Truth about Obamacare insurance policy cancellations

Lies and more lies. That's about all Republicans have been contributing to health policy discussions ever since the Affordable Care Act, a.k.a. Obamacare, became the law of the land.

Sure, the rollout of web sites where people can sign up for policies on the new health insurance exchanges has been rocky (to say the least). Criticisms are justified on this front.

I can't understand how Oregon, which received lots of federal dollars to get Cover Oregon up and running, still has an unusable web site after a full month of non-operation. Embarassing. Disturbing. But in no way a fatal blow to my state's Affordable Care Act participation.

Oregon has reduced the number of people without health insurance by over 10% in just two weeks through Obamacare's expansion of Medicaid eligiblilty.

Though Oregon's health insurance exchange is not yet up and running, the number of uninsured is already dropping thanks to new fast-track enrollment for the Oregon Health Plan.

The low-income, Medicaid-funded program has already signed up 56,000 new people, cutting the state's number of uninsured by 10 percent, according to Oregon Health Authority officials.

And people such as my wife, who was told by Regence of Oregon that her private insurance policy was being cancelled, have been able to choose a replacement Cover Oregon plan by using a broker/navigator.

Like I said in "Cover Oregon worked for us -- much better than Regence," Regence Blue Cross of Oregon used to cancel our policies every few years, or even more often. We'd be forced to switch to a different plan with higher costs and fewer benefits.

With no ability to shop around, because of our pre-existing conditions. We were stuck with whatever Regence made us accept. 

So the GOP hue and cry over some individual policyholders needing to move to another health insurance plan strikes my wife and I as horribly misguided. We were happy to have Regence cancel my wife's policy because it didn't comply with Affordable Care Act standards.

Now she'll be getting much better benefits for her premium payment.

Before, we had a very high deductible with crappy prescription drug coverage. Her Regence premium was less than the LIfewise plan she signed up for via Cover Oregon, but overall we paid much more each year for her health care than will be the case now that the Affordable Care Act is in effect.

This graph shows the Obamacare winners and losers (click to enlarge). 

I suppose we are in the tiny "3% potential losers" red slice, because my wife had to move to a more expensive health insurance plan with much better benefits. But as noted above we really didn't lose anything, since overall almost certainly we will be spending less out of pocket on health care.

The big 80% blue slice represents the people who are unaffected by Obamacare. And the 14% green slice is the Big Winners -- those currently uninsured who gain access to an affordable policy.

Anyone who understands this big picture, which should include all of the GOP politicians wailing about the few people who are going to have to pay more to get the better benefits that they should have been getting all along, should realize that Obamacare is benefitting hugely more than it is hurting.

In fact, arguably Obamacare isn't hurting anybody. Because everybody should have good health insurance, even young healthy people who wrongly believe they won't ever need it. 

Sure, they'll have to pay more, since before they didn't have any health coverage at all. Similarly, the cost of buying a car went up a bit after air bags were required. Small price to pay for saving so many lives -- just as Obamacare will do. 

Here's some thoughtful analyses that explain why cancelling some insurance policies because of Obamacare is a good thing:

"Rate Shock": The GOP's shameful new Obamacare lie

The disruption we’re seeing in the individual insurance market is mostly by design. And it’s mostly a good thing. Until October, the individual market existed to sell insurance to people who needed it least. Rates were low for healthy people precisely because their old, sick neighbors were priced or locked out of the system. They were also low because many of the policies on the market didn’t actually fulfill the function of insurance, which is to hedge against financial catastrophe.

The Uproar Over Insurance 'Cancellation' Letters

A true cancellation is when someone gets a letter saying that she’s losing her insurance and cannot renew. That was common practice in the individual market for people with expensive conditions. Under the new law, no one will ever get a letter like that again. They cannot be turned down for insurance.

The so-called cancellation letters waved around at yesterday’s hearing were simply notices that policies would have to be upgraded or changed. Some of those old policies were so full of holes that they didn’t include hospitalization, or maternity care, or coverage of other serious conditions.

Republicans were apparently furious that government would dare intrude on an insurance company’s freedom to offer a terrible product to desperate people.

Coverage under health-care law may change -- for the better

Though some people might pay more than they did before, they and many others will also get more. Among other things, they will be less financially vulnerable when they get sick — in some cases dramatically less. Their new plans will also put taxpayers at less risk of having to cover big medical bills when under-insured patients unexpectedly fall very ill. That goes, too, for people who currently decline to buy insurance but who will have to next year.

