Time to Investigate Those Insurance Company Letters

As a follow-up to this post, I want to talk about the thing that spawns some of these phony Obamacare victim stories: the letters that insurers are sending to people in the individual market. People all over the country are getting these letters, which say "We're cancelling your current policy because of the new health-care law. Here's another policy you can get for much more money." Reporters are doing stories about these people and their terrifying letters without bothering to check what other insurance options are available to them.

There's something fishy going on here, not just from the reporters, but from the insurance companies. It's time somebody did a detailed investigation of these letters to find out just what they're telling their customers. Because they could have told them, "As a result of the new health-care law, your plan, StrawberryCare, has now been changed to include more benefits. The premium is going up, just as your premium has gone up every year since forever." But instead, they're just eliminating those plans entirely and offering people new plans. If the woman I discussed from that NBC story is any indication, what the insurance company is offering is something much more expensive, even though they might have something cheaper available. They may be taking the opportunity to try to shunt people into higher-priced plans. It's as though you get a letter from your car dealer saying, "That 2010 Toyota Corolla you're leasing has been recalled. We can supply you with a Toyota Avalon for twice the price." They're not telling you that you can also get a 2013 Toyota Corolla for something like what you're paying now.

I'm not sure that's what's happening, and it may be happening only with some insurers but not others. But with hundreds of thousands of these letters going out and frightening people into thinking they have no choice but to sign up for a much more expensive plan, it's definitely something someone should look into. Like, say, giant news organizations with lots of money and resources.

Now, it should be said that when President Obama said during the debate over the Affordable Care Act in Congress that if you like your health coverage you can keep it, he was only half right. The reason he repeated it so many times was that he and his advisors firmly believed that one of the main reasons Bill Clinton's health-care reform failed was that it changed things too much for too many, and people fear change. In Clinton's plan, pretty much everybody not on Medicare or Medicaid would have had to go into a new insurance plan. That those plans might be better than what they had didn't matter; the idea frightened people. So the Obama administration took pains to emphasize that the government would not require anyone to change their insurance. That didn't mean they were guaranteeing that no insurance company would ever make changes to anyone's plan, because insurance companies do that all the time. But the law wouldn't mandate that, say, you leave Aetna and join Blue Cross.

The more complex reality is that because the law imposed new requirements on insurers for what they have to cover and what they can charge, the insurers were inevitably going to make changes to their existing plans in response. And yes, that means many people's insurance is going to change. In most cases it will change for the better, and the effect all this is going to have on premiums is yet to be seen. But it sure looks like insurance companies are trying to make sure anyone who's displeased aims their ire at the government, and if they can get people to buy a more expensive product along the way, they'll be happy to do that.

Comments

Seven years ago I purchased a $5500 deductible HSA from Anthem for $65/month. Now at 31, my premium is $92/month. As my income increased, I had planned to continually increase my deductible to keep the premiums lower. Last week I received a letter from Anthem that my plan would no longer be available after December 2014. I liked my plan, and I wanted to keep it.

Our household income is just over the line of being eligible for a subsidy, so a similar (i.e silver) plan on the exchange will cost me $310/month. Sure the copays for the doctor are a better deal than the HSA, but the out of pocket limit is higher than my current plan, and the premium increase is outrageous. This is not a better deal for me by any stretch.

To argue that this is a better deal for me is absurd. I believed the President's promise, and he burned me. This law is going to pull down the entire party unless people start accepting fault and trying to fix it. Articles like this only keep the delusion alive that all is well. The American people are learning otherwise and our side is losing credibility by the day. For the sake of our cause we need to change course immediately so that we can be part of the reform.

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