The Truth About The “Obamacare” Cancellations

Posted: November 10, 2013 in Current Events
Tags: , , , ,

cancellation

Wading through all the rhetoric, I’ve come to these conclusions:

  • Health insurance companies are trying to take advantage of the situation – Health insurers have been sending out notices cancelling plans.  In those notices, they blame Obamacare for those cancellations.  They further offer new more expensive plans that the insured will be enrolled in if they take no action before a certain date.  However, they FAIL to mention the new insurance exchanges where not only they might find a cheaper, better option, but also might find that they qualify for credits toward their health insurance.  (Another ploy has been trying to pressure current insureds to renew their current plan or be force onto new, more expensive plans, once again without making it clear that finding another plan on the exchange is also an option.)
  • Any plan COULD have been grandfathered and remain with a few modifications – Plans in place prior to March, 2010 could remain, as long as they were modified to cover children through the age of 26, end lifetime coverage limits, provide a summary of benefits, end arbitrary cancellations, and have most of the money spent on actual health care as opposed to administrative costs and bonuses.  NONE of the other Obamacare provisions would apply.  (However, if a company opts to start making other changes to the plan, then yes, then they have to make it Obamacare compliant.  Insurers also can’t enroll anyone new into the grandfathered plans.)
  • A lot of people who “like” their plan only care that they have something they can call “health insurance”, even if their plan sucks – Prior to Obamacare, there was the existence of what was called “junk insurance”.  To be fair, the people who have these plans often don’t even know that their plan sucks, they just know they have “insurance”.  These plans often cover VERY little, and barely qualify as insurance at all.  (And sometimes what people are buying are “supplemental” plans, which are called “supplemental” because they are supposed to supplement other plans, not be the plan.)
  • The people going on television thinking they are getting ripped off by the law often are not actually getting ripped off – I’ve ran across two examples of people who have gone on tv as examples of being wronged by Obamacare, but once people walk them through their current plan and the options they have, they actually come out ahead.  The first example, the insured would indeed have to replace her $46 per month “supplemental” plan with a $97 per month plan.  The rub though is the $97 per plan is an actual health insurance policy with real coverage, not just some minor supplemental coverage.  So when this woman actually has health issues and is in need of services, the savings will be significant.  The second example, the insured could actually pay less ($194 per month versus $256 per month) for a plan with the same deductible, but lower maximum out-of-pocket limits and more coverage.  In other words, it’s a better plan for less premium.
  • But even with all that said, President Obama should have never said “if you like your current plan, you can keep it” – The fact of the matter is that some people were probably were aware that their plans were “junk”, but were still happy with it.  Also, there are certainly plans that were borderline compliant that people were happy with.  But I think maybe more importantly, that statement sent the message that as long as you have a plan, you have nothing to worry about.  So a lot of people were under the impression that they could just forget about it, when actually that hasn’t been the case.  In other words, they thought the law would either not affect them, or in as so much as the law would have a positive effect, it would just have that positive effect without them having to do anything, to shop around for a new plan.  And some are seeing that as a betrayal of trust.
  • And it makes me wonder yet again if the mistake here is trying to work within the current framework of insurance, or should health care even be in the private sector? – For most of us, insurance is a big hassle that we would just like to forget about.  When is the last time you looked at your policy?  (really any policy, health, auto, home?)  We get it because we know we need it, but we don’t really have the time to figure out all the ends and outs of it all.  I think for most of us, when it comes to health care, we just want to be able to know we can get the care we need without going into bankruptcy.  I am just not sure how well suited the health care industry is for what normally makes a free market system work.  Even in the examples above, those two consumers have media members walking them through their options.  Before that, they really thought they were getting screwed over.  Everyone else has to know to go to a website or make a call (a website that doesn’t work so well and from what I hear the customer service provided over the phone isn’t  always so great either) and then try to work through the complexities of insurance options on their own.  Add to that the totally nonsensical billing for hospital procedures, and it’s hard to have the knowledgeable consumer base to create a truly competitive market.
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Comments
  1. aeternitate says:

    Your last point is well taken. It seems that once Obamacare gets laid out, the situation will be better, but will need more work. Health care billing will need to be controlled, plans should be more standardized and easier to understand.

    Obamacare was never meant to be a fix-all, and that’s probably why there are few people defending it.

  2. gesvol says:

    Working to continuously improve the health care situation is what I would like to see. However, in the current political environment, it is hard to see how that’s going to happen for quite a while.

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