Americans with own their health plans shocked at Obamacare prices as insurance companies send out cancellation letters

  • Millions of people with  individual  insurance policies are receiving notices that the plans are being discontinued 
  • It’s because they don’t meet the higher  benefit requirements of the new law
  • They can buy different policies directly  from insurers for 2014 or sign up for plans on state insurance exchanges 
  • Dean and Mary Lou Griffin, of Chadds  Ford, Pennsylvania, always bought individual insurance policies, but will now  have to pay much more
  • Many states require insurers to give  consumers 90 days’ notice before canceling plans
  • Because of the higher cost, some people  consider paying federal penalty – about $100 or 1 per cent  of income next year 

By  Daily Mail Reporter

PUBLISHED: 20:13 EST, 2  November 2013 |  UPDATED: 06:51 EST, 3 November 2013

Dean Griffin liked the health insurance he  purchased for himself and his wife three years ago and thought he’d be able to  keep the plan even after the federal Affordable Care Act took  effect.

But the 64-year-old recently received a  letter notifying him the plan was being canceled because it didn’t cover certain  benefits required under the law.

The Griffins, who live near Philadelphia, pay  $770 monthly for their soon-to-be-terminated health care plan with a $2,500  deductible.

Cancelled: Dean and Mary Lou Griffin, of Chadds Ford, Pennsylvania, are among millions of people nationwide who buy individual insurance policies and are receiving notices that those policies are being discontinuedCancelled: Dean and Mary Lou Griffin, of Chadds Ford,  Pennsylvania, are among millions of people nationwide who buy individual  insurance policies and are receiving notices that those policies are being  discontinued

 

The cheapest plan they found on their state  insurance exchange was a so-called bronze plan charging a $1,275 monthly premium  with deductibles totaling $12,700.

It covers only providers in Pennsylvania, so  the couple, who live near Delaware, won’t be able to see doctors they’ve used  for more than a decade.

‘We’re buying insurance that we will never  use and can’t possibly ever benefit from. We’re basically passing on a benefit  to other people who are not otherwise able to buy basic insurance,’ said  Griffin, who is retired from running an information technology  company.

More…

 

The Griffins are among millions of people  nationwide who buy individual insurance policies and are receiving notices that  those policies are being discontinued because they don’t meet the higher benefit  requirements of the new law.

They can buy different policies directly from  insurers for 2014 or sign up for plans on state insurance exchanges.

While lower-income people could see lower  costs because of government subsidies, many in the middle class may get rude  awakenings when they access the websites and realize they’ll have to pay  significantly more.

Frustrated: The plan they found on their state insurance exchange only covers providers in Pennsylvania, so the couple, who live near Delaware, won't be able to see doctors they've used for more than a decadeFrustrated: The plan they found on their state insurance  exchange only covers providers in Pennsylvania, so the couple, who live near  Delaware, won’t be able to see doctors they’ve used for more than a  decade

 

Those not eligible for subsidies generally  receive more comprehensive coverage than they had under their  soon-to-be-canceled policies, but they’ll have to pay a lot more.

Because of the higher cost, the Griffins are  considering paying the federal penalty – about $100 or 1 per cent of income next  year – rather than buying health insurance. They say they are healthy and don’t  typically run up large health care costs.

Dean Griffin said that will be cheaper  because it’s unlikely they will get past the nearly $13,000 deductible for the  coverage to kick in.

Individual health insurance policies are  being canceled because the Affordable Care Act requires plans to cover certain  benefits, such as maternity care, hospital visits and mental illness. The law  also caps annual out-of-pocket costs consumers will pay each  year.

In the past, consumers could get relatively  inexpensive, bare-bones coverage, but those plans will no longer be available.  Many consumers are frustrated by what they call forced upgrades as they’re  pushed into plans with coverage options they don’t necessarily  want.

Ken Davis, who manages a fast food restaurant  in Austin, Texas, is recovering from sticker shock after the small-business  policy offered by his employer was canceled for the same reasons individual  policies are being discontinued.

His company pays about $100 monthly for his  basic health plan. He said he’ll now have to pay $600 monthly for a mid-tier  silver plan on the state exchange.

The family policy also covers his 8-year-old  son.

