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Policies canceled in latest hurdle for health care law

The rollout of the Affordable Care Act is leading to the cancellation of hundreds of thousands of health insurance plans nationwide, contradicting President Obama’s repeated pledge that people who like their coverage can keep it.

The cancellation notices started to arrive in recent weeks, compounding the political headaches for the White House from the troubled start of its health insurance exchange, the federal website created to give millions of people access to new plans by Jan. 1.

The cancellations come as a result of the 2010 Patient Protection and Affordable Care Act, which says that health insurance policies that fail to offer added benefits, such as prescription drug coverage and free preventive care, can’t be sold after this year even if they’re cheaper. With the online site expected to face difficulties through November, Americans may have only weeks to find replacement coverage, and many may end up paying higher premiums.

“I keep playing that over and over in my head: that you can keep your health plan, period,” said Terri Flay, a Manassas, Va., woman whose policy is being canceled, referring to Obama’s pledge. “But it isn’t ‘period.’ They put a gun to my head saying that I have to pay more because I need the health care insurance.”

The health care law eliminates “substandard policies that don’t provide minimum services,” said Jay Carney, a White House spokesman, in response to the cancellations. The “80-plus percent” of Americans with employer plans or covered by government programs are unaffected.

Obama’s oft-repeated pledge was a central selling point of his health care overhaul, aimed at calming consumers who feared being forced to give up policies and doctors they liked as the program expanded coverage to many of the nation’s 48 million uninsured.

While it’s unclear how many consumers face cancellation of their insurance nationally, some individual carriers have released data.

Florida’s Blue Cross Blue Shield, for instance, said about 300,000 members are affected while California’s Blue Shield and Oakland-based Kaiser Permanente will withdraw policies for a combined 280,000. Highmark Health Services of Pittsburgh said 40,000 customers will need to find new plans. CareFirst Blue Cross Blue Shield sent notices to more than 70,000 customers in Maryland, Washington, D.C., and Virginia that their current plans don’t comply with the law.

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, said Robert Laszewski, an insurance-industry consultant in Arlington, Va. About 19 million people are included in this market.

Plans bought before March 23, 2010, when the law known as Obamacare was enacted, can stay in effect under a “grandfather” clause.

In California, the insurance shift will affect about 2.5 percent of Kaiser Permanente’s members, said Won Ha, a spokesman for the insurer. About 600,000 to 700,000 consumers statewide who have individual health plans will be affected, said Peter V. Lee, the director of Covered California, the state’s health insurance exchange. About one-third will receive government subsidies to pay for the new plans or be eligible for Medi-Cal, the state’s health coverage for the poor, he said.

Federal officials should have worked more closely with insurers to better manage the long-coming shift to new coverage, said Erik Gordon, a professor at the University of Michigan’s Ross School of Business.

Instead, “the first thing you get that affects you personally is that you’ve lost your health insurance,” Gordon said in a telephone interview. “That approach is going to backfire politically.”

Republicans seized on the issue, citing Obama’s statements that no one would lose their current plan.

“Probably no pledge made to sell the bill was more disingenuous than this one,” said Brendan Buck, a spokesman for Republican House Speaker John Boehner of Ohio, in an email. “But it’s more than just a broken promise; it means a significantly higher health insurance bill for far too many.”

The law requires all Americans to be covered next year or pay a penalty. Those who want plans that begin Jan. 1 must enroll by Dec. 15 – either by mail, phone or the exchanges.

The administration yesterday said half of eligible adults younger than 34, the group most likely to be uninsured, can find coverage on the federal exchange for $50 a month or less. One million more may qualify for expanded coverage under Medicaid, according to a report by the Department of Health and Human Services.

For Ian Hodge, 63, of Lancaster, Pa., the issue is all about getting the same care from the same doctors. When he learned his policy was canceled, his reaction was “surprise and disgust,” he said.

Hodge said he tried 10 times to get information about a new policy Oct. 1, the day the online federal exchange went live. He’s still trying to figure out his options, he said in a telephone interview.

“The website is not very clear,” Hodge said. “I’m concerned about being able to get affordable health care that’s at least as good as what I had previously.”

Hodge and his wife, Sara, who also is 63, paid $1,041.85 a month for a plan offered by Highmark, he said. They like the care, their hospital and the doctors, and they worry they won’t be able to keep them under a new plan.

“I had heard the repeated assurances by the president and people who work for him that if you have health insurance, don’t worry, you’ll be able to keep your health insurance,” Hodge said in a telephone interview. “Well, that’s clearly not true. I wasn’t allowed to keep my health insurance.”

Amid the rush to open the exchange on time, the consumer “was probably in last place,” on the priority list for the administration, said Marc Pierce, the founder of Chicago-based Stonegate Advisors, a communications consultant to insurers.

Not all consumers will be losers under the new system. Barbara Wynkoop, 62, of Trexlertown, Pa., said she expects to find a cheaper plan on the exchange, thanks to subsidies and new coverage for her cholesterol medication. She pays $278 a month now for a policy that Capital BlueCross of Harrisburg plans to discontinue.

