It's OK some health plans got cancelled

It's called health care reform for a reason, folks:  

Senator Mary Landrieu's "Keeping the Affordable Care Act Promise Act" would require insurance companies to keep offering people the plans they have right now as long as they keep paying their premiums. It's the kind of poll-tested idea that's good politics, and horrible, horrible policy. That's because it's a good thing if some people lose their plans. That's how reform should work, the White House's false promises and hopelessly bungled roll-out, notwithstanding.

The individual insurance market doesn't work. You can't get insurance if you are sick, and don't get much insurance if you become sick. In other words, insurers won't sell policies to people with preexisting conditions, and sell insufficient policies to healthy people. As Jonathan Cohn explains, these insufficient policies often don't cover things like prescription drugs and won't cover high out-of-pocket expenses. And if your plan wasn't insufficient, insurance companies would look for excuses to cancel it after-the-fact if you did become seriously ill—what's known as "rescission."

Obamacare tries to fix these problems with the individual market—and the inescapable logic of that is some people will end up paying more than before. Here's why in three steps. First, Obamacare makes insurers offer everyone the same policies at the same prices regardless of preexisting conditions (though not age). But bare bones coverage with high out-of-pockets, and even lifetime limits, isn't much use if you're sick. So, second, it sets minimum benefit levels. But what about healthy people who already have individual policies that don't meet these levels? Well, if they had those plans before Obamacare was passed in March 2010, and those plans haven't changed at all since, they can keep them. Otherwise, they can't. [That's an oversimplification of the ACA's grandfathering rules -- J.] They have to buy conforming plans that are almost certainly more expensive. Because, third, Obamacare needs healthy people paying for more than just catastrophic (and even junk) insurance to help pay for all the sick people now getting coverage. In other words, Obamacare needs health insurance to be...insurance.

Bill Clinton Is Wrong: It's Okay That Some People Can't Keep Their Insurance

By Matthew O'Brien

November 14, 2013 | Atlantic

URL: http://www.theatlantic.com/business/archive/2013/11/bill-clinton-is-wrong-its-okay-that-some-people-cant-keep-their-insurance/281455/

Media myths of Obamacare's 'failure'

I've been seeing different figures for the private insurance market, and those "losing" their private insurance because of Obamacare. Yesterday I quoted the figure of 19 million Americans who have individual, private health plans. Here Michael Hiltzik sets us straight [emphasis mine]:

[T]he market for individual policies is about 30 million people. Of those, more than 20 million are uninsured.For virtually all of them, Obamacare is an unalloyed blessing. The Congressional Budget Office estimates that about 81% of all individual policy-holders will be eligible for income-based insurance subsidies. The uninsured population skews poorer than the total individual market, so an even higher proportion of them are likely to be subsidized. The Affordable Care Act also forbids insurers to base the cost and availability of insurance on pre-existing conditions, which has kept millions of people out of the individual market.

What about individual policy-holders? They number somewhere between 8.5 million and 9.5 million. The vast majority of these customers - two-thirds - spend less than a year in the individual market, according to a 2004 study published in Health Affairs. The study found that most people use individual insurance to bridge between periods of coverage from employers or public programs like Medicaid. If three-quarters of the individual customers will be eligible for insurance subsidies, that leaves 2.1 million to 2.4 million Americans paying the full freight.

The last piece of the puzzle, and the murkiest, is how many of this last group will be paying higher prices for lesser coverage - the emblematic Obamacare "victims." Even if it's all of them, at most they account for less than 1% of the country.

But plainly they're not all paying more for less. We know this because the individual market is where people have been getting ripped off by overpaying for inadequate coverage - "junk" insurance in many cases. It's where premiums are driven up and coverage constrained by pre-existing conditions. Those practices are eradicated by the Affordable Care Act.

Kevin Drum of Mother Jones posits that one-third of these customers may be charged more for less, which sounds reasonable, if perhaps a little high. I've heard from dozens of readers who claim to be in that group. But my experience, which I'd guess is matched by most of my journalistic colleagues, is that most of them aren't examining their options very well. They're not calculating their costs beyond their premiums - the free services mandated by Obamacare they're not getting today, for instance. They're not factoring in the rate increases on their existing plans they've been hit with in the past, and would face again, but will be limited under Obamacare.

As I said before, what's fueling a lot of this public disappointment with Obamacare is the 149 million Americans who aren't affected by it all, who don't need the exchanges right now, yet who pass judgment on it based on ignorant or biased media reports. Also, as Hiltzik notes above, a majority of the folks in the individual market only use private insurance as a "bridge;" so they rarely keep their plans very long. And most private health plans are offered with terms of only one year anyway, then prices and conditions always change.

Hiltzik describes the group who is indeed being affected, sometimes for the worst: those whose private insurers chose not to renew their old plans with the same prices and conditions to comply with the ACA grandfathering rules, i.e. those infamous "cancelled" plans:

The bottom line is that we're down to about one-quarter of one-percent of the country being paraded around to set the agenda for everyone else - fewer than 2 million people. Compare that with the number of people who are being denied health insurance in 21 states that have refused to expand Medicaid, as the Affordable Care Act allows them to do largely at federal expense. (Four other states are still thinking it over.)

