Monday, November 4, 2013

How "ObamaCare Cancelled Your Plan" is really an Insurance Co Scam to Rip You Off

How "ObamaCare Cancelled Your Plan" is really an Insurance Co Scam to Rip You Off

by Vyan 
Daily Kos member

We're all now quite familiar with the reported claims by hundreds of people that they've received letters from their health insurance company that their plans have been "Cancelled Due to ObamaCare".   We all know that this wasn't supposed to happen, that the President promised it wouldn't happen and even though many of these plans are only cancelled because they're essentially useless due to their exorbitant co-pays and deductibles that argument hasn't yet been entirely convincing.
As I've previously diaried GOP Reps like Marsha Blackburn have gone ballistic arguing that ObamaCare has taken away people's "freedom" to buy the plan they want, even if it's cheap (and defective).
Presidential Loser Mitt Romney was on Meet the Press this weekend haughtily proclaiming that the President Obama's Failure to the Tell The American People the Truth about the ACA is now rotting his Second Term.
However, Talking Points Memo has a story up today that all of us need to see, bookmark and start forwarding to each and every media outlet that continues to claim that the ACA has "Cancelled" anyones Insurance Plan.
Because it hasn't, that is A LIE - Obamacare didn't Cancel their plan.
Plans that were in place since March of 2010 (prior to the Affordable Care Act)  were "Grandfathered" and excluded from many of the laws requirements so that they wouldn't be cancelled. ObamaCare doesn't FORCE those plans to remain, but it doesn't FORCE them to be cancelled either. TPM reports now that the Insurance Companies themselves have deliberately sent out these cancellation notices, along with automatic renewals into higher rate plans before Oct 1st as a means of preventing people from Shopping on the Exchange and finding better, cheaper plans.
In short, this is all an Insurance Industry Scam to gouge their customers, blame Obamacare for it, and prevent them from taking advantage of improved coverage and savings that the ACA actually provides.
And so far, you have to admit, this Scam has worked beautifully.  The White House has been rocked back on their heels not just by the rollout problems of (which is now actually working), but also by these Scammy "Cancellation Letters".
But now the charlatans behind the curtain are finally being revealed.
Donna received the letter canceling her insurance plan on Sept. 16. Her insurance company, LifeWise of Washington, told her that they'd identified a new plan for her. If she did nothing, she'd be covered. A 56-year-old Seattle resident with a 57-year-old husband and 15-year-old daughter, Donna had been looking forward to the savings that the Affordable Care Act had to offer. But that's not what she found. Instead, she'd be paying an additional $300 a month for coverage. The letter made no mention of the health insurance marketplace that would soon open in Washington, where she could shop for competitive plans, and only an oblique reference to financial help that she might qualify for, if she made the effort to call and find out. Otherwise, she'd be automatically rolled over to a new plan -- and, as the letter said, "If you're happy with this plan, do nothing."
If Donna had done nothing, she would have ended up spending about $1,000 more a month for insurance than she will now that she went to the marketplace, picked the best plan for her family and accessed tax credits at the heart of the health care reform law.
"The info that we were sent by LifeWise was totally bogus. Why the heck did they try to screw us?" Donna said. "People who are afraid of the ACA should be much more afraid of the insurance companies who will exploit their fear and end up overcharging them."
Donna is not alone.
No, she's not alone.  It's not clear how widespread this practice has been, but some State insurance commissioners are starting to notice. In Kentucky, Insurance Provider Humana was fined $65,000 for sending out misleading letters.
The Kentucky Department of Insurance has fined Humana $65,430 because it offered policyholders an unapproved opportunity to amend their insurance as part of a letter that regulators have called “misleading.” The department investigated letters sent in August to 6,543 individual plan policyholders in Kentucky. The letters said they needed to renew their plans for 2014 within 30 days or choose a more expensive option that complies with the Affordable Care Act.
But regulators last month called the letters misleading, arguing they did not make sufficiently clear that policyholders could compare and choose competing plans on the state’s health insurance exchanges, which open on Oct. 1, and for which they could be eligible for federal subsidies.
Let's follow this logically, if the letters were sent in August and required a response within 30 days - it essentially forced the policy holders to choose the worse possible option before the Oct 1st launch of their State Exchange. That is a classic "High Pressure" sales tactic. "Buy NOW or you'll miss out. SALE ENDING SOON" - when in fact, there was no legitimate reason to push people make a decision in that 30 day window other than to prevent them from shopping on the Exchange.
Read the Human Letter.
2,200 people actually did respond within that 30 period, but Kentucy regulators after finding they had been deceived by Humana released them from that agreement and allowed them to go ahead and shop for a better plan on the marketplace.  Then they fined Humana for their attempted Scam.
[Kentucky Insurance Commissioner Sharon] Clark gave the example of a single mother with children who was urged to sign up for a Humana plan with a monthly premium of $719.86. That price is higher than any comparable plan for sale on the state's insurance marketplace, Clark said -- not to mention that the mother might have qualified for tax subsidies to help pay for it if she went through the marketplace, as Donna did.
So the next time you hear or read about how ObamaCare has caused someone to lose their inexpensive plan only to be forced to choose a much more expensive one.  Don't Believe It. As  Adm. Akbar would say: It's. A. Trap!