“The chance for me to save money and still have decent coverage, what my basic needs would be, I’m happy about that,” she said by telephone.

The impact on individual premiums will vary based on age, benefits and location, Kaiser’s Ha said in an email: “In general, older beneficiaries will tend to see lower rates or modest rate increases relative to their prior coverage,” he wrote. “Younger beneficiaries, particularly those who had very lean benefit plans, may have significant increases.”

Lee, of Covered California, said he didn’t think the president’s pledge was misleading, though “it was overly broad. The reality of the Affordable Care Act is if you have employer coverage, you keep it. If you have Medicare, you keep it. The individual market is being dramatically reformed and it’s changing for both the uninsured and insured.”

While some people may pay more, they’ll find the added benefits mean it’s health coverage they can rely on, Lee said.

“From Day One, the Affordable Care Act reforms the individual insurance market,” he said. “Insurers have to take everyone, which for some people may raise the rates a little bit. But it means they have security going forward. You might want to be a risk taker and say ‘I don’t want an airbag.’ We say airbags are a good idea.”

Obama risks a backlash over the cancellations if Americans think he broke his promise they could keep their coverage, said Bill McInturff, a Republican pollster who consulted for President George W. Bush.

“If Americans conclude that’s not the reality under the Affordable Care Act, support will plummet,” he said.

Democratic pollster Geoff Garin, who worked for Hillary Clinton in 2008 and for advocates of the health law during congressional debate, said Obama’s repeated reassurances addressed the anxieties of swing voters whose support was critical to passage of the law.

The cancellations affect “a distinct minority of voters,” Garin said. By the time of congressional elections next year, voters will judge the health care law based on how they feel about their new coverage, regardless of the old, he said.

“At the end of the day, different is not the important unit of analysis,” he said. “Better or worse is the important unit of analysis and people will figure that out in the next year or so.”

Legacy Comments27

further proof that those that worship BIG govt have absolutely zero capability in actually running one. No budget in 4 years should have been your 1st proof

I for one would like to hear form the insurance companies explaining just what resoning caused them to cancel exisiting policies. Was it the ACA requirements or profit?

a quick read of the internets thingy will tell you - YES - it is the democrats NObamaKare fault

They are cancelling the policies because they do not meet the very narrow guidelines of Obamacare. 93,000,000 Americans are poised to lose their present policies in 2015 for things like a higher deductible or a change to prescription drugs. The federal register shows that to be the absolute truth. Here is a Forbes article as a citation of the truth of Obamacare. It has nothing to do with profit! It has to do with the lies from Obama and progressives as they rammed this piss poor program down our throats......the facts as the facts and the mainstream press knew this two years ago, Obama knew if from the start so he LIED. But somehow, you progressives will say: "well, but he meant to say" or "well we will all be better off anyway". There is nothing any more disgusting than a liar. Period. Obama can you defend that.

Here is the truth about Obamacare from Forbes citation on my post below

This is not just a few policies which are bare bones and this is not phony outrage. Section 1251, hidden deep in the law allows the Obama administration to invalidate even employee plans, that is correct as many as 93,000,000 people will lose their employer provided insurance. If your employer raises your deductible, changes the drug plan or makes any change, it can be invalidated. This is really contrived, passed in the middle of the night, over 2000 pages, partisan, back room deals and now we all know why Obama let the employer mandate go another year. This bill is horrible and the people who continue to back up Obama and this bill lack ethics, character and intellectual honestly.

A Truly Wicked Blow: Jimmy Carter Hammers Obama for Ineptness the Monitor can interview Shaheen and ask her to explain that would happen.

The policies referenced here are the bare-bones policies which usually offered no hospitalization, no drug coverage, no preventative care coverage. A major illness such as cancer would result in the patient's bills being paid by the rest of us--as if they had no coverage at all. This effects only those who buy individual insurance polices of the lowest level. But yes, it is true that if you had one of these policies, it is being dropped to comply with the ACA.

not true...

Exactly. Those insurance policies were largely inadequate. Yes, they've been discontinued, but they were hardly worth the money in the first place, and what people can now get in the marketplace will be more than adequate. Most people who only had those bare-bones policies will qualify for subsidies. Yes, some will pay more. Some will pay less. But regardless, I truly think that at the time the President made those statements, he believed them. Of course there's no way to prove that, and there are some who will never believe it. Nothing anyone can do about that. In a year or two things will have settled down and the vast majority of people will be happy (or at least satisfied) with their insurance situations. And costs will stop rising and perhaps even come down because more people are covered and the insured no longer have to subsidize the uninsured.

not true....

Maybe you can explain to us FOF why folks who have policies that do meet their needs are also seeing their plans drop. As far as costs dropping with the ACA, maybe you could also explain to us how the networks will manage to keep costs down if folks do not sign up for insurance. Also, explain to us how a cheaper premium and higher out of pocket expense reduces your costs. Also explain to us how the middle class folks, who do not qualify for a subsidy, had their insurance dropped, will get insurance they can afford. You sure do leave out a lot.

