The brouhaha over “keeping the plans you like” and “forcing healthy young men to buy policies with maternity benefits” are simply the latest examples of political red herrings being used by the GOP and detractors of the Patient Protection and Affordable Care Act in an attempt to dupe Americans about the facts.
FACT: If you received a cancellation notice from your insurance company, that was their decision, not the federal government’s decision, even when it came to health insurance plans that didn’t meet PPACA minimum standards.
FACT: The Essential Health Benefits codified into the PPACA define the minimum standards for health insurance and just as with today’s employer-provided health insurance plans, the PPACA’s EHBs include some health care services some of us may not want or ever need.
Maybe we can understand the facts better by asking a few questions.
Who Actually Cancelled Your Policy and Why Did They Do It?
Here’s what The Pew Charitable Trusts tells us in, “Q&A: Sorting Out the Controversy Over Canceled Insurance Policies” (emphasis added below):
“The ACA set minimum standards for all individual health insurance policies sold after Jan. 1, 2014, not just those sold on the insurance exchanges. For example, all policies must cover a defined set of services, such as maternal health care, mental health care and pediatric dental and vision care.
Insurance carriers that offered policies that did not cover the required benefits or that placed dollar limits on coverage informed millions of policyholders that their existing policies would not be renewable into 2014.
That was actually a choice the insurance carriers made themselves. The policies could have been renewed for a year, even if they didn’t comply with the ACA and even if they remained in effect into 2014.
Many insurance carriers simply decided they wouldn’t renew them.”
“Long before the cancellations bubbled up as an issue, a number of states, including Mississippi, Oklahoma, Iowa and Texas, encouraged carriers in their states to allow renewals and early renewals (for those policies that would have expired after Jan. 1) of existing policies for up to a year provided that the new terms began before the new year.
By taking that step, those states essentially complied with the president’s request before he made it while also keeping people off the exchanges. Other states, such as Rhode Island and Illinois, specifically prohibited early renewals, saying they violated the spirit of the ACA to provide affordable, comprehensive coverage to all.”
What does all this tell us? Three things.
1) The PPACA does set minimum standards for health insurance to protect consumers from so-called “junk” policies. I have a personal story to share on that below.
2) Each state’s department of insurance always has and will continue to decide, within the law, what kinds of insurance your insurer can or cannot offer, and that includes renewals and early renewals of non-compliant plans in your state.
3) It is then up to your insurance company to decide – both before and after the president’s decision to extend non-compliant plan availability – whether or not to offer you that extension where permitted by the state and so long as it complies with the PPACA.
Who Decides What Policies Are Available In Your State?
The answer is that it’s your state’s department of insurance.
A.M. Best News Service published an article on November 27th about Montana’s and Pennsylvania’s announcements to allow health insurance companies operating in their states the option of renewing non-PPACA-compliant health insurance plans.
According to the article, this brings the total number of states allowing insurers to extend non-compliant policies to 23, plus the District of Columbia. Eighteen states have not yet announced a decision.
It’s important to understand that IT IS THEN LEFT TO THE INSURERS to decide if they will, in fact, extend those non-compliant plans to their customers where they are allowed to do so.
What About Benefits You Don’t Want?
Thanks to the PPACA, health insurance companies will now be forbidden from doing things like denying insurance to people with pre-existing conditions and placing lifetime caps on how much they will pay out in claims. That’s evidence of the “Patient Protection” parts of the PPACA.
As for benefits, health insurers also will now have to sell policies that meet a minimum set of standards known as Essential Health Benefits. Think of these as the “food safety requirements” of health insurance. We want our food to be safe, right? Well, now health insurance companies won’t be able to sell policies which don’t meet a very reasonable minimum set of coverage standards, including preventive and wellness visits, prescription drugs, and mental and behavioral health services.
And, yes, maternity and newborn care.
They may be out there somewhere, but I’ve never ever been presented with choices within a health insurance plan in which I could make the kind of a la carte choices those railing against maternity and newborn care seem to be implying are being taken away by the PPACA. If anyone has evidence of such plans, I invite you to share that in the Comments sections.
In the meantime, let’s look at my employer-provided plan.
Every month, I and my employer pay a combined premium of $1423 for a high deductible health care plan for my family of four. It includes coverage for services which I either don’t want or am unlikely to ever need.
1. Well Child Care
(My children are no longer minors)
2. Chiropractic Care
(I don’t want this coverage since I don’t go to chiropractors. It’s not that I have anything against them, I just choose not to go to them.)
3. Breast-Feeding Equipment
(Absolutely don’t need or want this as it’s been medically guaranteed to never again be necessary in this household!)