'Forced upgrades: Many say they feel forced into taking plans through the Obamacare website which they don't need‘Forced upgrades: Many say they feel forced into taking  plans through the Obamacare website that they don’t need

 

Even though the federal government is  contributing a $500 subsidy, he said the $600 he’s left to pay is too high. He’s  considering the penalty.

‘I feel like they’re forcing me to do  something that I don’t want to do or need to do,’ Davis, 40,  said.

Owners of canceled policies have a few  options. They can stay in the same plan for the same price for one more year if  they have one of the few plans that were grandfathered in.

They can buy a similar plan with upgraded  benefits that meets the new standards – likely at a significant cost increase.  Or, if they make less than $45,960 for a single adult or $94,200 for a family of  four, they may qualify for subsidies.

Just because a policy doesn’t comply with the  law doesn’t mean consumers will get cancellation letters. They may get notices  saying existing policies are being amended with new benefits and will come with  higher premiums.

Some states, including Virginia and Kentucky,  required insurers to cancel old policies and start from scratch instead of  beefing up existing ones.

It’s unclear how many individual plans are  being canceled – no one agency keeps track. But it’s likely in the  millions.

Advance notice: Dan Mendelson, president of the market analysis firm Avalere Health, says most policyholders in the individual market will receive some notice that their coverage will changeAdvance notice: Dan Mendelson, president of the market  analysis firm Avalere Health, says most policyholders in the individual market  will receive some notice that their coverage will change

 

Insurance industry experts estimate that  about 14 million people, or 5 per cent of the total market for health care  coverage, buy individual policies. Most people get coverage through jobs and  aren’t affected.

Many states require insurers to give  consumers 90 days’ notice before canceling plans. That means another round of  cancellation letters will go out in March and again in May.

Experts haven’t been able to predict how many  will pay more or less under the new, upgraded plans. An older policyholder with  a pre-existing condition may find that premiums go down, and some will qualify  for subsidies.

In California, about 900,000 people are  expected to lose existing plans, but about a third will be eligible for  subsidies through the state exchange, Covered California, said Anne Gonzalez,  their spokeswoman. Most canceled plans provided bare-bones coverage, she  said.

‘They basically had plans that had gaping  holes in the coverage. They would be surprised when they get to the emergency  room or the doctor’s office, some of them didn’t have drug coverage or  preventive care,’ Gonzalez said.

The cancellations run counter to one of President Barack Obama's promises about his health care overhaul: ¿If you like your health care plan, you'll be able to keep your health care plan¿The cancellations run counter to one of President Barack  Obama’s promises about his health care overhaul: ‘If you like your health care  plan, you’ll be able to keep your health care plan’

 

About 330,000 Floridians received  cancellation notices from the state’s largest insurer, Florida Blue. About  30,000 have plans that were grandfathered in.

Florida insurance officials said they’re not  tracking the number of canceled policies related to the new law.

National numbers are similar: 130,000 cancellations in Kentucky, 140,000 in Minnesota and as many as 400,000  in  Georgia, according to officials in those states.

Cigna has sent thousands of cancellation  letters to U.S. policyholders but  stressed that 99 percent have the option of  renewing their 2013 policy  for one more year, company spokesman Joe Mondy  said.

Cancellation letters are being sent only to  individuals and families who purchase their own insurance.

However, most policyholders in the individual  market will receive some notice  that their coverage will change, said Dan  Mendelson, president of the  market analysis firm Avalere Health.

The cancellations run counter to one of  President Barack Obama’s promises  about his health care overhaul: ‘If you like  your health care plan,  you’ll be able to keep your health care  plan.’

Philip Johnson, 47, of Boise, Idaho, was shocked when his cancellation notice arrived last month. The gift-shop  owner  said he’d spent years arranging doctors covered by his insurer for him, his wife  and their two college-age students.

 

After browsing the state exchange, he said he  thinks he’ll end up paying lower premiums but higher deductibles. He said the  website didn’t answer many of his questions, such as which doctors take which  plans.

‘I was furious because I spent a lot of time  and picked a plan that all my doctors accepted,’ Johnson said.

‘Now I don’t know what doctors are going to  take what. No one mentioned that for the last three years when they talked about  how this was going to work.’

Read more: http://www.dailymail.co.uk/news/article-2485811/People-h
ealth-plans-shocked-Obamacare-prices-insurance-companies-cou
ntry-roll-cancellation-letters.html#ixzz2jaihIGhP

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