President Obama reversal on health plan gets mixed reviews

FILE - In this Friday, Nov. 15, 2013 photo, the shadow of Health and Human Services Secretary Kathleen Sebelius is cast on a wall as she speaks at the Community Health and Social Services Center in Detroit. A month after President Barack Obama announced people could keep insurance policies slated for cancellation under the federal health overhaul, the reversal has gotten a mixed response from insurers, state regulators and consumers. (AP Photo/Paul Sancya, File)

AP Photo/Paul Sancya, File

FILE - In this Friday, Nov. 15, 2013 photo, the shadow of Health and Human Services Secretary Kathleen Sebelius is cast on a wall as she speaks at the Community Health and Social Services Center in Detroit. A month after President Barack Obama announced people could keep insurance policies slated for cancellation under the federal health overhaul, the reversal has gotten a mixed response from insurers, state regulators and consumers. (AP Photo/Paul Sancya, File)

RALEIGH, N.C. (AP) — President Barack Obama's decision a month ago that allowed people to keep insurance policies once slated for cancellation under the federal health overhaul has received a mixed response from insurers, state regulators and consumers.

In pitching the overhaul, Obama had long promised that people who liked their policies could keep them. But many consumers complained upon getting notification from their insurers in October and November that their individual policies would be canceled because they didn't cover basic benefits required by the Affordable Care Act, such as pre-existing conditions or hospitalization.

Then, Obama announced Nov. 14 that companies could continue existing policies that don't meet the minimum requirements if state regulators approved.

Reporting by The Associated Press shows that older policies are being allowed to continue in 36 states, either because officials allowed it after Obama's announcement, decided not to intervene in any way or had made a decision earlier in the year to extend non-compliant policies for a period of time.

Even so, insurers were given a choice of whether to continue the policies, and some declined to do so.

In Kentucky, insurers Humana, United Healthcare and Assurant chose to extend old policies while Anthem and Bluegrass Family Health opted against it. Seven companies in South Carolina are extending individual plans the federal law considers substandard, while six companies are extending plans in the small group market. Twenty are not participating.

In North Carolina, only Blue Cross and Blue Shield, which controls about 80 percent of the state's market for individual and small-business policies, offered to renew plans covering 474,000 people that had been slated for cancellation. North Carolina's insurance commissioner allowed the company to raise premiums by between 16 percent and 24 percent.

Prices on non-compliant policies are rising in other states, as well. Anthem Blue Cross in Maine plans to raise premiums by an average of 12 percent on its no-longer-canceled policies. The Blue Cross provider in neighboring New Hampshire expects an average 7 percent increase, an amount that is in line with previous years' premium increases. Blue Cross Blue Shield of Illinois said it would seek undefined price changes.

Raleigh attorney Jeff Poley, 42, says he is fine with paying more for his current policy, considering what it would have cost him to switch to a new one. He has been covered with a high-deductible health policy from Blue Cross for the past two years, which currently costs $137 a month. The plan does not cover maternity and some other benefits required under the Affordable Care Act.

When he initially received a cancellation notice, Blue Cross said the closest plan that met all of the new federal requirements would cost nearly twice as much.

But after Obama's announcement, Blue Cross offered to extend Poley's old plan for another year at $170 a month. His wife is covered by a policy through her law firm.

"I was glad for the one-year reprieve, but I would still like a permanent fix because I don't need abortion coverage, I don't need maternity coverage," said Poley, who said he exercises vigorously about six days a week. "We as a family had made that choice, and we are two intelligent people who know better what's good for our family than the government does."

About 15 million Americans buy policies as individuals, according to Families USA, a nonprofit organization that backs health reform. Before Obama's announcement, insurers sent at least 4.7 million policy cancellation notices, according to a tally by the AP. The number is likely much higher because officials in nearly 20 states said they were unable to provide information on cancellation notices or were not tracking it.

Sabrina Corlette, project director at the Health Policy Institute at Georgetown University, warns that Obama's decision last month could allow younger people with relatively few health problems to stay on bare-bones policies. That could lead to higher premiums in 2015 to offset insurers' cost of covering people with more health problems, she said.

Still, even before Obama's announcement last month, a pathway existed for many consumers to hang onto policies that didn't conform to the ACA requirements, at least for a brief period of time.

