Until the disappointing numbers were revealed about healthcare.gov signups a few weeks ago, most of the news about the Affordable Care Act (ACA, aka Obamacare) and its problems was anecdotal. We’ve all read and heard tales of individuals who were unable to sign up online, who faced higher premiums, or who were unable to keep their existing policies. I’d like to offer my own anecdote about that last problem, along with some conclusions.
Some background is in order. I’m self-employed and live in California. I have purchased an individual health plan from Kaiser Permanente since March 2009. I bought the insurance online though eHealthInsurance.com. My premium when I first got the policy was about $375 a month; in four years the premium has increased a total of about $100 per month. I’ve used the plan very little, but I am acutely aware of the value of comprehensive medical coverage. (If you know me personally, you know why; if you don’t, I’m happy to share offline.)
On December 10, 2010—less than nine months after ACA was signed into law—Kaiser wrote me a letter about how the ACA might affect my coverage. I underlined two phrases in this letter before putting it in my files: “[B]ecause you were enrolled in your current Kaiser Permanente plan on the day the health reform law was passed, your coverage is grandfathered”; and “If you want to stay in your current plan, rest easy—you don’t need to do anything.” The letter goes on to say, “By doing so, you may be able to keep your plan after 2014, at which point the market will function differently and health care choices may be limited.” (Italics mine.)
Kaiser admitted in this letter that it’s only sure of one thing: that my plan is grandfathered, because I already had it when the ACA was signed. Kaiser knew this almost three years ago.
Around August 1, 2013, Kaiser sent me another letter regarding the ACA. This one was more definitive: “Because you enrolled in your plan before the health care reform law was passed on March 23, 2010, you do not have to switch to a new 2014 Kaiser Permanente plan.” Later in the letter it says, “If you prefer to enroll in one of our new ACA-compliant plans … you can do so either directly with us or through the Health Insurance Marketplace during open enrollment which begins on October 1, 2013. All of our ACA-compliant plans include the additional benefits provided by health care reform.” (Again, italics mine.)
So to paraphrase: I now have the option of keeping my plan or shopping for a new one that complies with the ACA and that offers more benefits. Kaiser doesn’t say whether or not my exiting plan complies with the law, but it appears that doesn’t matter.
While this leaves me happy—no big changes for me, unless I want them—it also left me baffled by all the stories of cancellation notices. Are those notices only going to people whose plans were purchased after March 23, 2010? Or are insurance companies canceling non-ACA-compliant plans, even though they have the option of keeping them in effect?
If the first scenario is true—that the canceled plans were purchased after the ACA was signed into law—then the problem lies with the insurance companies, and maybe the buyers, but not with the ACA. The insurance companies should have told their customers when they bought the plans that the plans would end when this phase of the ACA kicked in. If the insurance companies did tell the buyers, then the issue lies with buyers who did not read the fine print. Because if Kaiser knew which of its policies were and weren’t grandfathered in August 2010, then every insurance company should have known.
If the second scenario is true—that some insurance companies are canceling non-compliant policies, even though the insurers could legally keep offering them—then, again, the problem lies with the insurance companies, not with the law. Because if Kaiser can offer me a grandfathered, non-compliant plan, can’t other insurers offer them to their customers?
A third scenario—one that happened to my wife—is also a possibility. Her insurer decided to stop offering policies in California under the ACA’s rules, so she needs to find new insurance. This a business decision on the part of the insurer—the kind of decision that insurers make every year, based on changing conditions and laws. I can’t see how the ACA is entirely at fault there; the fact that two dozen companies still choose to offer policies in California means that there’s still money to be made, and people to serve, here.
Tomorrow, I’ll share the conclusions I draw from my experience, along with an unexpected ending. Here’s the link to that post.