Reform still might not sound like a great deal to people who are young, feel healthy and don’t want to pay for coverage . Yet having lots of healthy people paying into the new system on its terms will not only limit their financial risk, but also their participation will allow others who have been priced out of the health-insurance market — those with serious preexisting conditions, for example — to obtain good coverage. They deserve compassion, too.

None of this is an outrage. It’s the predictable result of a defensible policy choice embedded in the reform.

Comments

[Aileen Kaye]

Excellent!

[tucson]

I'm not surprised. Blogger Brian has found a way to sugar-coat the debacle that is Obamacare. We may yet get what was the plan all along: a single payer system that probably will further bankrupt the country.

Blogger Brian is happy but according to polls today Obama has a 51% disapproval rating and only 42% approval. According to a Wall Street Journal, NBC (or ABC) poll only 37% think Obamacare is a good thing while 47% think it is a bad thing. I guess the other 16% are undecided, don't care, or live off the grid somewhere north of the arctic circle.

[Gin Richardson]

How can you say the letters were not cancellation letters? You did not see them. Did you read the policies? You don't know if the policies were full of holes or not. If I took a letter to a hearing, I would be sure that it contained the information that I claimed it did. It would be easy for the ones holding the hearing to ask for volunteers to share their letters.
Based on your attitude, you probably won't believe me, but my insurance premium is going up in January and the amount the policy will pay has been reduced. So, I don't have better coverage - I have less and will pay more. My daughter's insurance is also going up. Her coverage did not increase. I have talked with other people who have experienced an increase in cost, but their insurance is not better.
I am glad for you, but as for me, it was not a good thing. You should be ashamed for accusing the people of being untruthfull.

[Brian Hines]

GIn, I presented facts. If you have other facts, please present yours. Facts are facts. We don't need more lies about Obamacare.

Have you checked out what sort of replacement policy you can get via the Obamacare health exchanges? I bet you'll find that you can buy a better policy at a cheaper cost than what your insurance company was offering you before.

If you haven't checked out the exchange for your state, you haven't learned all of the facts about Obamacare.

Do that first, before accusing me or anyone else of being misleading about this terrific expansion of health coverage to almost all Americans -- something the rest of the industrialized world has had for a long time, leaving us at a competitive disadvantage.

[Jerry]

Brian, respectfully Gin's citing of cancellation and increased premiums and less coverage is just as factual as your wife's example.

Citing examples is now the only means of evaluating of the performance of Obamacare, unless you want to get into tit for tat policy discussions. Obamacare can't furnish any numbers yet for evaluation.

Here's a factual cite concerning a local small product/service business in Hillsboro. They have about a 100 employees. The employees are mostly in the lower range of wages. For over 30 years the owner always believed in providing health insurance. Recently their quality, comprehensive Kaiser insurance was cancelled due to the typical Obamacare cancellation letter. Their new insurance with Kaiser went up 37% with medical visit increasing from $5 to $25 and deductible increasing 3 times, and several past medical procedures covered now not covered. The employees are shocked and regard this as a tremendous increase. As best as can be calculated considering all the differences in the policy, it is over a 58% increase for the average employee.

Your wife's example may be factual, but you are going to hear about many examples to this Hillsboro company's experience. And as business requirements start in 2014, you will hear a lot more that will be contrary to your summary that Obamacare is great.

[Brian Hines]

Jerry, any insurance policy that was "quality, comprehensive" as you put it isn't going to be affected by Obamacare. Only poor quality, non-comprehensive policies are.

The Affordable Care Act defines what quality insurance should cover. If these employees have to switch to another plan, that's good for them. Because their previous insurance wasn't up to par.

It's like if the government allowed some people to save money on buying a new car by not having airbags, seat belts, or good crash protection. Sure, buying a car that keeps you safe is more expensive, but it also is worthwhile.

This is what Obamacare has done: forced the insurance industry to stop foisting crappy policies onto people who aren't well informed about the crap they're getting, or didn't want to pay for a better policy. Sorry, but I don't believe that the employees you mention had a quality, comprehensive health insurance policy before.

They might have believed they did, but then people believe a lot of things that are wrong. Like, Obamacare is bad for this country.

