Many Americans’ Insurance Cancelled Due To Obamacare
By Dr. James Palermo // October 30, 2013
ADMINISTRATION: OBAMACARE PROTECTS CONSUMERS BY ELIMINATING SUBSTANDARD POLICIES
ABOVE VIDEO: CBS reports on Obamacare forcing hundreds of thousands of Americans to lose their health insurance and onto the health insurance exchange marketplace for replacement policies.
With the focus on the opponents of the Affordable Care Act’s (ACA, aka Obamacare) impact on the government shutdown drama in the rearview mirror and the abject failure of the health insurance exchange website center stage since its attempted launch, the law is now also garnering wide spread coverage for something unrelated to troubles with its online insurance marketplace.
However, the reports are also negative, with many sources featuring stories that some Americans are learning they can’t keep their current plans because of provisions in the law.
POLICIES MUST INCLUDE ESSENTIAL OBAMACARE BENEFITS
Monday night, NBC Nightly News reported on “sticker shock” resulting from the ACA, as many Americans learned this week that the health insurance policies with which they were satisfied would be cancelled, primarily because their policies did not cover the essential benefits required under Obamacare.
With the online site expected to face difficulties through November and perhaps beyond, Americans may have only weeks to find replacement coverage, and many may end up paying higher premiums.
NBCNews.com reports that expert sources say, “Millions of Americans are getting or are about to get cancellation letters for their health insurance under Obamacare, and the Obama administration has known that for at least three years.”
The NBC report bases their claims on the fact that in ACA regulations from July 2010 there exists an estimate that there would be 40 to 67 percent “normal turnover” in the individual insurance market with the implementation of the law, and concludes that, “the administration knew that more than 40 to 67 percent of those in the individual market would not be able to keep their plans, even if they liked them.” Approximately 19 million people may be affected.
PRESIDENT RENEGES ON PROMISE
In 2009, President Obama promised, “If you like your health plan, you will be able to keep your health plan,” and in 2012 was still saying, “If you already have health insurance, you will keep your health insurance.”
The President’s pledge was a primary selling point of his signature healthcare legislation, aimed at calming consumers who feared being forced to give up policies and providers they liked as the program expanded coverage to many of the nation’s 48 million uninsured.
If the President actually knew what was in the law and deliberately mislead the American people on an issue so critical to the acceptance of healthcare reform, his credibility is in serious jeopardy. The infamous words of then Speaker of the House Nancy Pelosi, “We have to pass the bill so that you can find out what is in it,” were uttered on March 9, 2010 and the bill was signed into law by President Obama on March 23, 2010. Now, over three and a half years later, the Obama administration faces extraordinary multifactorial challenges in implementing the law.
ESTIMATED 1.5 MILLION HAVE ALREADY BEEN CANCELLED
It’s unclear exactly how many consumers with individual policies face cancellation of their insurance nationally, but some individual carriers have released data. Adding up recent media reports, the National Center for Public Policy Research discovered that at least 1.5 million insurance cancellations have already gone out. In Florida about 300,000 Blue Cross Blue Shield members have been affected.
It is clear that there will be some winners and losers as the Obamacare roll out evolves. To be sure, people who have faced challenges finding affordable health insurance in the past because of pre-existing conditions or low-income will have choices that, with subsidies, effectively meet their individual health insurance needs.
However, as recently reported on Bloomberg.com, according to Robert Laszewski, an insurance-industry consultant in Arlington, Virginia, “As many as 80 percent of people who don’t have a company-hosted plan or insurance through the Medicare or Medicaid government programs may have to find new health coverage.”
COUNTER POINT: OBAMACARE ELIMINATES SUBSTANDARD POLICIES
The administration and ACA proponents are aggressively pushing back against the multiple media reports that have featured a plethora of anecdotal cases in which Americans have lost their coverage and are faced with higher costs of insurance with Obamacare mandated benefits.
Facing questions today during the House Ways and Means Committee’s inquiry into the Obamacare website failure, Marilyn Tavenner, who runs the U.S. Centers for Medicare and Medicaid Services (CMS), referred to individual health insurance coverage in the pre-Obamacare era as frequently inadequate. She said the plans being cancelled are inferior to the coverage being offered on the exchanges because they don’t provide the minimum benefits required by the law, insisted that the mandated benefits in the law appropriately “protect” consumers and the policy premiums with subsidies will, in many cases, be less expensive.
The health-care law eliminates “substandard policies that don’t provide minimum services,” said White House spokesman Jay Carney yesterday, adding that, “The “80-plus percent” of Americans with employer plans or covered by government programs are unaffected.”
WILL MINIMUM ESSENTIAL BENEFITS SIMILARLY AFFECT THE EMPLOYER MANDATE?
That raises another question that the Obama administration may not want to address at this time. By executive order the employer mandate was postponed until January of 2015. What revelations related to the mandated benefits of employer offered policies will emerge by then? How much more costly might the employer health insurance offerings have to be to meet the provisions in the ACA? And finally, will employers strategically move people off of full-time rolls or lay off employees to compensate for higher health insurance costs?