During my morning treadmilling chore in front of the TV, I happened upon a CBS Morning Show story that so far companies that sold health insurance have cancelled over 2 million policies; and all because of the Patient Protection and Affordable Care Act (ACA). NBC news is carrying the story a step further. Their network news department is reporting that of those consumers who purchased their health insurance individually, some 50-75% can expect to receive cancellation notices within the next year. For insurers the impetus for these moves comes from 10 ACA minimum standards that insurers must meet. Here’s some of what that means, but this story has a surprise ending.
Here are those standards as listed under “Rights and Protections” at HealthCare.gov. These are the reasons some insurance companies are going into cancellation mode: Let’s start with the first consumer “right and protection” that’s supposedly driving the greedy money-mongering health insurers off the state Health Insurance Marketplace playing field.
The primary reason for this alleged mass insurance exodus is, of course, competition. The big boys don’t want any meaningful competition, because theoretically competition makes for “Affordable Care.” Hell, if I’m in a state with one or two companies vying for all the business, I wouldn’t want to compete with 6 or 7 or maybe even a dozen other companies that might offer better coverage and prices.
Here’s the 2nd deal breaker. ACA requires that insurance companies cover people with pre-existing health conditions. OMG! Insuring somebody that actually NEEDS health insurance? Sheer madness! Then there’s the third right; the question of understanding the coverage you’re getting. At health insurance marketplaces, you’ll have access to clear-headed and concise “Summaries of Benefits and Coverage” (SBC) handouts and a glossary of terms used in health care coverage and medical care. This helps you compare plans at the point of purchase. The best deal without distortions you might say.
The 4th protection for the consumer holds insurance companies accountable for rate increases. A novel albeit decades-late concept that might have prevented continued obscene and unjustified rate explosions for as long as I can remember. Right #5: It’s illegal for health insurance companies to arbitrarily cancel your health insurance just because you’re sick. Am I reading this correctly? I buy insurance to help me pay my hospital, drug and doctor bills when illness comes a callin’ and the very first act of pulling out that insurance card and pushing it across the front desk of the doctor’s office, hospital pay window or pharmacy gets me cancelled? So, in effect, a number of health insurance companies only want to keep you on the roster if you pay inflated prices for a service they never want to provide. Protecting against that practice is one of many beneficial aspects of ACA.
Pushing forward. Number 6 is somewhat controversial. It’s the assurance that ACA protects your choice of doctors. Teapublicans have been bemoaning the fact that the new program does the opposite; that people are being denied the right to hang on to their version of Dr. Quinn, Medicine Woman. If your company suddenly pulls up stakes or kicks you off their roster, you have to hope that your favorite doc is in the new insurers’ network. Unless it’s a fly-by- night outfit, chances are pretty good Dr. he or she is a network member. The practice of medicine is also a business after all.
A real plus in this segment is a visit to a non-network emergency room. You cannot be charged a higher co-pay or coinsurance price if your need for treatment after staggering into a light pole doesn’t happen within a handy distance of your regular hospital.
The 7th Protection and Right is coverage for young adults under 26. No mystery here; if you’re under 26, your covered by your parents plan (if it includes dependents) with the exception being that you’re already covered by an employer plan. Number 8 is going to be a huge money and life-saver. You get free preventive care under ACA. Basically you can be screened for blood pressure, Cholesterol and other lab work and tests to include mammograms, colonoscopies, vaccines, pediatric services and assorted preventive services for women.
For countless sufferers of money-draining acute and chronic illnesses, the number 9 protection is key. It ends lifetime and yearly dollar limits for essential health benefits including hospitalization, surgery, prescription drugs, mental health and substance abuse services and other areas that insurers have historically bailed out of once a certain dollar figure was reached.
Your last protection and right includes rate review and the 80/20 rule. A rate review forces insurance companies to justify any rate increase over 10%. Considering their historical premium rip-offs of consumers, that would have been a yearly chore for most companies. As I’ve indicated on this site before, small businesses named premium increases over the last 25 years as their greatest problem.
The 80/20 rule simply means that insurance companies will have to spend at least 80% of their premium money on health care and quality improvement activities as opposed to administrative, overhead and marketing costs. Medicare administrative costs are 2% (Congressional Budget Office), Heritage BS notwithstanding. Private insurers costs, upwards of 25%. Companies will have to rebate customers if they don’t meet that standard, either with a check or lowered premiums.
So there you have it. Some of the provisions are ‘grandfathered’ and don’t apply to plans purchased before March 23, 2010, so you’ll have to check. As for the hysterical hyperbole coming from the right and driven by enormously wealthy insurance companies that ruination of the industry is just around the corner, consider the take-home pay of UnitedHealth Group CEO Stephen J. Hemsley. Forbes magazine sets it at just under $50 million. And here’s a site I want you to visit about how much Blue Cross sucks out of a dirt-poor state. The article is nearly 2 ½ years old because, for the most part, Southern media is terrified of negative corporate stories for fear of lost advertising. I can assure you, the current numbers are even more disturbing.
You can expand your knowledge of everything I’ve written, here. You can trust these folks. And while you’re reading all about ACA, don’t despair that all insurance companies are going to abandon ACA. Ain’t happening! Yes, they’re busy raising pre-exchange premiums and pruning out the dead ‘er sick wood, but they’re not going anywhere. Why aren’t they?
For that answer look up ‘Liz Fowler’ in your spare time or contact your nearest stockbroker.
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