Health insurance cancellations have increased by “hundreds of thousands,” according to a new report from Kaiser Health News. The cancellations are directly related to new rules and regulations implemented by the Patient Protection and Affordable Care Act (PPACA), insurers are reporting.
Starting on January 1, companies will no longer be allowed to refuse coverage based on pre-existing conditions. This requirement extends to maternity services, which would normally have to be purchased as a separate rider. Under PPACA, this is no longer the case.
The law also requires policies to cover 10 “essential” benefits, such as prescription drugs and mental health treatment. Additionally, insurers cannot reject people with medical problems or charge them higher prices, Kaiser stated, adding that policies must also cap consumers’ annual expenses “at levels lower than many plans sold before the new rules.”
While some companies plan on waiting until December 31, 2014, to sunset existing policies, many others have been getting a jump on things, with most health insurance cancellations starting in August of this year and continuing to the present.
Altered Expectations
When the health care law was enacted, President Barack Obama assured US residents they could keep existing coverage.
“Let me be exactly clear about what health care reform means to you,” the President said at an event in 2009, prior to the law’s passage. “First of all, if you’ve got health insurance, you like your doctors, you like your plan, you can keep your doctor, you can keep your plan. Nobody is talking about taking that away from you.”
A month later, he clarified in comments reported by ABC News. “When I say ‘If you have your plan and you like it … or you have a doctor and you like your doctor, that you don’t have to change plans,’ … what I’m saying is the government is not going to make you change plans under health reform.”
However, all plans must cover the essential benefits, even when patients would never use certain aspects (i.e. maternity care for seniors, single male adults, or women who have had hysterectomies). Policies that do not cover each of the 10 essentials will be in violation of PPACA.
As a result, many individuals, who have been receiving health insurance cancellations are finding themselves without the coverage they preferred and placed into a system where they will be forced to pay more money for health insurance.
Los Angeles TV editor Jeff Learned summed up his feelings in comments to Kaiser: “I don’t feel like I need to change, but I have to.”
Kris Malean, a 56-year-old Seattle woman, said she paid $390 a month with a $2,500 deductible and a $10,000 cap on out-of-pocket expenses, which covered doctor visits, drug costs or hospital care.
As a result of policy changes, Malean, who is not eligible for subsidies, will pay $79 more per month for a $5,000 deductible with a new cap of $6,250 in potential out-of-pocket expenses. “My impression was …there would be a lot more choice, driving some of the rates down,” Malean said.
Patrick Johnson, CEO of the California Association of Health Plans, acknowledged that the numbers are “inescapable … no matter what people in Washington say.”
Critics’ Ammunition
What is particularly eye-opening about the new report from Kaiser is that the foundation has been a champion of the law through much of the legislation’s turbulent history.
In fact, the organization offers the only (working) subsidy calculator so Americans can check out what (if any) help they can expect to receive with rising premiums.
Coupled with the fact that President Obama himself has expressed frustration and disappointment with the performance of the HealthCare.gov website, critics — many of whom are Republicans, but not all — are finding a plethora of ammunition to mount new attacks.
Liberal commentator Ezra Klein of the Washington Post had this to say: “So far, the Affordable Care Act’s launch has been a failure. … Not ‘troubled.’ Not ‘glitchy.’ A failure. But ‘so far’ only encompasses 14 days. The hard question is whether the launch will still be floundering on day 30, and on day 45.”
Klein acknowledged that “a lot of liberals will be angry over this post,” and that “a lot of conservatives will be happy about it.”
“But it’s important to see the Affordable Care Act as something more than a pawn in the political wars: It’s a real law that real people are desperately, nervously, urgently trying to access. And so far, the Obama administration has failed them.”
Klein continued: “The Obama administration’s top job isn’t beating the Republicans … It’s running the government well. On this — the most important initiative they’ve launched — they’ve run the government badly. They deserve all the criticism they’re getting and more.”
Klein and other critics were also unimpressed by the lack of details offered in President Obama’s speech addressing the website issues on Monday. While the President said he was “madder than anyone” over the hiccups and promised that the top IT talent in the nation were working to correct the problem, he did not provide a completion date, nor did he specify what the problem(s) were, as many expected him to do.
