Topics: Obamacare

For some, losing so-called bad apple health insurance plans will mean paying more for less

By |
Politics,White House,Congress,Susan Ferrechio,Barack Obama,Obamacare,Health and Human Services,Health Care,PennAve,Kathleen Sebelius

Hadley Heath's health insurance plan seemed to have it all. A low deductible, low monthly premium, and comprehensive coverage that even included free preventative care.

But Heath's insurer, CareFirst Blue Cross Blue Shield just sent her a letter, announcing they will terminate her plan because it lacks "Essential Health Benefits," mandated under the Affordable Care Act.

Heath is one of millions of people holding individual health insurance plans who are about to lose them. Florida Blue will drop 300,000 policies that don't meet the ACA requirements, while 150,000 Oregon residents who are signed up under individual plans will also lose their current coverage. California's Blue Shield sent termination notices to 119,000 policy holders, an official told the Washington Examiner.

Many of those policy holders are now facing higher deductibles and higher monthly premiums if they purchases a new policy under Obamacare.

In Heath's case, if she chooses the cheapest policy known as the bronze plan from the newly-created health care exchanges, she will pay a $200 monthly premium, up from the $113 she pays under her soon-to-be-cancelled plan. And her deductible would increase from $2,700 per month to $3,500, according to estimates from her current insurance provider.

In the words of President Obama, Heath holds a policy issued by a "bad apple" insurer. Health and Human Services Secretary Kathleen Sebelius called plans like Heath's "medically underwritten," while Rep. Henry Waxman, D-Calif., said last week such plans are being eliminated because they have "flimsy" and "deficient" coverage "that disappears when people actually need it."

Waxman added, "Nobody should want that."

But Heath was happy with her policy and wanted very much to keep it.

"My plan is not a junk plan," said Heath, who is a health care policy analyst at the Independent Women's Forum in Washington D.C.

"It's got emergency room care, primary care, immunizations and it has hospitalization coverage."

Heath's deductible is higher than some policies but there is no lifetime cap on coverage and she utilizes a tax-exempt medical savings account to ensure she can meet the deductible if needed.

"That way, I feel some responsibility," Heath explained.

Heath's insurer offered no details about why her plan was dropped, other than to report that it does not include one or some of the 10 "essential health benefits," now required on every insurance policy under Obamacare.

According to the healtcare.gov website, all health care plans must include 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.

Heath, who is 25 and doesn't have children, said she wasn't looking for a plan that included things like pediatric dentistry, chronic disease management or substance abuse help.

"I feel a little insulted," Heath said. "I'm a grown up. Let me decide what's best for me. I think I should be in charge of that."

By some estimates, up to 80 percent of the individual market, which includes as many as 16 million people, will lose their plan because it does not meet the new coverage standards under Obamacare. And new reports suggest when the employer mandate kicks in next year, tens of millions more people will be dumped from their employer-sponsored plans and into the health care exchanges.

The Obama administration, meanwhile, has continued to defend the cancellations of individually purchased policies as necessary in order to rid the market of so-called junk plans.

In California, Blue Shield decided not to allow any customers to keep their individual plans. They sent cancellation notices to all 119,000 of their policy holders.

"It would have been difficult to find plans that had all ten essential health benefits," Stephan Shivinsky, Blue Shield's vice president of corporate communications, told the Examiner.

Policies purchased before the health care law took effect in March 2010 are supposed to be exempted by the new health care law requirements, so long as they do not alter their coverage or prices too dramatically.

On Fox News Sunday, host Chris Wallace challenged an Obamacare architect, Ezekiel Emanuel, on the administration's exclusion of policies that have as little as a $5 increase for co-payments.

"That's usually a 25 percent change," Emanuel said. "That's a big change."

Mike Tanner, a health care policy scholar at the libertarian Cato Institute, said people are discovering that the plans offered on the health care exchanges are not always cheaper, in part because more comprehensive coverage is required and because the costs are shifted around to cover the sickest. Young people like Heath, Tanner said, "are getting charged significantly higher premiums."

Independent Women's Voice has launched the website, mycancellation.gov to showcase the cancellations letters people are receiving from health insurance companies.

A Blue Cross Blue Shield letter posted Sunday from a North Carolina policy holder showed a 2013 premium of $456 per month increasing to $1,260 per month.

Another letter, also posted Sunday, showed a policy holder losing a plan that costs $367 per month and being offered a plan for a monthly rate of $641. The deductible on the new plan would increase from $2,200 out-of-pocket maximum for an individual plan to $6,350.

View article comments Leave a comment