“When In Doubt, Go Shopping”: The Affordable Care Act Puts People, Not Insurers, First
It’s pretty straightforward: A major reason we have 50 million uninsured people in the United States is that insurance companies do not see individuals as a profitable market.
The recent uproar over canceled health insurance plans not only highlights the insurance industry’s out-of-hand dismissal of this market, but also reinforces why there is a need for the new health reforms under the Affordable Care Act .
Consumers have reason to be angry but they should be angry at the insurers, not the health care law. Connecticut’s Insurance Commissioner, Thomas B. Leonardi, announced Monday that of the approximate 27,000 insurance policy cancellation notices which have gone out only 9,000 of them were because plans were not in compliance with the health care law. The new law forbids insurers to deny or drop coverage when people get sick or have a pre-existing condition such as hypertension, diabetes or obesity. Consumers will gain those protections in 2014 whether they buy through the insurance exchange called Access Health CT or on their own.
Mr. Leonardi’s comments highlight the fact that it has been a customary practice of insurers to send their policyholders notifications that a particular plan will no longer be available or there’s been a change in benefits. Only one-third of the policies being canceled in Connecticut were plans that did not have protection under the law’s grandfather clause and did not meet the benefit standards or the consumer protections required by the law. The other two-thirds were discontinued as part of the insurance companies’ business-as-usual practices.
Historically, the health insurance industry has made its fortune by denying coverage to sick people, decreasing benefits and jacking up prices. Insurers do not see the individual market as profitable unless they continue to shift risk onto consumers through high deductible plans and unless they can raise rates on their customers as they age and develop health problems to the point they can no longer afford health insurance. That’s why they’re getting out. The Affordable Care Act is stopping this bait and switch approach.
Understandably, the cancellation notices came as a jolt for policyholders, especially because the reasons behind them were not made clear. Furthermore, insurers failed to do the right thing and inform their policyholders that other coverage options are now available to them under the new health care law.
Fortunately for consumers though, President Barack Obama‘s decision to give insurance companies another year to continue their substandard health plans carried the proviso that they must inform their customers of the new coverage opportunities under the health care law.
It’s too bad the commotion over the cancellations happened to coincide with the rocky rollout of the new health insurance exchange website. But consumers would do well to keep their eyes on the big picture, beyond the political grandstanding and partisan bickering. Websites can be fixed. Health care reform is about improving the quality of coverage benefits and offering more choice and affordability through the health insurance exchanges. That’s what Connecticut is trying to do.
Friday’s announcement by Gov. Dannel P. Malloy that the state would not extend poor quality policies through 2014 re-emphasizes Connecticut’s commitment to making sure its residents have access to plans that will provide quality comprehensive care. The state also announced that it was pushing back the date people had to sign up by for coverage that begins Jan. 1. Now residents have until Dec. 22, giving them an additional week to weigh the options on Access Health CT, the state’s health insurance exchange, and to find a plan that fits their families’ needs.
According to Access Health CT, in the first month, more than 300,000 Connecticut consumers checked out their options on the Website, almost 40,000 calls have been answered through the call center and more than 13,000 Connecticut residents are now enrolled.
Clearly, consumers here are getting the message: When in doubt, go shopping.
By: Frances G. Padilla, President of Universal Health Care Foundation of Connecticut, Op-Ed Columnist, The Hartford Courant, November 22, 2013
“Stupid Obamacare!”: Profit Maximizing Private Insurance Companies Got You Down, Blame Obama
It has been said many times over the last few years that now that Democrats successfully passed a comprehensive overhaul of American health insurance, they own the health-care system, for good or ill. Every problem anyone has with health care will be blamed on Barack Obama, whether his reform had anything to do with it or not. Your kid got strep throat? It’s Obama’s fault! Doctor left a sponge in your chest cavity? Stupid Obama! Grandma died after a long illness at the age of 97? Damn you, Obama!
OK, so maybe it won’t be quite as bad as that, but pretty close. Here’s an instructive case in exactly how this plays out. Take a look at this article that ran in yesterday’s Washington Post, telling how in order to keep premiums down and attract customers, some insurers are limiting their networks. “As Americans have begun shopping for health plans on the insurance exchanges,” the article tells us, “they are discovering that insurers are restricting their choice of doctors and hospitals in order to keep costs low, and that many of the plans exclude top-rated hospitals.”
So insurance companies—private actors seeking to maximize profit—are making decisions that some potential customers find less than perfectly appealing. The article itself is clear about why this is happening, but in the newspaper’s print edition, the subtitle read, “Exchanges Exclude Doctors, Hospitals.” Of course, that’s completely false. The exchanges haven’t excluded any doctors and hospitals, the insurance companies offering plans on the exchanges have made a decision to exclude them. The insurance companies are perfectly free to make a different decision, but they’ve decided not to.
