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Cancelled Coverage, Better Care?
Posted on Dec 16, 2013 by Ailee Slater (G+)
The Affordable Care Act is changing health care and insurance in America, in a big way. Change is never easy, but the switch to President Obama’s signature health legislation has been especially fraught with controversy and complaint: repeated Republican attempts to delay or defund the law; arguments over Medicaid expansion; and technical glitches in online insurance marketplaces. Most recently, the Affordable Care Act has been accused of forcing some Americans to leave their current insurance policy – whether they want to or not.
When the Affordable Care Act was first passed, President Obama said that Americans happy with their current health plan would not have to leave it; however, this statement proved false. Some Americans’ current insurance plans do not comply with the ACA’s minimum care guidelines – the plans do not offer, for example, full dental coverage or maternity care. Because of these coverage deficiencies, the insurance plans are no longer legal, and policyholders were informed in November that their current coverage would be ending in 2014.
Many of these policyholders are upset at having to move away from coverage that they see as affordable and sufficient; especially because they were promised, by the President, that their current plan would remain. Making matters even more difficult for these soon-to-be uninsured Americans is the fact that in many states, online insurance marketplaces are not yet functioning properly – meaning that on top of facing insurance cancellation, these policy holders can’t even shop around for a new coverage plan.
The President has responded to this controversy in a few ways – firstly, with an apology to Americans asked to leave a health insurance plan they liked. But President Obama has also reiterated the fact that asking insurers to offer customers a defined list of services is still a good idea. Minimum care regulations ensure that all insured Americans have access to comprehensive health care – for dental work, substance abuse treatment, vision needs and so on.
In the issue of minimum coverage and cancelled policies, insurance companies are not blame-free. President Obama has reminded consumers and insurers that according to the Affordable Care Act, insurance policies have one extra year to comply with ACA minimum care requirements, meaning that insurance companies dropping customers right now, one year early, are doing so of their own volition, possibly to gain higher premium revenue, but not because of Obamacare. In fact, the President has even requested that all insurance companies allow customers to renew their existing insurance policies for the next year, although compliance with this request may vary by state.
Interestingly, some Americans were quite pleased to receive cancellation notifications from their current insurers. Kaiser Health News reported last month on Barbara Neff of California, a freelance writer relieved to find out that her current health plan would be ending. Due to chronic back problems, Neff had been trapped on a policy that required high deductibles (up to US$5,000) for any health treatment. On the California health insurance exchange, however, Neff found a plan that saves her $3,000 on deductible payments and offers free preventative care. Even though Neff’s new plan does require a higher monthly premium, she told Kaiser News that the additional monthly costs are absolutely worth a lower deductible and better minimum standards of care.
Other Americans with cancelled insurance have likewise reported that, in the end, they are happy to have the opportunity to find a new plan. Insurance policies available through state and federal exchanges guarantee a set of services, do not discriminate based on pre-existing conditions and, in many cases, offer less expensive deductibles and premiums than existing policies. What’s more, by joining a health exchange, consumers are eligible for government-sponsored subsidies to help pay for coverage – Americans who choose to stay with their current policies cannot claim this financial benefit.
In states such as California, where online insurance marketplaces are functioning well, consumers with a cancelled health policy can easily shop around for a new plan. In states such as Oregon, where online exchanges have been fraught with technical difficulties, consumers have a much more difficult task. Oregon has yet to successfully enroll even one person to the exchange, and Oregonians have expressed much frustration over their inability to shop for insurance coverage. For those Americans losing their current coverage, the situation is even worse – they will be left without insurance starting in 2014, and yet with less than a month left of the year, they cannot find a new insurance plan.
Policymakers have said that they are working hard to get the Oregon insurance marketplace running properly. To further aid Oregonians slated to lose their existing health plan, Oregon lawmakers have used recent statements by President Obama to require that insurance companies allow all coverage options to remain until 2015, and it is likely that other states may do the same. Still, putting off insurance cancellation will only delay the problem one year, and Americans on a policy that doesn’t comply with ACA minimum care standards should start shopping for new coverage as soon as possible – a task that may prove both a burden, and a blessing.