Many states allowed insurers to offer early renewals to non-conforming policies, but some of those will expire on March 31. Early renewals are allowing 60-year-old artist Marlys Dietrick of San Antonio and her 21-year-old son to stay in their old policies.

Dietrick jumped at the chance when Humana offered in October to renew her expiring, high-deductible policy early for $315 a month — an increase of about $15. She and her son both must spend $7,000 per year on medical bills to meet a deductible before the company starts paying.

Her insurer told her it would charge $705 a month for a similar policy that met the new standard required under the health care law. She earns too much to qualify for tax subsidies.

"I'm not saying I loved my insurance. I'm just saying I was able to keep the costs down by being able to tailor it to me and my needs," she said. "I'm 60. I don't need maternity. I don't need pediatric. I'm healthy, I don't need drug coverage. I don't need mental health. There's like five things that allowed me to keep my costs down. I was able to pick-and-choose."

Consumers Union health care reform analyst Lynn Quincy said staying with an existing policy is a natural starting point. But renewing an existing policy with a high deductible or excluding types of coverage needed later may not turn out to be the best deal, she said.

"If your old coverage continued, that's fine. But look at your other options before enrolling, because you can't be turned down now" for pre-existing health conditions, she said.

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Comments » 15

dreckerson writes:

I just spent half my evening trying to get registered and in the end, it said I didn't qualify for covered california. it took us four nights and about an hour each night before the site would complete our application. At first it said the kids alone would be $4 a month. When we finally got to the "order" page, that amount went up to $199 for the low end plan. It wouldn't even insure us, the parents! Is this a bit weird to anyone out there? WARNING: When the site quotes you a really low figure, that's not what you will end up getting. And, set aside several hours to get through all the questions, only to have the site screw up. Only a government agency could make something so simple, so complicated.

waynes-world writes:

in response to dreckerson:

I just spent half my evening trying to get registered and in the end, it said I didn't qualify for covered california. it took us four nights and about an hour each night before the site would complete our application. At first it said the kids alone would be $4 a month. When we finally got to the "order" page, that amount went up to $199 for the low end plan. It wouldn't even insure us, the parents! Is this a bit weird to anyone out there? WARNING: When the site quotes you a really low figure, that's not what you will end up getting. And, set aside several hours to get through all the questions, only to have the site screw up. Only a government agency could make something so simple, so complicated.

Thank them in 2014 by voting them out.

governmentleech writes:

"PERIOD - END OF SENTENCE!" (Barrac Huesein Obama, some time ago)

Hopper writes:

All good comments, this debacle would be the perfect poster child for big government.

ms_reason writes:

What a complete disappointment. People voted for this man just to get the healthcare and the system was a failure.

No wonder Obama's approval rating is the lowest.

Vote smarter next time.

Cy writes:

I buy my own family health insurance through a broker. It is a good PPO plan. I pay $850 a month. I went to Covered California to see what options there were a while back. Somewhat comparable Gold and Platinum plans run $1,300 to $1,500 a month. What a joke!

OnTheOutside writes:

I would prefer my old PCIP plan from the California exchange site but I really don't have a choice now. But just think about this, under the old plan in some states "if you like not having a doctor, you can keep on not having a doctor" - John Stewart.

Outside of that, has there ever been a bigger flip flopper than this candidate?

Anti NAFTA before the election, pro free trade after,

Supports fines for those that do not buy healthcare, back pedals when it hurts votes.

Maybe a bigger flopper than Romney

kmgisme#256739 writes:

I am with you Cy. We are paying for all of the people that get the subsidies with double our rates. The people that get hurt the worst are middle classers with Individual Health Plans. Unbelievable.
If we don't stop the communists from taking over our country this will just get worse and worse. The general public has to develop some brains and common sense or we are doomed to third worls status.

ms_reason writes:

in response to kmgisme#256739:

I am with you Cy. We are paying for all of the people that get the subsidies with double our rates. The people that get hurt the worst are middle classers with Individual Health Plans. Unbelievable.
If we don't stop the communists from taking over our country this will just get worse and worse. The general public has to develop some brains and common sense or we are doomed to third worls status.

Unfortunately, there are more liberals in this State who believe that people like you and me should pay double for insurance to pay for others'. And unfortunately, the more uneducated you are, the better of Democrats are. They will target minorities and uneducated voters so they can sway them to voting for them. "If you vote for us, we will give you this....."
The old way of "working hard and earning your way" is out the window.

