The Real Story Behind the Phony Canceled Health Insurance Scandal [View all]

[babylonsister]

http://www.motherjones.com/politics/2013/11/obamacare-canceled-health-insurance


The Real Story Behind the Phony Canceled Health Insurance Scandal
Insurance companies ripped off Americans for years with lousy health plans. Obamacare was designed to fix that.

—By Stephanie Mencimer
| Mon Nov. 4, 2013 7:13 AM PST

snip//

A good example might be Dianne Barrette, 56, who appeared on CBS News with Jan Crawford last week for a segment about the wave of cancellations. Barrette, a realtor in Florida, was upset because her $54 a month insurance plan was being canceled. She believed a new one would cost her more than $500 a month due to Obamacare. "What I have right now is what I'm happy with," she said. "I just want to know why I can't keep what I have. Why do I have to be forced into something else?"

But here’s the rub: Barrette's $54 plan wasn't even insurance. When I talked to her, she was unsure of what her plan covered. But she said it was what Blue Cross calls a "supplemental" or discount plan, which only pays $50 toward doctor's office visits and a few other out-patient services, including mammograms. What her plan doesn’t cover: hospitalization. Not at all. So if she gets hit by a car, the people ultimately picking up the tab will be the hospital and everyone else (by way of higher medical costs). If she gets cancer, she’s basically out of luck. "It's all I could afford," she told me.

Blue Cross was selling these plans in malls and other retail insurance "shops" in an effort to target young people who don't have or don't think they need health insurance, luring them in with cheap premiums of between $24 to $54 a month. The plans came with a not-well-disclosed caveat that they were not designed to replace hospital-surgical plans, which Blue Cross encouraged people to buy—provided the purchasers could get past all the exclusions for preexisting conditions.

Blue Cross is now canceling 300,000 plans in Florida, and, no doubt, a lot of them are such "Go Blue" plans. (A spokesman from Blue Cross of Florida wouldn't answer any specific questions about which plans are getting canceled.) The ACA was designed to replace plans like the one Barrette bought. And every plan sold on the Obamacare exchanges must provide a minimum and meaningful level of coverage, including free preventive care, mental health and maternity coverage, hospitalization, and rehabilitation services that are indispensable for anyone who has a disability, who becomes injured in a bad accident, or who has a degenerative disease such as multiple sclerosis. These plans don't have annual or lifetime coverage limits of any sort. And the insurance companies selling plans on the exchange must disclose coverage terms in such a way that people know what they're getting and can compare similar plans.

Much of the recent media coverage treats the old junk plans as a national treasure, their loss a true scandal. Far from being a victim of Obamacare, Barrette should have been a story about someone who will benefit immensely from the Affordable Care Act. According to the Kaiser Family Foundation premium calculator, Barrette, who makes about $30,000 a year, is eligible for an annual tax credit of up to $3,967 a year, which could get her a silver plan on the exchange for $234 a month (in cost to her), or a bronze plan, with slightly higher out of pocket costs, for $97 a month. True, with the bronze plans, she’d be paying $43 a month more, but in return, she would have true protection and access to health care, not sham coverage. A bronze plan would replace her $50 doctor's office discount with free preventive care services, including mammograms, cover hospitalization and other services, and cap her out of pocket costs at slightly more than $6,000 a year. Barrette should be cheering the death of her old plan.

The same is true of the other conservatives who've groused about losing a plan, including Malkin. As Metcalf points out, "If they're having to cancel out a plan with a $10,000 deductible and end up with a plan with a $2,500 deductible, that's a better plan, period." Pollack says, "As people now get real protection, the premiums may be somewhat higher, but it's a different product and you're saving money on the back end. The Affordable Care Act eliminates lousy coverage, which ultimately saves cost for people when they receive care."