inferior and costlier plans. And they’re making their displeasure felt in Washington.

http://www.forbes.com/sites/theapothecary/2013/10/31/obama-officials-in-2010-93-million-americans-will-be-unable-to-keep-their-health-plans-under-obamacare/

49-State Analysis: Obamacare To Increase Individual-Market Premiums By Average Of 41%

http://www.forbes.com/sites/theapothecary/2013/11/04/49-state-analysis-obamacare-to-increase-individual-market-premiums-by-avg-of-41-subsidies-flow-to-elderly/


PRESIDENT ADDS OBAMACARE DISCLAIMER, BLAMES INSURANCE PROVIDERS FOR CANCELLATIONS


DSamuels
by Gold Member on Nov. 7, 2013 at 2:14 PM

Of course it's not Obama or the dems fault, it's our fault for listening to them and being stupid enough to believe they were telling the truth and voted them back into office.

After all, they think we are too stupid to know what's best for us so the have to pass laws to force us to do it. There are lot of people that keep proving them right.

Well, some of us didn't believe them, I guess it's not our fault.

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