Unless for some reason people get smarter and look at the big picture (that Democrats will harm us more than do good), then maybe we have a chance.

FactsMatter writes:

Lots of right wingers. And as always lots and lots of fiction.

reachout writes:

Here's what really happened. The insurance companies ran the numbers and figured out how to eliminate the plans that cost them the most money. By offering customers a new plan in the lead up to the ACA, they were able to cancel coverage for anyone who moved to that new plan. The biggest flaw in the ACA is the trust it placed in the insurance companies. They didn't earn it and they will always disappoint. That's why single payer, a political D.O.A., is the better idea. In the meantime, kids up to age 26 can stay on a parent's plan, you can't be denied or priced out for a preexisting condition and the working poor get subsidized rates, hopefully taking them out of emergency rooms where they are currently getting their care on the taxpayer dime. That is something to be thankful for.

FactsMatter writes:

Obama said if you like your health plan you could keep it. Looks like he is doing the best he can to honor that comment.

No matter how stupid many people are to want to keep a policy with virtually 0 percent coverage for a serious health condition.

jjohnjj writes:

The AP calls this a "reversal", but that doesn't make it one.

The decision to grant exemptions to those who have been abandoned by their insurance companies is well within the letter of the law and the administration's discretion to make adjustments during the implementation.

The ACA has featured a "hardship exemption" to the individual mandate, right from the get-go. The guidelines for such exemptions were broadly-written specifically to give HHS the flexibility to respond to unexpected problems people might face.

Extending this exemption to the folks who got screwed by their insurers was a good move. Giving them access to the low-cost catastrophic policies reserved for young people was another good stop-gap measure, but it still leaves too many people under-insured.

The fundamental premise of insurance is based on you and I paying to mitigate someone else's misfortune. Always has been. Always will be.

This concept is pretty clear when we insure against things like house fires and dog bites. But it gets a little fuzzy with health insurance, because these policies pay for health maintenance as well as unexpected illness and injury.

Old people who don't want to pay for maternity benefits need to realize that somewhere there's a young woman who isn't happy about paying for their arthritis medications.

These folks are saying, in effect, "I just want to belong to an insurance pool that only includes people like me". Which is a lot like saying, "I want to live in a neighborhood that only includes people like me."

Piru_T writes:

in response to OnTheOutside:

I would prefer my old PCIP plan from the California exchange site but I really don't have a choice now. But just think about this, under the old plan in some states "if you like not having a doctor, you can keep on not having a doctor" - John Stewart.

Outside of that, has there ever been a bigger flip flopper than this candidate?

Anti NAFTA before the election, pro free trade after,

Supports fines for those that do not buy healthcare, back pedals when it hurts votes.

Maybe a bigger flopper than Romney

I usually agree with you, but to agree with John Stewards assessment of this is demonstrating the obsurd with the obsurd.

I see the disapproval of Obamacare in your post, I just do not think you grasp the seriousness or gravity of what is truly at stake and please correct me if I am wrong on that.

The problem has always been those who fall through the cracks, meaning the poor and lower social classes which was Obama's selling point was to cover the 30-40 million uninsured when estimates now are indicating that as many as 50 million will be uninsured after Obamacare takes full effect due to many employers deleting coverage forcing empowers into exchanges that either will not have openings or will be too expensive for them to afford.

What Obamacare does in fact do is create an even larger uninsured population by singling out those in the middle class that fall through the cracks by not making enough money or making too much depending on how you look at it.

So in otherwords if you dare make more than the $87,000 maixum you better skip that amount and add another $20K on top of that or your going to be one of those caught in Obamcare no man's land.

Romney might have been precieved as a flip flopper, but would have in my opinion done a great job in coalescing our fractured country and helping put aside the partisan politics we now are stuck with.

Piru_T writes:

in response to ms_reason:

What a complete disappointment. People voted for this man just to get the healthcare and the system was a failure.

No wonder Obama's approval rating is the lowest.

Vote smarter next time.

Very true, just remember who we are dealing with in the likes of JDubya, C2-9, the Mina's and of course the tricksters of shady politicking from the VCDCC and DA himself.

The question too needs to be how many times are we going to allow fool us.

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