4. External Prosthetic Appliances
(This is, thankfully, something none of us in our family currently need, but you never know, and isn’t that why we have insurance?)
5. Home Health Care
(Is the offered 60 days per year the right amount? Just doesn’t seem like much if you need home health care at all.)
6. Skilled Nursing Facility
(Again, limited to 60 days per year.)
If you have employer-provided coverage, I invite you to look at yours. What’s on your list of unwanted or unnecessary coverage?
For those in the individual market, I’d be curious to know what’s on your current plan, both in terms of coverage you don’t want but pay for, as well as what your premiums and deductibles are.
I’ll offer my own story first.
When I was unemployed and between jobs in late 2012 and early 2013, I found a private plan for $275 per month for the four of us. It was all I could afford, and even that was an expense I really couldn’t afford. It was from UnitedHealth and was called UnitedHealthOne Saver 70.
It was the very definition of “junk” insurance.
- Annual deductible: $12,500.00 (Yes, that’s twelve thousand five hundred dollars.)
- Benefits paid after meeting deductible: 70% (30% was still on me)
- Co-insurance out-of-pocket annual maximum per person: $10,000.00
- Office visits: Not Covered
- Prescriptions: Not Covered
Looking back, it was a waste of money. Had we experienced any significant medical event during that time, it would have bankrupted us.
Who Is Presumably “Hurt” By Non-Renewals?
According to data compiled and analyzed by FamiliesUSA, the answer is about 1.6 million Americans who are at risk of losing their present coverage.
This group of 1.6 million fellow citizens are the people who are too wealthy to qualify for Medicaid or subsidies under the PPACA for private insurance, and who are now paying for plans that don’t meet the PPACA’s minimum standards.
According to the CBO, the PPACA, “…will reduce the number of nonelderly people without health insurance coverage by 14 million in 2014 and by 29 million or 30 million in the latter part of the coming decade.”
With all due respect to my fellow Americans among the 1.6 million, you’re not the people in greatest need of the PPACA’s health insurance reform. That said, I ask that you please not forget that you do still benefit from many of those reforms, especially the “Patient Protection” elements of the PPACA even if you’re in one of the 23 states or DC where your insurance company could but has decided not to let you renew your non-compliant plan for another year and has instead chosen to try to sell you a more expensive plan.
Check the exchanges before you just take your insurance company’s word for anything. Remember, too, as you do this that it is, once again, every insurance company’s decision as to whether or not they offer any plans at all in your state. If you live in a state that isn’t a very attractive market; i.e., insurers can’t make lots of money, you will have fewer choices.
That’s the free market at work. And remember, even not-for-profits make marketing decisions driven by where they can make money.
Here’s the reality. The PPACA is designed to help our poor and nonelderly fellow Americans who are without health insurance coverage now and, because of that, have no access to health care services. It is they who will now have access to subsidized health insurance and, by extension, access to health care.
Is that so terrible an idea?
Let’s be real about this, too. No one except the one-percenters could afford to pay for health care in an open market without insurance. I can tell you from personal experience that a recent single night in a hospital that only included tests and no procedures would have cost me over $13,000 without insurance. One night. No procedures. 13-grand.
Know what would bring those costs down immediately and in meaningful ways?
Just look at the facts as presented in BloombergBusinessweek by Jeffrey Pfeffer in, “The Reason Health Care Is So Expensive: Insurance Companies.”
“More than 20 years ago, two Harvard professors published an article in the prestigious New England Journal of Medicine showing that health-care administration cost somewhere between 19 percent and 24 percent of total spending on health care and that this administrative burden helped explain why health care costs so much in the U.S. compared, for instance, with Canada or the United Kingdom. An update of that analysis more than a decade later, after the diffusion of managed care and the widespread adoption of computerization, found that administration constituted some 30 percent of U.S. health-care costs and that the share of the health-care labor force comprising administrative (as opposed to care delivery) workers had grown 50 percent to constitute more than one of every four health-sector employees.” (emphasis added)
Which brings us to this final, bonus red herring.
The U.S. Health Care System Is the Best in the World
Wrong, wrong, wrong. It’s not the best nor the most cost-effective health care system in the world. How about we stop pretending that it is?
How about we politely and calmly stop our friends, family, neighbors, and co-workers in their tracks when they make such claims?
How about we do the same when they pull out their GOP red herrings like is happening now regarding plan renewals and unwanted coverage?
Instead, how about we use facts to direct the conversation toward something constructive like what the PPACA actually is, what it is designed to accomplish, what still needs to be done to ensure every American has access to health care, and what can be done to actually control and even reduce the actual COST of health care in America?
Wouldn’t that be a better use of everyone’s time and attention than listening to, responding to, or perpetuating the lies and misinformation coming from the GOP?