Health insurance companies are sending notices of cancellation to hundreds of thousands of people who buy their own coverage, frustrating some consumers who want to keep what they have and forcing others to buy more expensive policies.
Insurers say the cancellations are necessary because the policies fall short of what the Affordable Care Act requires starting Jan. 1. Most are ending policies sold after the law passed in March 2010. At least a few are canceling plans sold to people with pre-existing medical conditions.
By all accounts, new policies to replace the canceled ones offer consumers better coverage, in some cases for comparable cost – especially after the inclusion of federal subsidies for those who qualify. They cover 10 “essential” benefits the law now requires, including prescription drugs, mental health treatment and maternity care, and they generally have lower thresholds for what consumers will have to spend before the plan picks up the full cost of treatment.
But the cancellation notices, which began arriving in August, have shocked many consumers in light of President Barack Obama’s promise that people could keep their plans if they liked them.
“I don’t feel like I need to change, but I have to,” said Jeff Learned, a television editor in Los Angeles who must find a new plan for his teenage daughter, who has a health condition that has required multiple surgeries.
An estimated 14 million people purchase their own coverage because they don’t get it through their jobs. The impact of the cancellations has been felt across the country.
Florida Blue, for example, is terminating about 300,000 policies, about 80 percent of its individual business in the state. Kaiser Permanente in California has sent notices to 160,000 people – about half of its individual business in the state. Insurer Highmark in Pittsburgh has canceled about 20 percent of its individual market policies, while Independence Blue Cross, the major insurer in Philadelphia, is canceling about 45 percent.
Both Independence and Highmark are canceling so-called “guaranteed issue” policies, which were sold to customers who had pre-existing medical conditions when they signed up. Policyholders with regular policies because they did not have health problems will be given an option to extend their coverage through next year.
Consumer advocates say such cancellations raise concerns that companies may be targeting their most costly enrollees.
Read more at MCCLATCHY DC.