This group numbers about 5 million, and in every case they're being deprived of health coverage by Republican governors or legislatures, or both. That should tell you that the Republicans who are carrying on about Obamacare's "failure" really don't have your welfare in mind, any more than the characters hawking diet plans on late-night TV really want you to get thin.

Regardless of the political fallout, 2014 midterm elections, or Obama's popularity, Hiltzik's conclusion is spot-on:

The fact is that Obamacare is here to stay. Its customer protections are worth real money to tens of millions of consumers, and it's vastly expanding the insurance market. The politicians claiming that they're only out to "fix" a broken program are playing you for suckers, and not for the first time.

The myths of Obamacare's 'failure'

By Michael Hiltzik

November 19, 2013 | Los Angeles Times

URL: http://articles.latimes.com/2013/nov/18/business/la-fi-mh-obamacares-failure-20131118

Six Things the Media Doesn't Understand About Obamacare

By Jonathan Cohn

November 18, 2013 | New Republic

URL: http://www.newrepublic.com/article/115625/obamacare-policy-cancellations-media-mythology-republican-spin

Obamacare Hyperventilation to Continue Forever!

By Jonathan Chait

November 18, 2013 | New York Magazine

URL: http://nymag.com/daily/intelligencer/2013/11/obamacare-hyperventilation-to-continue-forever.html

Obama lied, my health plan died?

(Actual headline from an hysterical Michelle Malkin op-ed).

I exposed this lie recently, but here's a much better explanation. All of you accusing President Obama of "lying" should read this.

It is much more the other way around: insurers are lying about Obama "forcing" them to "cancel" private health insurance plans for individuals.

It's very easy for insurers and their enablers in the media to get away with this lie, because as Semro notes, 149 million Americans have health insurance through their employer. They have never had to purchase individual insurance like 19 million other Americans. Most Americans don't know that these plans typically last one year, then they must be renewed -- or "cancelled" in current parlance -- with higher premiums, deductibles, lower coverage -- whatever the insurer offers instead. There has NEVER been a guarantee in the market of keeping ANY kind of health plan, because we have an economic system of free enterprise. 

Meanwhile, many people in the private insurance market don't know they can get cheaper plans through an ACA exchange, and/or qualify for subsidies. 

"But Obama still lied, he said we could keep our plans no matter what!" you still complain. Yes, it was a stupid thing of him to say, but he obviously meant that if the insurer wanted to comply with the grandfathering rules, then people could keep their plans. Many insurers chose not to comply with the grandfathering rules, which were well-known years ago:

A grandfathered plan is any policy in existence before March 23, 2010, when the ACA became law. Grandfathered plans must eliminate lifetime benefit caps, offer coverage to dependent children over age 26 and eliminate pre-existing condition exclusions in 2014, but they are exempt from most other ACA reforms.

The idea was to limit the impact of the ACA on those plans so that insurance companies would continue to offer them and employers and individual consumers could continue to enroll in them.

Under the ACA, a grandfathered plan can lose its status if out-of-pocket costs increase above the rate of medical inflation plus 15 percent, co-insurance rates increase, annual benefit limits decrease, employer contributions decrease by more than 5 percent, or the plan eliminates coverage for a previously covered condition.

So why are some people with ACA-compliant plans going to pay more? First, because Obamacare was a great excuse for insurers to raise their prices, let's be real. Secondly [emphasis mine]:

Should a grandfathered plan end, any new plan is subject to all of the ACA's reforms, including a minimum level of covered benefits. The 10 "essential benefits" required by the ACA include coverage for prescription drugs, preventative care, maternity care and mental health treatment. These new policies will offer consumers better coverage, but the expanded benefits may lead to higher premium prices for some. For others, this coverage may be comparable to or even more affordable than in the past. According to MIT economist Jonathan Gruber, approximately one-half of Americans in the individual market will likely have to purchase a new policy that may cost more.

Grandfathered Plans, the ACA and the 'If You Like Your Plan ...' Pledge

By Bob Semro

November 16, 2013 | Huffington Post

URL: http://huff.to/1eaf8Bh

Don't blame ACA for 'cancelled' health plans

Some medical insurance companies have already been fined for sending out misleading cancellation notices to their customers that don't even mention cheaper options available through new ACA exchanges. 

This was always the weakest aspect of Obamacare: depending on private health insurers to play nice.  They don't. They won't. Especially under ACA, consumers must remain savvy, well-informed and stick up for their rights.  

Meanwhile, health insurance companies keep adjusting their earnings numbers for 2013 upward -- largely thanks to Obamacare. So don't cry for them -- or cry "socialism!"  Please.

Anyhow, some customers have complained -- or more often, others have repeated complaints they heard from FOX or talk radio -- that they were satisfied with their individual insurance plan that was cancelled because their insurer declined to upgrade their plan to comply with Obamacare, or else insurers raised the price to comply. 