Let me get this straight Gen Xer. Folks buy health insurance that does not cover hospitalization, no drug coverage and no preventative care? Why would anybody pay for an insurance policy that covers nothing?

Yes, Rabbit, folks bought policies with all kinds of big gaps in it. Why? I suspect for several reasons: 1) they did not read the fine print in the policy 2) they could not or would not pay for a more comprehensive policy 3) they had no idea how fast health care bills could pile up. Who knows? The ACA requires every policy to offer a basic level of coverage for the protection of the policy holder (to ensure they receive at least adequate health care) and for the protection of the rest of us (to ensure we don't get stuck with someone else's medical bills).

more of the democrats rhetoric talking points heard all over leftist media - as usual no statistical facts to back up their usual statements. if you are a reader and do not know where this is headed then you probably don't remember when that "WE TOLD YOU THIS WOULD HAPPEN". Do readers remember that NObama illegally gave waivers to congress, business and unions? - Guess why.

No, not all of them are. So please stop parroting the Obama propaganda. You major illness argument is moot as now we will all pay for those exchange patients. Six of one.

Hey Van, GWTW and Sail did you ever notice that when a story like this appears, the usual progressives never comment. This exposes what a liar Obama really is. He stood on the stage with Romney and denied that this would ever happen. Monday we learned that he knew all along and hid it from us, like he wanted to hide the high cost of insurance which is want really crashed the Obamacare site.

Spare us the phony outrage. "The accurate statement should have been: 'If you’re one of the 95% of insured Americans with health coverage through your job or the government, then your plan won’t change.  If you’re purchasing a plan in the individual market, and that plan remains unchanged, you’ll also be able to keep it.  But if you’re non-group plan changes for the worse, it won’t be offered once the new law kicks in.' It’s awfully hard to separate substance from politics right now, but this is just a simple adverse selection problem.  You can’t have a sustainable national health care system wherein people are allowed to impose their health costs on others, just like you can’t have an auto insurance system with uninsured drivers.  The key to understanding this part of the law—and again, we’re abstracting from the politics for a moment—is that the word “insurance” implies a standard level of coverage that avoids the type of cost shifting that occurs when an un- or under-insured person gets sick. The individual market is fraught with such plans, and many are inconsistent with the ACA.  So they can’t be offered under it."

Actually Bruce your post is filled with quite a few statements where you dug your hole deeper. If you are one of the folks who have insurance through your job, your plan will remained unchanged. That is false. Many businesses are dropping their plans or just insuring the employee and not the spouses or families. Also, if your job elects to keep their insurance, your cost for that insurance will go way up. I call that change. The ACA is imposing health costs on others. Mainly the young and the middle class. They will be the ones who pay for the folks who get subsidies. The wealthy will not be affected. Small business will be hurt the most. And if you are lucky to have a Cadillac health plan, that plan will be taxed, and that cost will increase your premium. That is why unions are against this. Folks will be put on part time hours. Business will outsource their jobs with temps. Yeah this will work. NOT! Many folks have bare bones plans they are fine with, especially young folks.

RabbitNH, some people see inequity and unfairness around every corner and they react in inappropriate ways. They are looking for equal sacrifice and spreading the pain regardless of their contribution vs the contribution of others. It is petty, small, small minded and it is more about dishonest ideology than anything else. What he did make was the point of not being able to have a sustainable health care system if others impose the cost of their care on others. Yet, that is what Obamacare does.....imposes on those who already have healthcare, costs to cover those in exchanges. The other part which is not true is that people with company plans ARE being affected on choice and cost. Obama lied, progressives just can't handle the truth.

Imagine the disaster this would be if NObama didn't give waiverS to congress , unions and business - KAPOWEEEE

Correct Bruce....."You can’t have a sustainable national health care system wherein people are allowed to impose their health costs on others" but that is exactly what Obamacare does.

This is how the serial liar and worst president ever-Barack Obama is going to try to push for Single Payer Healthcare because Obama is going to take one last attempt at fooling the American people into going for something even worse than ObamaKare. My hope is that once people will see that Obama has been lying to them all all along they won't fall for Obama's lies any more. In the mean time we need to vote out rubber stamps Jeanne Shahhen, Annie Kuster, and Carol Shea-Porter in November 2014.

If you don't know by now that NObama and the democrats constantly LIE to you then you are in massive denial and you should attend a meeting of NObamaholics Annoymous

how did you think millions more people were going to covered?? By you paying less?? paying for stuff you dont's worse than a tax. But, all that many more times do we have to point out this Obama fellow is just an outright know, without being called a racist?

Obama knew he was lying to us when he was telling us: "If your liked our doctor you could keep your doctor, period." "If you liked your health insurance you could keep your health insurance, period."

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