So the newspaper runs this story, with the headline writers mistakenly portraying what for some small number of people is an unwelcome development as a decision made by the Obama administration. Conservatives will then take articles like this and others like it, and say, “See? Obama said you could keep your doctor! He lied! This law is a disaster!” Barack Obama never said that he’d forbid any insurance company from ever changing anyone’s policy or offering policies that provide something less than spectacularly gold-plated coverage at absurdly low prices. But now, every profit-maximizing decision by a corporation becomes Barack Obama’s fault.
The second component of Barack Obama coming to own all the problems with the health-care system is that with the rollout of the ACA, you suddenly have a lot of political reporters doing stories on health care, and many of them have only the thinnest understanding of the law. That limited understanding makes it easier for them to just focus on whatever negative things are happening in health care, blaming them on the ACA, and assuring themselves that they’ve been appropriately “tough” in their reporting.
There’s nothing wrong with reporters fully exploring all the changes our ever-evolving health-care system goes through, so long as they do it accurately. But you might notice that they are completely uninterested in the stories of people who are being helped by the Affordable Care Act. Harold Pollack estimates that there are over 10 million uninsured Americans who have significant medical issues like a cancer diagnosis or diabetes, and thus find it difficult or impossible to get insurance on the individual market under the pre-ACA system. These people will now be able to get reasonably priced insurance, which for many will be literally life-saving. But journalists find these people boring and not worth talking about. They’re much more interested in people who find something problematic in the new system, and they’re working hard to find every last one of those people’s stories and share them with the country. And that’s how Barack Obama ends up owning the health-care system.
By: Paul Waldman, Contributing Editor, The American Prospect, November 22, 2013
“Blaming Obamacare Is A Smokescreen”: Sorting Out The Real Reasons Why Insurers Cancel Health Insurance Policies
Now that President Obama has said it’s OK with him if insurance companies keep their policyholders in health plans that don’t meet the standards established by the Affordable Care Act, at least for another year, the big question is whether insurers will take him up on the offer.
The answer: it depends.
Some insurance executives will view the offer as one they can’t turn down. Even though Karen Ignagni, president of America’s Health Insurance Plans, the industry’s big PR and lobbying group, had nothing good to say about Obama’s proposal, keep in mind that she doesn’t run an insurance company. While industry executives look to her to comment on what politicians do, they make their own decisions when it comes to their companies’ bottom lines.
Here’s what Ignagni was quoted as saying in a FOX News story Friday:
“The only reason consumers are getting notices about their current coverage changing is because the ACA (Affordable Care Act) requires all polices to cover a broad range of benefits that go beyond what many people choose to purchase today.”
Not so fast. There are other reasons some folks are being told they’ll have to change health plans next year. Many of them are having to switch plans not because of Obamacare but because their insurance companies want to move them into policies with higher profit margins.
Insurance companies have been sending similar notices to their customers for years. My son Alex — and thousands of other customers of a Blue Cross plan in Pennsylvania — got such a notice four years ago, months before Congress passed the health reform law.
Why? The insurer wanted to move those policyholders out of a plan with a reasonable $500 annual deductible and into one with a deductible ten times that amount. To accomplish that, Blue Cross notified its policyholders that their health plan would not be available in 2010. Their options were to switch to the high-deductible policy, which would still cost them a couple of dollars more each month, or to another plan with that reasonable $500 deductible. If they chose the latter, their monthly premiums would increase 65 percent.
Notices like the one Alex got have provided a mechanism for insurers to implement a years-long industry strategy of shifting more and more of the cost of medical care to their policyholders. And that strategy will continue until every last one of us is in a high-deductible plan.
Some of you are likely old enough to remember the days before managed care when almost all Americans with private health insurance were in indemnity plans. In an old-fashioned indemnity plan, the insurer didn’t constrain us in a limited network of doctors and hospitals and didn’t call the shots about whether a knee replacement or liver transplant your doctor recommended was really necessary.
Those days are long gone. Everybody eventually got notices that those plans were being discontinued. They were replaced by HMOs and PPOs with limited provider networks and armies of utilization review nurses and medical directors who decided if you would get coverage for your new knee or new liver.
In most cases, it was our employers who killed off the indemnity plans in favor of managed care. But eventually, HMOs and PPOs also fell out of favor. The managed care backlash of the late 1990s forced insurers to abandon some of their utilization review practices and to add more doctors and hospitals to their skinny networks. That led to shrinking profit margins — and to the latest silver bullet from the insurance industry: high-deductible plans.
