To get elected and reelected, President Obama promised Americans who liked their current doctors and health care plans that they would be able to keep it. But as the so-called Affordable Care Act, or ObamaCare continues to get implemented, it is now a proven reality that is not going to be the case for millions of Americans.
Insurance companies have sent out hundreds of thousands of letters, thus far, to consumers canceling their health care plans.
Kaiser Health News reports the cancelled policies “fall short” of the essential health benefits the ACA requires all plans include beginning Jan. 1, and are therefore not eligible for sale on the state and federally-run exchanges.
The law requires that all plans include coverage for maternity care, ambulatory services, prescription medications and much more, which are collectivist designed additions that critics say will drive up premium costs for policyholders who may never use them. Those critics are proving right, and Obama’s promise is proving a lie.
One of the insurance companies terminating policies are Kaiser Permanente in California, which has already sent notices to over 160,000 policy holders; Highmark Pittsburgh, which already dropped 20 percent of its individual market customers; and Independence Blue Cross, a major insurer in Philadelphia, nixing 45 percent of its individual policies.
The biggest hit state, thus far, has been Florida. State insurer Florida Blue has already dropped over 300,000 policies.
Ironically, policies for Americans with pre-existing conditions were also terminated, while other customers faced price increases since the failed rollout of the new insurance exchanges. Those with pre-existing conditions will now be forced into the government exchange, which is more expensive and provides inferior care.
For example, starting in mid-September, Blue Shield of California sent just under 119,000 cancellation notices to individuals, and nearly two-thirds of this group were notified of rate increases. Lowell Weiner, Vice President of Corporate Communications for Florida Blue, said in an email:
Florida Blue is proactively communicating to these members to help them understand how this transition affects them. Prior to their 2014 renewal date, each member will receive a letter that instructs them to contact Florida Blue to review their migration options. These new plans will offer members access to more comprehensive benefits in 2014. It is important to note that a person’s individual situation will be the key driver of what they will pay for coverage under the ACA. Subsidies will be available in the marketplace to lower the cost of coverage for eligible individuals, and the amount an individual will pay could vary significantly once his or her specific age, area in which they live, smoking status, family size, and income are factored in.
Yevgeniy Feyman, Manhattan Institute Scholar, said the cancellations are merely insurance companies acting as expected and trying to maintain the best business model.
“A lot of people will try to pin this on insurers and it’s important to see this as a business decision within the new regulatory framework,” he says. ‘It’s just insurers responding to changes within the regulatory system.”
While the policy termination numbers coming out of Florida are unacceptable and sadly unfortunate, Feyman says they are just the tip of the iceberg. “This will be happening across the marketplace,” he says. “A lot of these plans just aren’t qualified to be sold on the exchange.”
Insurance companies will have off-exchange alternatives, according to Feyman, which will have the same plan structure as what they offer on the exchange, except without exchange-based fees. What this means for Americans is that they may be a few dollars less, but consumers shopping for coverage off of the ObamaCare exchanges won’t qualify for subsidies.
Subsidies for plans on the federal and state-run exchanges are available for those making up to 400 percent of the federal poverty level, which is about $45,000 for an individual and $94,000 for a family of four annually. But when you factor in the costs associated with the plans in ObamaCare, such as deductibles and co-pays, the plans are far more expensive in all but 5 states.
While insurance companies knew of the changes coming under ObamaCare for awhile, Feyman says it’s likely the letters are being sent out now to cancel policies because they’re close to expiring.