[tucson]

Obamacare is not so good for this person:

http://online.wsj.com/news/articles/SB10001424052702304527504579171710423780446

[Jerry]

Brian, excuse my previous English. I didn't proof read.

I don't think you comprehended what I wrote. The employees had "quality insurance". The employer/employees received a letter from Kaiser stating because of Obamacare their insurance would be cancelled. So the company is having to enroll in a new insurance program costing more as I stated with less coverage, etc. It wasn't "crappy". The previous medical coverage paid for several heart operations, cancer incidents, a kidney transplant that so far has cost over $1 Million because of complications, pregnancies, etc. It was "quality".

You need to do some research and listen to what many are saying/writing. If you think I'm making this up your wrong. Keep believing what you want to believe.

Fellow Oregonian and democrat.

[Brian Hines]

Jerry, my point still is true: the only reason insurance plans are being cancelled is when they don't meet minimum quality standards established by the Affordable Care Act.

Likely the employees of this company, or the managers, can find a cheaper and better plan through Cover Oregon. Obamacare introduces genuine competition into the health insurance marketplace, because now people aren't stuck with their current company due to preexisting conditions.

Also, keep in mind that a few percent of people will see their premiums increase, while hugely many more will be able to get health insurance for the first time.

Let me be blunt: it is the height of selfishness and narrow-mindedness to get all excited because a few people will pay more under Obamacare while tens of thousands of lives will be saved each year because health care will be available to them.

I can't understand how people, including you, it seems, are blind to this fact. What kind of country have we become when compassion for the many is outweighed by some minor inconvenience to a few? I don't want to live in this sort of country, which is why I'm proud to be a strong supporter of universal health insurance.

By the way, I worked in health planning/policy analysis for quite a few years, so I'm not exactly ignorant about how our health care non-system works. Or rather, doesn't work. We have a horribly broken system, which Obamacare is beginning to fix.

[Jerry]

Brian, sorry you have to call me blind, when all I'm doing is citing a fact, and in alluding that I or owner or employees of this company have no compassion.

In fact over 1/2 of the employees are immigrants working at this company and regard their pay and benefits including a retirement program, quality health care, scholarships for their children and a supportive work environment as several reasons they came to America. This category of people you think we need to help are sometimes the people Obamacare is harming as proven by my example. And there are many more. I won't get into an argument about numbers because I don't think it is fair to disregard those that are hurt and debate that you should disregard a "few".

In a way I have been involved with health care with my wife working at the Legacy System , VA, and Eastmoreland for over 35 years and have seen the changes in healthcare in just the four years of buildup to where we are today.

[Brian Hines]

Jerry, to me genuine "compassion" means looking beyond our immediate viewpoint. I understand your concern for a few employees at one company.

I just wanted to remind you and others that Obamacare affects many other people, and that it is inevitable that a small percentage of people will pay more for better coverage, while a great many more will be able to finally have health coverage at all.

I speak this way from experience, having been active in Oregon Health Decisions when it explored ethical issues in health care. It's the "kitten in a well" thing.

People are naturally drawn to be highly concerned about helping someone or something right in front of them (like a child needing an organ transplant), while turning a blind eye to much more important needs that aren't immediately visible (like tens of thousands of Americans dying needlessly each year because of a lack of health care).

As a society, we need to be cautious and aware of this. Otherwise the company or person who gets the best news coverage will win out over those who truly need society's compassion and care.

Here's some more news links that support my contention regarding the over-focus on insurance policies being cancelled. They note that often the facts in specific cases are dubious, with a closer look showing that actually it was the insurance companies at fault, or individuals not realizing they could get better and less expensive coverage through the exchanges.

http://m.dailykos.com/story/2013/11/04/1252957/-How-ObamaCare-Cancelled-Your-Plan-is-really-an-Insurance-Co-Scam-to-Rip-You-Off?detail=facebook

http://www.publicintegrity.org/2013/11/04/13676/what-congress-didnt-say-obamacare-outlaws-policies-are-essentially-worthless?utm_source=publicintegrity&utm_medium=social_media&utm_campaign=twitter

http://thinkprogress.org/health/2013/11/04/2881581/wall-street-journal-horror-story-cancer-patient-losing-doctors-wrong/

http://www.newrepublic.com/article/115457/obamacare-victim-florida-happy-she-can-get-real-coverage