Before Obama signed the Affordable Care Act, insurance companies already were making rapid progress in implementing their business plans of “migrating” their customers from traditional managed care plans to so-called “consumer-directed” plans, the industry euphemism for high-deductible policies. At the same time they’ve been requiring us to pay more out of our own pockets for care, they’ve also been implementing a strategy of reducing benefits. Investors and Wall Street financial analysts refer to these common industry practices as “benefit buydowns.” That’s another euphemism, by the way.
I myself — and thousands of my fellow Cigna employees — were notified several years ago, long before I left my job, that our HMOs and PPOs were being discontinued. Yep, we got notices in the mail. If we wanted to stay in a Cigna-subsidized health plan, we would have to switch to a high-deductible plan. The same thing has happened to tens of millions of other Americans in recent years.
Yet if you relied on the Washington media for your news and information about health care, you’d think that insurance companies would never have considered sending policy discontinuation notices to their policyholders until forced to do so by Obamacare.
The truth: they have always done this when profits were at stake.
Which is why some insurers will be happy as clams to be able to keep their policyholders in plans that don’t meet the ACA’s standards. Many of those plans — especially the junk insurance plans many folks are in — are exceedingly profitable.
For people who are in those plans who have complained about their discontinuation notices, I hope they will shop around. Chances are, they’ll be able to get much better coverage at a better price. Thanks to the Affordable Care Act.
By: Wendell Potter, The Center for Public Integrity, November 18, 2013
“Why Isn’t Everyone More Worried About Me?”: Maybe The Most Ridiculous Obamacare “Victim” Story Yet
Apparently, there was a meeting of the editors at The New York Times op-ed page in which someone said, “You know how every time someone does a story about one of these Obamacare ‘victims’ whose insurance companies are cancelling their plans, it turns out they could do really well on the exchange, but no one bothers to check? We should get one of them to write an op-ed, but not bother to ask what options they’ll have.” And then someone else responded, “Right, don’t bother with the fact-checking. But we need a new twist. What if we find someone who’ll complain that the problem with Obamacare is that other people care too much about poor people and the uninsured, while what they ought to be doing is spending more time liking her Facebook post about her possibly increased premiums?” The editors looked at each other and said, “That’s gold. Gold!”
And this was the result. Written by Lori Gottlieb, a Los Angeles psychotherapist and author, it relates how she got a cancellation letter from Anthem Blue Cross and was offered a plan for $5,400 more a year, then had a frustrating phone call with the company. Did she go to the California health exchange and find out what sorts of deals would be available to her? Apparently not. She took Anthem at their word—you can always trust insurance companies, after all!—then took to Facebook, where she “vented about the call and wrote that the president should be protecting the middle class, not making our lives substantially harder.”
And here’s where our story takes a shocking turn. Instead of expressing what she felt was the appropriate sympathy, those 1,037 people on Facebook she thought were her friends but turned out just to be “friends” had the nerve to point out that the Affordable Care Act will help millions of previously uninsured and uninsurable people get coverage. Gottlieb was disgusted with these people she termed the “smug insureds.” And none of them even “liked” her post!
Like Bridget Jones’s “smug marrieds,” the “smug insureds” — friends who were covered through their own or spouses’ employers or who were grandfathered into their plans — asked why I didn’t “just” switch all of our long-term doctors, suck it up and pay an extra $200 a month for a restrictive network on the exchange, or marry the guy I’m dating. How romantic: “I didn’t marry you just to save money, honey. I married you for your provider network.”
Along with the smug insureds, President Obama doesn’t care much about the relatively small percentage of us with canceled coverage and no viable replacement. He keeps apologizing while maintaining that it’s for the good of the country, a vast improvement “over all.”
And the “over all” might agree. But the self-employed middle class is being sacrificed at the altar of politically correct rhetoric, with nobody helping to ensure our health, fiscal or otherwise, because it’s trendy to cheer for the underdog. Embracing the noble cause is all very well — as long as yours isn’t the “fortunate” family that loses its access to comprehensive, affordable health care while the rest of the nation gets it.
The truly noble act here is being performed by my friend Nicole, who keeps posting Obamacare fiasco stories on my Facebook page, despite being conspicuously ignored, except for my single “like.” It’s the lone “like” that falls in the forest, the click nobody wants to hear.
How terribly smug, to think that the fate of millions of poor people who will now get insurance is as important as the suffering of this one person who might have to pay more for comprehensive coverage, and also happens to have access to The New York Times where she can air her grievances! If only it weren’t so “trendy to cheer for the underdog.”
It’s one thing to feel your own problems more acutely than those of other people, even millions of other people, even many whose problems make yours look trivial by comparison. We all do that, and we could barely function if we didn’t. It’s quite another thing to expect that other people will see your problems as more important than those of millions. I sprained my ankle a few weeks ago, and I’ll admit that in the time since I’ve given more thought to my ankle’s recovery than I have to the 660,000 people who die every year from malaria. But if I asked you why you aren’t thinking more about my ankle than you are about malaria, you’d wonder if it was my brain that I had sprained.
