Making the rounds in news coverage of the Affordable Care Act this week is talk of the growing number of Americans receiving notification that their health insurance plans have been canceled. A result of the ACA’s requirement that health plans offer a certain amount of essential health benefits, White House Press Secretary Jay Carney calls such canceled plans “substandard policies that don’t provide minimum services.”
However, several members of the Employee Benefit Adviser group on LinkedIn disagree with this premise.
“Personally, I find that they are not substandard plans, but plans that perhaps don't meet the Obama administration's idea of better,” says Betsy Sullivan, owner of Betsy A. Sullivan Inc., a San Francisco-area brokerage, referring specifically to individual plans. “I am seeing clients getting hit with higher deductibles, out of pockets and reduced networks at higher rates. I am not referring to basic stripped down plans either, but those with full major medical coverage that cover doctor visits, preventive care and complete Rx coverage.”
In North Carolina, it’s not cancellation letters that are going out from the carriers, but rather rate increases, says Davidson Neville, president, Triangle Insurance & Benefits, Inc. “Blue Cross and Blue Shield [of North Carolina] is not sending out cancellation letters; rather the rates are increasing to the point that ‘individual’ clients are considering cancelling the coverage,” he says.
For example, he explains how clients of his, a couple who had been paying $177 a month in premiums for a plan with a $10,000 deductible will, beginning Jan. 1, 2014, be paying around $908 a month in premiums now that the plan must comply with the ACA’s $6,350 per-person max.
Health care reform “limits client choices,” Neville continues, “and because this plan was purchased after March 23, 2010, it is not grandfathered. Thus, my clients cannot keep the plan they like (at a more affordable price). President Obama said they could keep their plan — that's not the case. And ‘Affordable’ — not for these clients!”
All of Michael King’s small-group clients in New York with Jan. 1, 2014 renewals will have new plan designs and rates. “Most insurance companies are mapping them over to a like plan that is compliant,” says the owner of Century Benefits Group, Inc., in Rochester. “As always, there will be winners (lower cost) and losers (higher cost) when this happens. We will have both.”
However, King says letters sent to clients informing them that they are losing their coverage are “not really” confusing.“The plan design and rates are changing. But all of our clients are asking questions, and a lot of time is spent on explaining what the heck is going on. Most have no clue, except the sound bites on the news. But they are now finding out now how this law will effective them, and most do not like it!”
Obama to blame
Other comments on the LinkedIn discussion centered on President Barack Obama’s promise that people who like their plans will be able to keep them.
“When someone says, ‘If you like your doctor you can keep him/her,’ or ‘If you like your plan you can keep it,’ I understand that to mean if I like it (plan and/or doctor) I keep it,” says Allan S. Oxman, managing principal at First Financial Resources in Charlotte, N.C. “Now we are being told, ‘That's not what was meant.’ I must be missing something!”
George Thomas, vice president at National Benefit Partners in Los Angeles, goes as far as to accuse the president of lying: “We sat back and let the government design, price and force their health care plan on us and now we find that our President lied to us on all three counts: keeping your plan, your doctor and low insurance premiums.”
Editor’s note: Comments have been edited for grammar and spelling. To participate in the discussion, visit LinkedIn, and then search under groups for Employee Benefit Adviser.
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