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Sticker shock often follows health insurance cancellation

By Kelli Kennedy

Associated Press

POSTED:
LAST UPDATED: 04:10 a.m. HST, Nov 02, 2013


MIAMI >> 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. 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.

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.

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 percent 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. 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. Insurance industry experts estimate that about 14 million people, or 5 percent 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, said Anne Gonzalez, a spokeswoman for the exchange, called Covered California. 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.

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."

___

Associated Press writers Christina A. Cassidy in Atlanta; Rachel La Corte in Olympia, Wash.; Marc Levy in Harrisburg, Pa.; Tom Murphy in Indianapolis; Juliet Williams in Sacramento, Calif.; and Kristen Wyatt in Denver contributed to this report.






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palani wrote:
Is the Associated Press and the mainstream media finally acknowledging the fatal problems with Obamacare? Almost everyone will pay more for less. Free Medicaid roles will explode, and so will the state budgets that pay for much of it.

The President lied, and sick people will die.


on November 2,2013 | 05:03AM
Pacej001 wrote:
Bumper sticker in the making: "The President Lied. People Died." Where have I heard that one before? Seems that what goes around, comes around.
on November 2,2013 | 09:02AM
hanalei395 wrote:
"Bumper sticker in the making. 'The President Lied. People Died'". ..............Wishful thinking, by Pace.
on November 2,2013 | 09:15AM
HD36 wrote:
" I never had sex with that lady Monica Lewinsky" -Bill "Slick Willy Clinton" , who opened the door to executive lying without consequences.
on November 2,2013 | 12:50PM
jomama wrote:
Iraq has wmd's
on November 2,2013 | 02:30PM
meat wrote:
Said Hillary Clinton, John Kerry, Ted Kennedy, Harry Reid in Iraqi Liberation Act. Oh yeah and signed by Bill Clinton. Educate yourself.
on November 2,2013 | 04:38PM
false wrote:
"I never had dinner with the president. I never had dinner with the president. I never had dinner with the president." - Ice Cube
on November 2,2013 | 07:46PM
DiverDave wrote:
90% of citizens in the U.S. had health insurance they could afford before this debacle called Obamacare. That number has already dropped and will continue to because of the new policies they will be forced to buy that they cannot afford with ridiculously high deductibles. Besides, since you cannot be turned down for preexisting conditions, why not just pay the small penalty and wait to get insurance after you become sick? Wouldn't it be nice if you could just wait to have a car accident and then call a company and say "I just totaled my car, I need to buy some insurance so you will pay for it". Or how about home owner's insurance that you can buy after your house burns down? It I time to admit that they should have read the bill before they passed it, and that ObamaCare is a mess that doesn't make cents. Pun intended.
on November 2,2013 | 09:48AM
mikethenovice wrote:
Could it be that the original health insurance cost was lower due to having a less comprehensive coverage to begin with? And now the new insurance under the ACA aka Obamacare covers a wider scope of coverage? Can't compare a BMW to a Yugo?
on November 2,2013 | 05:31AM
hawaiikone wrote:
If it looks like a duck, walks like a duck, and quacks like a duck, chances are it's a duck...
on November 2,2013 | 06:11AM
hanalei395 wrote:
The guy is 64. Maybe, in a year or less, he can go on Medicare. So can his wife, if she's the same age.
on November 2,2013 | 06:31AM
GWakai02 wrote:
Billions of $'s taken from medicare to fund aca. In time medicare will be bankrupt and non existent or reduced coverage. Then you'll have to go to HMSA or Kaiser or Medicaid or go without. Resulting in higher premiums, deductibles, less coverages, available doctors, penalties, and who knows what else. We are in for a rude awakening.
on November 2,2013 | 08:44AM
hanalei395 wrote:
"who knows what else" ..........You don't. And you're hoping, wishing, praying that SOMETHING drastic DOES happen. (I'm already with Kaiser, and I won't need Medicare).
on November 2,2013 | 09:04AM
pcman wrote:
IRT Hanalei on age 64. That's beside the point. He should have been able to keep his current plan at a reduced premium of $2500, as Obama said, but he lied. As Hillary said, "What difference, at this point, does it make?"
on November 2,2013 | 10:58AM
hanalei395 wrote:
"He should have been able to keep his current plan" ........... A junk, meaningless "health plan" which is almost the same as having no health plan.
on November 2,2013 | 11:16AM
twon wrote:
Your proof?????
on November 2,2013 | 05:19PM
MexMe wrote:
He researched that plan and it covered everything he needed. At 64, this couple didn't need a maternity plan. He is now unable to see any of the doctors he has built a relationship with over the last two decades. Stop drinking he Kool-Aid, hanalei395 or stop posting. You refuse to either read the article or understand the content.
on November 2,2013 | 09:18PM
Pacej001 wrote:
So right mike, these oldsters just were too stupid to realize they needed free birth control pills and neonatal care. BMW. LOL
on November 2,2013 | 08:23AM
hanalei395 wrote:
Maybe the old guy can use the Viagra.
on November 2,2013 | 09:40AM
Pacej001 wrote:
Tell me. Why should Viagra be part of medical insurance? Birth control? These are uniquely personal things that rightly belong in the category of a personal responsibility and they are part of the reason costs will just keep going up in a system in which your political buddy can just add your particular requirements onto healthcare legislation which forces other people to pay for it.
on November 2,2013 | 11:18AM
hanalei395 wrote:
I read where Viagra and birth control pills are already in most health plans. It was in an article about Rush Limbaugh and his dependence on Viagra and OxyContin.
on November 2,2013 | 11:37AM
Pacej001 wrote:
Why should these things not be an individual responsibility..
on November 2,2013 | 12:28PM
MexMe wrote:
Personal experience? I didn't see where anyone stated he needed Viagra. Stick to the topic. He is paying for coverage he neither wants nor needs.
