Mike Moyer is among an unknown number of Ohioans who recently found out they will not be able to keep their current health insurance plans because of the Affordable Care Act.
“I got a notice about three weeks ago that our policy would be canceled on Oct. 14 because it didn’t meet the standards,” said Moyer, a self-employed Famersville businessman who had coverage for him and his wife, Betty, through Reserve National Insurance Co. “I called them up and asked them why our policy didn’t meet the standards, and they said because it didn’t include maternity coverage.
“I’m 64, and my wife is 64,” Moyer deadpanned. “What in the heck do we need maternity insurance for?”
The Obama administration had to scramble last week to explain why so many people would have to change their insurance because of provisions in the Affordable Care Act. Numerous times going back years, President Barack Obama has repeated the phrase, “If you like your health insurance, you can keep it.”
In most cases, that is still true, because the law allows policyholders to keep plans that were in effect when the law was signed in 2010 — even if they do not meet the new requirements for comprehensive coverage.
But if changes were made to a policy after March 23, 2010, the plan would no longer qualify for grandfathered status and would have to meet the new benefit standards.
Dayton Daily News readers have contacted the newspaper expressing outrage that they are being forced to shop for health insurance because their current plans do not include such benefits as maternity and newborn care, mental health and substance abuse treatment and other core benefits required under the health care law.
Only about 5 percent of the U.S. population buys health insurance on the individual market, and only a small percentage of the estimated 12 million to 15 million self-insured policyholders will be forced to change policies because of the new law, according to the Obama administration.
The vast majority of Americans with employer-sponsored health insurance have policies that already meet the new law’s standards, government officials said.
Experts say there is no way to tell exactly how many will be affected. But up to two-thirds of individual policyholders move in and out of new policies annually, which could disqualify their grandfathered status.
While Ohio insurance companies that sell individual policies were quick to point out that they are not “canceling” policies, they acknowledged that at least some of their policyholders will have to switch from health plans that do not comply.
“Medical Mutual has not canceled any grandfathered individual policies,” said Don Olson, a spokesman for the Cleveland-based insurer. “We will work closely with our non-grandfathered individual customers to transition them into an (Affordable Care Act)-compliant policy that suits their needs.”
Those comments were echoed by officials at United Healthcare, which, along with Medical Mutual and WellPoint, control about 80 percent of the individual health insurance market in the state, according to the Ohio Department of Insurance. And it’s clear the insurers — who serve anywhere from 300,000 to more than 500,000 individual Ohio customers — want to keep as many of those customers as possible.
“Our customers in grandfathered plans can keep their current coverage without any additional changes required by the Affordable Care Act,” said Ellen Laden, a spokeswoman for United Healthcare, which serves about 1.2 million customers in Ohio. “Our customers in non-grandfathered plans can keep their current coverage and will be subject to any additional applicable ACA requirements.”
Savings or higher rates
Moyer said he was offered different options to upgrade to a new policy with Reserve National: “They offered us some other options, but they were all more expensive than what we had.”
But when the newspaper helped him view different options available through the federal government’s online marketplace, HealthCare.gov, Moyer discovered he could find better coverage for $100 less than the $800 per month he’s was paying for coverage. Moyer and his wife will be eligible for Medicare in about a year and were just looking for a policy to bridge the gap until then.
However, like millions of Americans, Moyer is frustrated because ongoing technical issues have prevented him from logging onto the website and shop for plans.
Government officials have promised to fix the problems by the end of the month, and they say in many cases, Ohioans who have been forced to turn to the marketplace will find better coverage at lower prices.
Any non-elderly adult earning up to 400 percent of the federal poverty — about $45,000 for an individual — can use a tax subsidy to purchase health insurance through the marketplace.
The nonpartisan Congressional Budget Office says one in six of the approximately 48 million uninsured Americans — including nearly 1.5 million Ohioans — will be able to find coverage for $100 or less per month in the marketplace, taking into account premium tax credits and Medicaid coverage, which was recently expanded in Ohio.
But for others — including self-employed entrepreneurs and young, healthy people, whose premiums are now the lowest in the industry — they’ll definitely end up paying more, said Kev Coleman, head of research at HealthPocket.com — a free website that compares and ranks health insurance plans available to an individuals.
“If you had a pre-ACA plan, you’re going to get broader benefits under the new law,” Coleman said. “But adding services increases prices, and many people are going to be unhappy with their larger exposure to cost sharing.”
That includes Sandy Osman, 52, of Kettering, who said she’s “angry and frustrated by the whole mess.” After two weeks, she finally gave up trying to enroll in the marketplace through the main portal for enrollment in Ohio and 35 other states. But she was able to review her options in the marketplace by calling the marketplace helpline.
“I have insurance through my job, and they told us that they were dropping our coverage at the beginning of the year and to go to the marketplace,” Osman said. “They told me the cheapest policy I could buy would cost more than $200 a month. I pay about $140 a month for insurance now, and my budget is tight. I don’t know if I can afford an extra $60 or $70 a month.”
Osman’s combined income from the alimony she collects from a recent divorce and her job at Wendy’s fast-food restaurant in Beavercreek pushes her over the income threshold to qualify for a tax credit subsidy.
“It’s really unfair,” she said. “I’m perfectly happy with the insurance I have.”
In recent days, President Obama and the White House have attempted to qualify his assertion that people could keep their health plans. They have noted the main reason people are being forced to purchase new coverage is that they chose to change their policies after the law was enacted and were no longer in grandfathered plans.
Even before the law took effect, a substantial number of policyholders were forced to switch plans every year, according to White House Press Secretary Jay Carney, noting that the U.S. Department of Health and Human Services issued a press release to that effect the same year the health care law was signed.
But, critics say, no matter how administration officials interpret the law, what President Obama told the American public about the law was, at best, inconsistent with actual results.
“The statements that were made were unambiguous, and it’s clear that those statements were inaccurate,” said Greg Lawson, an analyst at The Buckeye Institute for Public Policy Solutions. “Anybody who gets one of those letters that says they’re about to lose coverage has a right to be pretty angry.”
HealthPocket’s Coleman said the problem with President Obama’s assurances is they assume universal standards can be applied to an industry as fragmented as health care.
Guaranteeing standardizing health insurance necessarily hurt those consumers currently paying the least for coverage, while benefiting those paying the most or who were previously denied coverage.
“The individual and family insurance market is enormously diverse, and when you make reforms that go across an entire population, you’re going to have winners and losers just because our health circumstances vary so much among one another,” Coleman said.
But in the long run, standardizing health insurance could benefit everyone by holding down medical cost inflation and putting downward pressure on health insurance prices.
“By reducing the differences among health plans, it forces you to compete on price because if you’re no longer competing on benefits that’s what you’re left to compete with,” Coleman said.