8:42 AM PT: To be fair, as VcLib pointed out in the comments not every plan was automatically Grandfathered.  There were these restrictions via
All health plans must:

.End lifetime limits on coverage

.End arbitrary cancellations of health coverage

.Cover adult children up to age 26

.Provide a Summary of Benefits and Coverage (SBC), a short, easy-to-understand summary of what a plan covers and costs

.Hold insurance companies accountable to spend your premiums on health care, not administrative costs and bonuses
Grandfathered plans DON'T have to:

.Cover preventive care for free

.Guarantee your right to appeal

.Protect your choice of doctors and access to emergency care

.Be held accountable through Rate Review for excessive premium increases
In addition to the above, grandfathered individual health insurance plans (the kind you buy yourself, not the kind you get from an employer) don't have to:
.End yearly limits on coverage

.Cover you if you have a pre-existing health condition
So if you had a plan that had a lifetime cap, didn't cover your children until they were 26, could be arbitrarily cancelled and didn't spend 80-85% of your premiums on your care - that plan would have to be updated or replaced.  If you had a plan like that, and for some reason liked it then you were always going to have to make an adjustment to a plan that doesn't suck anymore.  The question is, would you be able to shop for the best possible option or would you stay with the options given by your current provider? These letters show that some providers tried to corral their clients into staying and accepting a much higher rate - blaming the ACA for it - and therefore scaring them away from the Exchange Marketplace. We've been hearing that the reason these plans were more expensive is because they had to cover preventive care (Limbaugh had a field-day with that one last week), but as shown above the Grandfathered Plans Didn't.
It's a scam, it's all a scam.
10:13 AM PT: One more issue on Grandfathered Plans via the Comments
Plans could acquire grandfathered status by adding those features to the existing ones, they did not have to already have them in place.  Some of the elements, like the "no lifetime cap" one, were phased in over time, and therefore explicitly allowed adjustment of benefits in an existing plan.  Coverage of children under 26 is not likely to be a feature that many plans had in early 2010, yet clearly insurance plans have added this feature.  My current coverage has grandfathered status.  It had some of these features, like no lifetime cap, other benefits have been added or modified to comply with the grandfathering requirements.
So, you got that?  Grandfathered Plans are not written in unbendable, unbreakable Adamantium, they can and have been amended since 2010.   They don't have to meet all the requirements of the ACA, just a few of them and have to have existed since before the law was passed and signed - That's All.
So let's go back and revisit "If you like your plan, you can keep it" as being flawed or wrong.  It's NOT.  Instead of amending the plans to meet minimum grandfather requirements they are being Shutdown By the Insurance Industries Choice, not by ObamaCare.

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