Saturday, November 16, 2013

Insurance Companies Caught Ripping Off Customers and Blaming Obamacare

Insurance Companies Caught Ripping Off Customers and Blaming Obamacare

posted by Salvatore Aversa

Republicans are continuing their attack of President Obama for policy holders that are being faced with cancellation through their insurance companies.  Most of the cancellations are due to “junk insurance,” which are plans that provided bare basic benefits, and if ever needed to be used for a serious illness, would be canceled.  There are gaps in the sensational headlines however that, while not as sexy, tell the rest of the story.
The Affordable Care Act sets standards.  Starting January 1, 2013, all new policies must meet a certain criteria in order to be legal.  Consumer standards are nothing new to the world.  Just like pieces of glass in our food or a car made out of sugar would not be legal to sell in United States, our insurance companies are finally being regulated so they can no longer advantage of consumers.
The people hold “junk insurance” policies that are being canceled are finding they are able to receive better insurance coverage, with more benefits, at the same price.  What’s more, with the available subsidies, many are finding their premium lower or even free.  Time after time, those who went on shows like Megyn Kelly and Sean Hannity to decry ObamaCare finally went to the Marketplace to view their options, they found they were wrong.
How insurance companies tried to pull one over on their policy holders was to inform them that their policies would no longer be valid “because of ObamaCare,” and their plan will turn into a higher priced one, sometimes 10 times their old rate.  They conveniently left out, however, that they had other options and would be able to find a comparable priced policy on or a correspondent state exchange.
Even this is not the full story.
The way the insurance companies informed their policy holders of their canceled policy, was to tell them to do nothing, and their old plan would automatically transfer to the new plan.  This deceived many in to believing they had to stick with their insurance company.  Some governors, I’m looking at you Rick Scott, required insurance companies that were canceling their plans to blame ObamaCare, even if that was not the reason at all.
All of this has led to stick shock and confusion among many.  Humana insurance in Kentucky is being sued for sending out 6,500 misleading letters doing just that.
Humana is neither alone nor the worst of the bunch, though.  According to
“Blue Cross successfully enticed tens of thousands of its individual policyholders to switch out of their grandfathered health plans and forever lose their protected grandfathered status,” states the lawsuit. “Blue Cross concealed information about the consequences of switching plans and intentionally misled its policyholders to encourage the replacement of grandfathered policies.

In California, 900,000 customers were canceled from grandfathered plans, and no, that isn’t a typo.  The canceled plans were “grandfathered” in, meaning that, while outdated, the plans were still legal and did not need to be canceled.  The insurance companies were doing this strictly to try and forced customers in to higher priced plans, thus keeping them away from the marketplace, while putting the blame on the ACA.  This is referred to as “twisting,” and under state law is illegal.  The Superior Court is pushing back on the cancellations, signaling pushback from consumers.
The plaintiffs, Paul Simon, 39, and Catherine Corker, 63, of California say that they are among the customers that Anthem Blue Cross pressured to drop their grandfathered policies in 2011 without giving them all the facts about new Obamacare requirements that could raise the price of their plans in an effort to cut its own costs. Simon and Corker would have preferred to remain on the grandfathered plans permitted by the law, and are now asking the courts to block Anthem from canceling any more policies unless the company allows consumers to switch back into their grandfathered plans.
“This is about an insurance company manipulating the situation and concealing the facts,” said William Shernoff, an attorney for both the plaintiffs, in an interview with the Los Angeles Times. “We are asking the court to give our clients and everybody else in the same situation the option of going back to their grandfathered policies.”
The letters that are being sent out by insurance companies are not proof that ObamaCare is a failure.  In fact, it is just the opposite.  Insurance companies are going to be insurance companies, and these actions just prove the need for extensive insurance reform.  There are talks of allowing junk plans to still exist.  If this happens, who will pick up the tab when one of these policy holders develops cancer, gets in a car accident, or anything else life throws at us?
Behind all of the crying of the Right and muted frustration on the Left is the desire for a single payer system.  The case on the Left is quite simple, we take care of our own.  There is a reason no developed country is moving towards our system of making an industry out of people’s health.  For the Right, they love to claim they are for small business.  What would help businesses more than not having to provide insurance?  Under a single payer system, everybody would be covered from birth to death by Medicaid.  The only thing holding the country back is the extreme paranoia on the Right.
Conservatism, by definition, means resisting change, and it is the Right that is currently hold us back from taking care of every citizen in the country.  Sad, for a party that claims to love god and family so much.  Then again, when have we ever expected consistency from a Republican.
California Department of Insurance announces that major insurance providers are delaying policy cancellations.

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