No doubt, those canceled policyholders recall President Obama’s oft-repeated pledge: “If you like your insurance plan you will keep it. No one will be able to take that away from you.” But the truth is, insurance companies are canceling policies of people who want to keep them.
Florida’s largest carrier, Florida Blue, is terminating about 300,000 policies comprising 80 percent of its individual policies, reports Kaiser Health News (not associated with the insurance company). Kaiser Permanente in California is canceling coverage for 160,000 policyholders. Blue Shield of California is dropping about 119,000 policyholders, or about 60 percent of its individual customers. A Pittsburgh insurer is canceling about 20 percent of its individual policies, while another is canceling about 45 percent.
And the list will grow, because an estimated 14 million Americans buy their own coverage since they are not insured by an employer. The big problem is that the new health law mandates that individual policies cover no less than 10 “essential” benefits ranging from prescription drugs to maternity care for everyone. Plus the “affordable” act requires that policies must limit annual expenses of policyholders to less than what many pre-Obamacare plans provide.
Take the case of Natalie Willes of Los Angeles, who earns her living helping parents train babies to sleep. She told CBS News, “I was completely happy with the insurance I had before.” She had a $1,500 deductible and paid $199 a month. Under Obamacare, she said, “The most similar plan that I would have available to me would be $278 a month. My deductible would be $6,500 dollars and all of my care after that point would only be covered 70 percent.”
Another example of Obamacare in action: Kris Malean, 56, of the Seattle area. Her $390-a-month policy has a $2,500 deductible and up to $10,000 in potential costs she would have to pay for doctor visits, prescriptions or hospital care, Kaiser Health News reported. The new policy offered by her insurer costs $469 a month with a $5,000 deductible and caps her potential out-of-pocket costs at $6,250 a year including the deductible. She said she had thought “there would be a lot more choice, driving some of the rates down.” Likewise for Jeff Learned, a Los Angeles television editor. He told Kaiser Health, “I don’t feel like I need to change but I have to.”
The reality is: You can’t keep your plan if it’s not Obamacare-compliant. It comes down to doing the math, says Patrick Johnson, CEO of California Association of Health Plans. The costs of insuring everybody will have to be spread out, he said. That means some consumers will pay less but others will have to pay more — “no matter what people in Washington say.”
Just wait for the rest of the Obamaberg to emerge.