Two responses here. First, individual health insurance policies typically last one year anyway, and then insurers raise prices and change conditions when offering renewal -- this was the way long before Obamacare. The HHH's grandfathering rule for Obamacare stipulated that, to be grandfathered, plans couldn't be changed after March 23, 2010, and prices could only rise with the medical rate of inflation. Pretty strict, admittedly.

So Obama should not have promised you could keep your current plan if you liked it -- because insurers have never let you keep your plan the way it was if you liked it. Insurers always raise prices and/or decrease coverage. 

Over the past few decades, insurance costs have gone up while coverage has gone down. That was the trend before Obamacare.  That was what Republicans such as John Boehner and Mitch McConnell preferred.

Now in 2013, and projected again in 2014, the rate of medical inflation is going down, a heartening reverse of a long-term trend. 

Second, it's impossible to say for certain in every case, but I would bet that most of those people have not had a catastrophic event or even an ambulance ride under their current plan. Obamacare requires insurers to cover them in almost every instance to avoid medical bankruptcy, the #1 cause of personal bankruptcy in the U.S.  

And let's face it: currently, if you're an individual consumer, the primary reason for having health insurance is to avoid unpayable, unexpected medical bills that could ruin you. It really is insurance in the same sense as earthquake or life insurance: it only saves you in the worst-case scenario; the rest of the time it seems like a nuisance.

I predict that when all the dust settles and the website starts working, most consumers will realize they're getting a better deal.

Insurance cancelled? Don't blame Obama or the ACA, blame America's insurance companies

By Juan Williams

November 5, 2013 | FoxNews

Liar! Pinocchio! Deceiver!

With all the charges flying against President Obama in the on-going effort to stop ObamaCare it’s time for a reality check.

Having failed to kill the Affordable Care Act in Congress by shutting down the government the opposition is currently taking delight in charging the president will lying to the public when he said anyone who likes their current healthcare plan will be able to keep it under the new law.

It turns out that some people in the individual care market – about 5 percent of the overall insurance market -- are having their insurance policies cancelled. 

It is estimated that half of those folks will get better coverage for a lower price. Some people will even get subsidies to help them pay the lower price.

But some people losing their current policies [and being offered better coverage] are going to have to pay a higher price. Taking crocodile tears to a new level, ObamaCare opponents are now rushing to their defense and calling the president a liar.

These critics include Republican politicians who did not vote for ObamaCare; these are Republican governors who refuse to set up exchanges to reach their own citizens; these are people oppose expanding Medicaid to help poor people getting better health care; these are people who have never put any proposal on the table as an alternative fix for the nation’s costly health care system that leaves tens of millions with inadequate medical coverage and tens of millions more totally uninsured. 

The fact is if you are one of the estimated 2 million Americans whose health insurance plans may have been cancelled this month, you should not be blaming President Obama or the Affordable Care Act. 

You should be blaming your insurance company because they have not been providing you with coverage that meets the minimum basic standards for health care.

Let me put it more bluntly: your insurance companies have been taking advantage of you and the Affordable Care Act puts in place consumer protection and tells them to stop abusing people.

The government did not “force” insurance companies to cancel their own substandard policies. The insurance companies chose to do that rather than do what is right and bring the policies up to code. 

This would be like saying the government “forces” chemical companies to dispose of toxic waste safely rather than dumping it in the river. 

Or the government “forces” people to drive with intact windshields and working brake lights.

How dare they “force” drivers to pay money to get those things fixed if they are broken?

One of the most popular and important provisions of the Affordable Care Act is setting basic minimum standards of medical insurance coverage. Here are some of those standards:

- Your insurance company is no longer allowed to cancel your policy if you get sick

- Your insurance company cannot deny you coverage or charge you more if you have a pre-existing health condition

- Your insurance company must allow you to keep your children on your plan until they turn 26 years old or get a job that provides health insurance.

- Your insurance company cannot impose lifetime caps on your health coverage.

- And perhaps most relevant to current discussion about insurance companies canceling substandard policies, your insurance company must cover what are called “essential health benefits.”

What are “essential health benefits?”

They are clearly defined on HealthCare.gov:

“Essential health benefits must include items and services within at least the following 10 categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.”

That’s right.

If you are rushed to the hospital in an ambulance, the ACA says your insurance company has to pay for the ambulance ride. 

If your son or daughter has a bout with depression or suffers from panic attacks, the ACA says your insurance company needs to pay for their medicine and treatment from a mental health professional.

People should be angry that their insurance companies were not paying for these humane, common sense benefits all along. 

It baffles me that people are directing their anger at the ACA which rights these terrible wrongs.

The Hartford Courant newspaper reports that the CEO of Aetna insurance made $36 million last year plus several millions more in stock options. 

They also report that the CEO of Cigna cleared a cool $12.5 Million plus stock options. 

The American health insurance industry is one of the most profitable in the history of the world. Before the ACA, they made money by finding any excuse, any loophole to deny coverage to the sickest and most vulnerable people in our society.

Rather than being vindictive and canceling policies under the pretext of ObamaCare, the insurance companies should be thanking their lucky stars that they do not have to contend with a public option or a single payer system. That is what the law allows in every other modern industrialized democracy.