on November 2,2013 | 09:19PM
twon wrote:
Yeah, oh that's right, in socialism/communism, everyone will drive a BMW, whether you want one or not! One shoe fits every head, or something like that....it is the government answer!
on November 2,2013 | 05:23PM
pcman wrote:
IRT mike on coverage. Obama said you could keep your current plan, and it would cost $2500 less. So who needs a BMW plan when they only need a Yugo. Are we all forced to buy a BMW if we only want a Yugo? Maybe the president lied to get reelected, huh? Why is he lying now? President Clinton was impeached for lying to Congress. Obama is lying to everyone. Is that impeachable?
on November 2,2013 | 10:26AM
Nalukai wrote:
I am a 53 year old Male. I don't need maternity care or gynecology exams. GET IT ?
on November 2,2013 | 10:33AM
hanalei395 wrote:
You need the prostate exams. Get that.
on November 2,2013 | 10:42AM
jomama wrote:
You already had it. There were not separate plan benefits for old men and young women. This is a non issue that shows your bias
on November 2,2013 | 02:33PM
SteveToo wrote:
Yea now he and she are covered for any maternaty expences. LOL They had what they NEEDED. Not what the Liberal Democrats like Obama THINK they need.
on November 2,2013 | 09:36PM
mikethenovice wrote:
If only the Republicans could stop laughing and start help solve this crisis?
on November 2,2013 | 05:32AM
hanalei395 wrote:
They're laughing on the outside, but crying on the inside. The Republicans know, like Social Security and Medicare, Obamacare is here to stay.
on November 2,2013 | 06:58AM
cojef wrote:
They won't be laughing and so will the Democrats when they lose their exempted health insurance plans. The congressional staffs that actually drafted the original bill will also cry like babies because they will also lose their cadillac policies. "What's good for gander is good for the geese".
on November 2,2013 | 08:09AM
Pacej001 wrote:
Did I miss something? As far as I know, the congressional staffers will go onto Obamacare, but they will also receive large subsides, up to 75% of the cost of the much more expensive Obamacare insurance policies.
on November 2,2013 | 08:40AM
Pacej001 wrote:
Just won't let reality in, will you. As many as 14million are going to be forced out of insurance that worked for them and into insurance that is either much more expensive or has a much higher deductible and provides less coverage. -------- Next year about 90million are forecast to lose their emplorer plans and face a similar predicament. --------- Meanwhile, the Medicaid rolls are booming while there is little incentive for paying consumers to sign up for Obamacare. ---------- So while you repeat your mantra over and over again, this thing is going to blow. Obamacare will be altered drastically or our health care delivery system will be wrecked.------------- And while, your hero, the guy that seems continually surprised by almost every event, is doing NOTHING about the oncoming insolvency of Medicare part A in about a decade and the oncoming disaster with unsustainable entitlement spending.
on November 2,2013 | 08:32AM
twon wrote:
There is one big difference that I can see regarding Social Security, Medicare and Obamacare.... the first two programs started out with a huge base contributing money in to support a smaller benefit taking group. Now, not so much, those two programs are slated to be in the RED in the near future. Obamacare is starting with the same smaller base group and an increasing benefit taking group. All those government subsidies that the Dems are touting for those who cannot afford their insurance, where is the money coming from???? Oh yeah, the money tree everyone has growing in his/her backyard!
on November 2,2013 | 05:32PM
Pacej001 wrote:
I think the Republicans offered a solution, what was it, oh, three weeks ago. It was called a one year delay in Obamacare implementation. Yup, ancient history. Way, way back last month. Remember, mike? Seems like they were called terrorist/arsonists/suicide bombers for making that demand. What were those crazy Tea Party wing nuts thinking? Could they have been thinking that Thanksgiving was about to arrive in mid October with this turkey of a healthcare law?
on November 2,2013 | 08:37AM
Maipono wrote:
Mike, remember, the Tea Party Patriots wanted to delay Obamadon'tcare for one year so that congress could work on it, but the Obama and the Democrats insisted on running Obamadon'tcare, even if it meant shutting down the government, and causing the World War II Veterans to miss the World War II Memorial? How quickly Obama supporters forget!
on November 2,2013 | 09:11AM
jomama wrote:
"work on it" or give it a working over. Big difference and i dont blame obama for driving forward
on November 2,2013 | 02:35PM
meat wrote:
Lying while driving forward. Mr "I didn't know". Loser.
on November 2,2013 | 04:40PM
DiverDave wrote:
Mike come clean and stop trying to twist it into the Republican's fault. They were shut out of the original discussions, and ObamaCare was hastily passed while the Dems had majority vote in both the House and the Senate. The Republicans wanted to keep the existing system that 90% of the citizens were covered already under and simply tweak it with things like tort reform. ObamaCare is a massive power grab of 1/6 of the American economy, taking us ever closer to Socialism.
on November 2,2013 | 09:57AM
meat wrote:
Republicans offered FOUR health plans to the Democrats when they(Democrats and BO) started this whole thing in '09, only to be SHOT DOWN by Harry Reid WITHOUT ANY discussion on the floor. So get a clue you NOVICE. Like trained monkeys, all you uninformed leftwing loons do is preach what the leftwing mainstream media(NBC, ABC, CBS) EXPECTS you to do. LOSERS.
on November 2,2013 | 10:16AM
Nalukai wrote:
eh, why don't you left-wing luaus clean up your own poop !
on November 2,2013 | 10:36AM
st1d wrote:
obamascam is being exposed as the worst piece of unread legislation ever passed. obama lied when he said that if you liked your plan you could keep it. obama lied when he said that you would be able to buy coverage at a cheaper price. and only six people registered nationwide on the first day?
on November 2,2013 | 07:44AM
cojef wrote:
Spoken like a true REpublican.
on November 2,2013 | 08:10AM
st1d wrote:
obamascam is going to be shut down for an indefinite period to retool its site and program.

