“If you like it, you can keep it”: ObamaCare set to trigger insurance policy cancellations
posted at 1:21 pm on May 30, 2013 by Erika Johnsen
After I graduated college and before I landed my first real-deal job that included insurance benefits, I took out my own independent health insurance plan that covered all of the bases a young and healthy person like myself might need. It cost me about ninety dollars a month, and seeing as how I didn’t have any regular health care needs, it was pretty much just catastrophe insurance in case I happened to break my leg or get into a car accident or catch malaria or some other relatively unlikely scenario. I felt secure about the situation, knowing that I would be covered in case of a mega-emergency but that I wasn’t paying out the nose for a health care policy I wouldn’t need to use very often.
In order to work, of course, ObamaCare desperately needs young and healthy people to start paying into the system for an outsized portion of the benefits they’re likely to not use very often — which is precisely why some people with the type of bare-bones insurance that I had are about to get forcibly kicked off of their plans. That kind of thing doesn’t quite jibe with our minimum requirements, you see, says the all-knowing ObamaCare law from on high — but don’t worry, because there will be plenty of available benefits and subsidies to make up the difference, we swear!
Fox News reports on the increasingly apparent scenario many Americans are going to facing in the near future: Pending rules mean that a whole lot of individuals (and some small businesses) with personal insurance plans could be receiving cancellation notices as early as this fall as insurance plans that don’t meet the core requirements are are discontinued:
In fact, state insurance commissioners largely are giving insurers the option of canceling existing plans or changing them to comply with new federal requirements. …
The National Association of Insurance Commissioners says it is hearing that many carriers will cancel policies and issue new ones because administratively that is easier than changing existing plans.
About 14 million Americans currently purchase their health policies individually, a number expected to more than double eventually because of the new law’s subsidies and one-stop insurance markets. …
Nationally a considerable number of people could be affected by cancellations. Information from insurers is still dribbling in to state regulators. …
“You’re going to be forcibly upgraded,” said Bob Laszewski, a health care industry consultant. “It’s like showing up at the airline counter and being told, ‘You have no choice, $300 please. You’re getting a first-class ticket, why are you complaining?’”
In other words, a bunch of individuals and small businesses are going to lose their plans and instead have to find replacement plans (or pay the penalty) that meet the law’s basic standards; but obviously, the administration is touting this as them doing everybody else a big fat favor, even if they don’t know it yet:
But supporters of the overhaul are betting that consumers won’t object once they realize the coverage they will get under the new law is superior to current bare-bones insurance. For example, insurers will no longer be able to turn people down because of medical problems. …
The Obama administration did not respond directly to questions about the potential fallout from cancellation notices. Instead, Health and Human Services spokeswoman Joanne Peters released a prepared statement saying: “Beginning in October, individuals and small businesses will be able to shop for insurance in the marketplace, where we are already seeing that increased competition and transparency are leading to a range of options for quality, affordable plans.”
So, by “If you like your health care plan, you can keep it,” what Obama really meant to say was, “If we like your health care plan, you can keep it.” As Philip Klein explains at the Washington Examiner, in order for insurers to be able to afford taking on these riskier insurance pools, they are going to be directly relying on luring younger and more profitable people into them:
That means much of the burden of the law will be on the hipster generation of Americans in their 20s and 30s, who will have to choose between paying a tax or paying for insurance they may not want. …
Under current law, a 25-year-old hipster living in San Francisco’s Mission District could purchase plans for as cheap as $95 per month through the website eHealthInsurance.com.
But according to Covered California, the entity that runs the California exchanges, in 2014, the cheapest qualifying plan in the state will be $162 per month — or nearly 60 percent higher.
Younger individuals would stop being eligible for subsidies after earning $32,000 per year. At 26, they would no longer have the option of remaining on their parents’ insurance policies, and at 30, they could no longer legally purchase cheaper, catastrophic health insurance.
You got what you voted for, Obamabots.
Breaking on Hot Air