Health law may cancel some existing insurance policies
by Ricardo Alonso-Zaldivar, Associated Press
May 30, 2013 12:23 AM | 1808 views | 5 5 comments | 8 8 recommendations | email to a friend | print
WASHINGTON — Many people who buy their own health insurance could get surprises in the mail this fall: cancellation notices because their current policies aren’t up to the basic standards of President Barack Obama’s health care law.

They, and some small businesses, will have to find replacement plans — and that has some state insurance officials worried about consumer confusion.

Rollout of the Affordable Care Act is going full speed ahead, despite repeal efforts by congressional Republicans. New insurance markets called exchanges are to open in every state this fall. Middle-class consumers who don’t get coverage on the job will be able to pick private health plans, while low-income people will be steered to an expanded version of Medicaid in states that accept it.

The goal is to cover most of the nation’s almost 50 million uninsured, but even Obama says there will be bumps in the road. And discontinued insurance plans could be another bump.

Also, it doesn’t seem to square with one of the president’s best known promises about his health care overhaul: “If you like your health care plan, you’ll be able to keep your health care plan.”

But supporters of the overhaul are betting that consumers won’t object once they realize the coverage they will get under the new law is superior to current bare-bones insurance. For example, insurers will no longer be able to turn people down because of medical problems.

Other bumps on the road to the new health care law include potentially unaffordable premiums for smokers unless states act to waive them, a new $63-per-head fee that will hit companies already providing coverage to employees and dependents, and a long-term care insurance program that had to be canceled because of the risk it could go belly up.

The Obama administration did not respond directly to questions about the potential fallout from cancellation notices. Instead, Health and Human Services spokeswoman Joanne Peters released a prepared statement saying: “Beginning in October, individuals and small businesses will be able to shop for insurance in the marketplace, where we are already seeing that increased competition and transparency are leading to a range of options for quality, affordable plans.”

For the most part, state insurance commissioners are giving insurers the option of canceling existing plans or changing them to comply with new federal requirements. Large employer plans that cover most workers and their families are unlikely to be affected.

Seen as consumer safeguards by the administration, the new requirements limit costs paid by policyholders, and also expand benefits. That includes better preventive care, and also improved prescription coverage in many cases. The most important feature may be protection for your pocketbook if you get really sick: The new plans limit copayments and other out-of-pocket costs to $6,400 a year for individuals.

The National Association of Insurance Commissioners says it is hearing that many carriers will cancel policies and issue new ones because administratively that is easier than changing existing plans.

About 14 million Americans currently purchase their health policies individually, a number expected to more than double eventually because of the new law’s subsidies and one-stop insurance markets. But the transition may not be seamless.

“The impending changes ... have the potential to cause policyholder confusion,” said a recent memo from Iowa Insurance Commissioner Nick Gerhart to insurers. Though a Republican-led state, Iowa is helping to carry out major portions of the health care law.

Nationally a considerable number of people could be affected by cancellations. Information from insurers is still dribbling in to state regulators.

In Washington state, the changes will affect more than 400,000 people, said Stephanie Marquis, spokeswoman for insurance commissioner Mike Kreidler. Marquis said she expects the premiums for replacement plans to be similar to current ones, but with better coverage.

“Your costs involve more than your premiums,” Marquis explained. “It’s also what you would have to pay out of pocket if you had actually used your health plan.”
Comments
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Good bye Good times
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May 30, 2013
Thanks to Obama the American dream has become a

nightmare.
D.G. in Clarkdale
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May 30, 2013
There is an Op/ Ed piece @ Forbes titled "Obamacare's Slush Fund Fuels A Broader Lobbying Controversy". The disaster called Obamacare(sic) will be far reaching and terrible in its failure to improve healthcare.
D.G. in Clarkdale
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May 30, 2013
The "Affordable Care Act" is a big lie, the fact is this law was NEVER meant to succeed but fail. I've long asserted that the implementation burden and cost will prove to be so large that the "Progressives" aka Liberal Democrats who'll stand back after creating the failure and scream that they were right after all about a single payer system, making the people desperate for a fix. Our freedom of choice is being eroded at ever level by those who "think"(sic) they know whats good for us at every level of government, be it city, state or federal. Don't be fooled because its not about caring, its about control and power of government over every aspect of our lives from birth to grave....provided one makes it out of the womb.

Its going to get bad, very bad.
screwed by OBAMACARE
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May 30, 2013
Quote from your aaticle "and a long-term care insurance program that had to be canceled because of the risk it could go belly up"

My company just sent out notices saying that the insurance carrier we had for LTC will no longer provide the insurance.

Yep, OBAMACARE supporters, hope you will be happy with what you get.
melanieb.
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May 30, 2013
I have already lost my doctor that I have had for YEARS due to Obama's health care horror. What is even more scary is what are we going to left with as far as doctors? I am afraid we are going to get what we pay for & it is not going to be good. I think we are going to have shotty, second rate doctors who have no business in the health care profession. It will make people no go to the doctor.
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