in simpler terms for democrats, the scam will be delayed. precisely what republicans were asking for before obama and democrats forced the government shutdown on the people of the united states.

again, in simpler terms for democrats, all the pain and suffering of the people of america was for nothing. and obama and the democrats knew it. and they still shut down the government.


on November 2,2013 | 09:02AM
Pacej001 wrote:
Seem like st1d has the facts right.
on November 2,2013 | 09:05AM
HD36 wrote:
Yea, seems like the only the Tea Party Republicans were opposed to it.
on November 2,2013 | 12:59PM
Nalukai wrote:
It's official----Barack Hussein Obama is a L.I.A.R . (period)
on November 2,2013 | 10:29AM
st1d wrote:
the biggest disappointment in this fiasco was the shibai performance put on by hawaii's congressional delegation, all condemning the republican party for trying to delay the rollout of the obamascam, they ignored the fact that the registration system was proven a failure just days before rollout when it crashed during a mock test.

yet, knowing all of this the hawaii delegation was in lock step with obama in forcing the country into a government shutdown.

they chose cheap party antics over protecting the people of america.


on November 2,2013 | 12:55PM
HD36 wrote:
The IRS is going to be handling the payment and fines part of Obamacare so they will need direct access to your bank account.
on November 2,2013 | 01:07PM
HD36 wrote:
The biggest lie is that we must print $85 billion a month to fight deflation. We need more inflation. Why would I want to see gas at $5 a gallon or eggs costing $10 a carton? The main beneffit to the government is that QE keeps interest rates at historic lows so they can keep servicing the $17 trillion dollar debt.
on November 2,2013 | 01:06PM
RandolphW wrote:
Health care costs are going to continue to spiral out of control. No relief is in sight. From what is now known, Obama Care is going to be one of the big contributors to out of control costs. Better to have a good Hospice Care policy.
on November 2,2013 | 05:36PM
SteveToo wrote:
But he said we could keep them. HE LIES. He just is in way over his head. What a B-0-Z-0. We'll be a 3rd World Socialist country pretty soon.
on November 2,2013 | 09:33PM
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