I imagine that after her disappointment at the response to her Facebook post, Gottlieb will be even more disappointed with the response to her op-ed explaining her disappointment with the response to her Facebook post. So if she wants to feel better, the first thing she ought to do is go to the exchange and she what her options are. There’s almost certainly something better than the plan her insurance company is trying to get her to buy. And then she can go to Facebook and ask her “friends” to celebrate her good fortune.
By: Paul Waldman, Contributing Editor, The American Prospect, November 11, 2013
“A Market Of Systematic Discrimination”: President Obama Shouldn’t Apologize For Blowing Up The Terrible Individual Market
Last night, NBC’s Chuck Todd asked President Obama about the people losing their health insurance despite his promise that “anyone who likes their plan can keep it.” (See the video and read the transcript here.)
“I am sorry that they are finding themselves in this situation based on assurances they got from me,” Obama replied.
The answer is a bit of a dodge. People aren’t finding themselves in this situation based on the president’s promises. They’re finding themselves in this situation based on his policy. And Obama isn’t apologizing for the policy.
“Before the law was passed, a lot of these plans, people thought they had insurance coverage,” he said. “And then they’d find out that they had huge out of pocket expenses. Or women were being charged more than men. If you had preexisting conditions, you just couldn’t get it at all.”
Obama was wrong to promise that everyone who liked their insurance could keep it. For a small minority of Americans, that flatly isn’t true. But the real sin would’ve been leaving the individual insurance market alone.
The individual market — which serves five percent of the population, and which is where the disruptions are happening — is a horror show. It’s a market where healthy people benefit from systematic discrimination against the sick, where young people benefit from systematic discrimination against the old, where men benefit from systematic discrimination against women, and where insurers benefit from systematic discrimination against the uninformed.
The result, all too often, is a market where the people who need insurance most can’t get it, and the people who do get insurance find it doesn’t cover them when it’s most necessary. All that is why the individual market shows much lower levels of satisfaction than, well, every other insurance market:
(Graph by Jon Cohn)
Those numbers, of course, don’t include the people who couldn’t get insurance because they were deemed too sick. Consumer Reports put it unusually bluntly:
Individual insurance is a nightmare for consumers: more costly than the equivalent job-based coverage, and for those in less-than-perfect health, unaffordable at best and unavailable at worst. Moreover, the lack of effective consumer protections in most states allows insurers to sell plans with ‘affordable’ premiums whose skimpy coverage can leave people who get very sick with the added burden of ruinous medical debt.
Jonathan Cohn puts a human face on it:
One from my files was about a South Floridian mother of two named Jacqueline Reuss. She had what she thought was a comprehensive policy, but it didn’t cover the tests her doctors ordered when they found a growth and feared it was ovarian cancer. The reason? Her insurer decided, belatedly, that a previous episode of “dysfunctional uterine bleeding”—basically, an irregular menstrual period—was a pre-existing condition that disqualified her from coverage for future gynecological problems. She was fine medically. The growth was benign. But she had a $15,000 bill (on top of her other medical expenses) and no way to get new insurance.
This is a market that desperately needs to be fixed. And Obamacare goes a way toward fixing it. It basically makes the individual market more like the group markets. That means that the sick don’t get charged more than the well, and the old aren’t charged more than three times as much as the young, and women aren’t charged more than men, and insurance plans that don’t actually cover you when you get sick no longer exist. But the transition disrupts today’s arrangements.
(Interestingly, recent Republican plans have focused on disrupting the employer market by ending, limiting, or restructuring the tax exclusion for employer-based plans. There’s an extremely good case to be made that that needs to be done, but it means much more disruption for a much larger number of people. Obamacare’s focus on disrupting the individual market — and only the individual market — is a more modest approach to health-care reform.)
There’s been an outpouring of sympathy for the people in the individual market who will see their plans changed. As well there should be. Some of them will be better off, but some won’t be.
But, worryingly, the impassioned defense of the beneficiaries of the status quo isn’t leavened with sympathy for the people suffering now. The people who can’t buy health insurance for any price, or can’t get it at a price they can afford, or do get it only to find themselves bankrupted by medical expenses anyway have been left out of the sudden outpouring of concern.
If people have a better way to fix the individual market — one that has no losers — then it’s time for them to propose it. But it’s very strange to sympathize with the people who’ve benefited from the noxious practices of the individual market while dismissing the sick people who’ve been victimized by it.
Obama is rightly taking flack for making a promise he wasn’t going to keep, and he’s right to apologize for it. But he shouldn’t apologize for blowing up the individual market. It needed to be done.
By: Ezra Klein and Evan Soltas, WonkBook, The Washington Post, November
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