Who’s On First?

The whole point of Obamacare was to create a safety net to guarantee medical coverage for every American.

Before enactment of the law, most Americans had coverage, either through their employers or via Medicare for seniors.  Very poor families could get coverage via Medicaid, with wider coverage for poor children under the CHIP (Children’s Health Insurance) program which expanded the scope of Medicaid for minors.

But a growing number of people were left out  or being pushed out, and the problem was getting larger every year.  People who were sporadically or irregularly employed, self-employed, part-time workers, and employees of smaller companies were not eligible for employer-provided insurance, and left to buy policies on the private market.  On the lower end of the economic spectrum, many could not afford the rates charged by insurers for even moderate coverage. Insurers were happy to sell policies to healthy people, but reluctant to sell to anyone at risk for serious illness, so they generally excluded customers with “pre-existing” conditions, and they required completion of long medical questionnaires and a medical exam before accepting most new customers. Further, as health care costs rose, so did health insurance premiums, so the boat was rocking and more and more people were falling off.

Unfortunately, many of the people who couldn’t afford insurance were the people who needed it the most: the ones who also couldn’t afford to pay out-of-pocket for routine, preventive care, and the ones who were excluded from the health insurance market precisely because they were already sick (or pregnant). 

One solution to this problem would have been the creation of a nationalized health care system, similar to the ones that work well in Canada, UK, and other western nations.  An expansion of Medicare to provide extended premium-based coverage to Americans of all ages might have been an easy first step.  But that simply was not politically feasible.

So Congress enacted the plan that the insurance companies were willing to support. Because the intent was to provide coverage for the previously excluded — low income people and sick people — the law was written with their needs in mind. To help low income people, a system of streamlined eligibility for Medicaid and generous subsidies for health insurance premiums was created.  To help the sick people, the practice of denying insurance to people with pre-existing conditions was outlawed, as well as the practice of setting maximum benefit amounts.   From now on, everyone who wants health insurance can get it, and the insurance companies will have to pay for whatever medical treatment each of those people needs, no matter how much it ends up costing.

The people who couldn’t get insurance because of their medical histories have been anxiously waiting for the exchanges to open. So, too, the many who once had insurance but lost their coverage at some point when they could no longer afford to pay their premiums.   So it no wonder that the exchanges were swamped on opening day: these people have been waiting a very long time.

But there is another, (I think) very large group that came knocking at the exchange doors on opening day, and one that perhaps had not been anticipated or well understood in the drafting of the law.  I am part of that group. We are the ones who already had coverage on the private, individual market, and were happy with the coverage we had.  Unfortunately, our insurance companies don’t want us to keep our old plans.  In some cases that is because we signed up for our current plans after the passage of the  ACA (Affordable Care Act) in March, 2010 — by the express terms of the law, our policies would not survive after implementation of the exchanges in 2014.   Even though many of us had been insured for many years, often with the same company, we often had reasons to change our plans between 2010 and 2013, typically because of rising premiums. One plan would get too expensive, so we would sign up for a cheaper plan with the same company.

So we were a little bit surprised to wake up to the news on October 1st that we were now probable exchange customers.   We thought we had insurance that we could keep.  We were wrong.

But there is another group that also faced bad news. Guess what? Those lovely insurance companies are raising premium rates on all of those “grandfathered” plans!  Yes, your plan is eligible to live on, post-Obamacare. Yes, you can keep your plan.  Just know that starting next month — or next January – or the month of your birthday or the month that your policy comes up for annual renewal — your premium will now be sky high.

I understand the economics that dictate these moves. The insurance companies cannot legally sign up new customers to these old, grandfathered plans after the first of the year, so those plans will naturally get more expensive to run as their pools of insured people age and dwindle.  Mathematically and economically it probably makes a lot of sense.

But I don’t think the insurance companies handled this well. They should have warned us.  Instead of those lovely mailings telling us about all the great things they were doing for us to keep us healthy and keep rates down, they should have been telling us that changes were coming and let us know to expect them.

Because there are now a lot of angry people out there, who are blaming a problem that comes from rising health costs on Obamacare.  The premiums aren’t going up because of the law — on the contrary, the law has specific provisions that make it more difficult for insurance companies to raise rates. The premiums are going up because of the economics.

Because we didn’t know that we would need to be changing our policies, and because our insurance companies dropped the bombshell on us only days before the exchanges were scheduled to launch — we all came knocking on day one. We were stunned and confused and wanted to see what our options were, and we didn’t want to wait.  So I think that’s one very big part of the reasons that the sites slowed to a crawl and crumbled under our weight.

So I think a little more education and preparation over the past several months would have gone a long way toward making the transition a lot easier.

 

*  “Who’s on First?” is a reference to this famous skit by Abbot and Costello:  http://www.youtube.com/watch?v=airT-m9LcoY

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