For consumers whose health premiums will go up under new law, sticker shock leads to anger
Matt McClain/The Washington Post – Deborah Persico was recently informed that her health insurance plan was being cancelled. She learned that a similar plan will cost her much more.
The growing backlash involves people whose plans are being discontinued because the policies don’t meet the law’s more-stringent standards. They’re finding that many alternative policies come with higher premiums and deductibles.
A look at the consumer’s route through the HealthCare.gov website and the potential failure points.
After receiving a letter from her insurer that her plan was being discontinued, Deborah Persico, a 58-year-old lawyer in the District, found a comparable plan on the city’s new health insurance exchange. But her monthly premium, now $297, would be $165 higher, and her maximum out-of-pocket costs would double.
If the poor, sick and uninsured are the winners under the Affordable Care Act, the losers appear to include some relatively healthy middle-income small-business owners, consultants, lawyers and other self-employed workers who buy their own insurance. Many make too much to qualify for new federal subsidies provided by the law but not enough to absorb the rising costs without hardship. Some are too old to go without insurance because they have children or have minor health issues, but they are too young for Medicare.
Others are upset because they don’t want coverage for services they’ll never need or their doctors don’t participate in any of their new insurance options.
“There are definitely winners and losers,” said Sabrina Corlette, a senior research fellow at Georgetown University’s Center on Health Insurance Reforms. “The problem is that even if the majority are winners . . .they’re not the ones writing to their congressmen.”
The administration says that about 12 million Americans, or 5 percent of the population, buy individual polices — they don’t get coverage through their employers or programs such as Medicare and Medicaid. Millions of them will be required to get new policies, but many will qualify for federal aid to pay for the premiums. Thus, they will end up with better coverage at lower costs, officials say. If they are sick, they won’t be denied coverage or charged more.
But conveying such information is difficult because of the “calamitous” launch of HealthCare.gov, former White House senior adviser David Axelrod said Sunday on NBC’s “Meet the Press.” He said that “many of the people who have to transition are going to get better insurance for less money, but they just can’t tell that right now because they can’t get on the Web site.”
Republicans have showed little sympathy. Former Republican presidential nominee Mitt Romney, appearing on the same program, attacked Obama for his often-repeated pledgethat people would be able to keep their health plans if they liked them. Romney said that Obama has engaged in “fundamental dishonesty” that has “undermined the foundation of his second term.”
Marlys Dietrick, a 60-year-old artist from San Antonio, said she had high hopes that the new law would help many of her friends who are chefs, actors or photographers get insured. But she said they have been turned off by high premiums and deductibles and would rather pay the fine.
Her insurer, Humana, informed her that her plan was being canceled and that the rate for herself and her 21-year-old son for a plan compliant with the new law would rise from $300 to $705. On the federal Web site, she found a comparable plan for $623 a month. Because her annual income is about $80,000, she doesn’t qualify for subsidies.
A cheaper alternative on the federal exchange, she said, had a premium of $490 a month — but it was an HMO plan rather than the PPO plan she currently has. “I wouldn’t be able to go to the doctor I’ve been going to for years,” she said. “That is not a deal.”
And both the HMO and PPO exchange plans she examined had family deductibles of $12,700, compared with her current $7,000.
Robert Laszewski, an industry consultant, said he thinks the rise in rates was inevitable. The new law, he said, has resulted in an estimated 30 to 50 percent increase in baseline costs for insurers.
“We’ve got increased access for sick people and an increase in the span of benefits, so something’s got to give,” he said.
Beginning Jan. 1, the new plans must cover 10 essential benefits including pediatric care, prescription drugs, mental-health services and maternity care. In general, policies that don’t offer those can’t be sold after 2013. (Plans that were in place before March 2010 and essentially haven’t changed are “grandfathered” and allowed to continue.) Critics, such as Obama, say that the discontinued policies are too skimpy to offer real protections, but some consumers contend the plans meet their needs.
David Prestin, 48, who operates a gas station and diner at a truck stop in Michigan’s Upper Peninsula, was unhappy to learn recently that his premiums are slated to rise from $923 to $1,283 next year under Blue Cross Blue Shield of Michigan. The insurer said it needed to add maternity care to comply with the Affordable Care Act.
The issue of maternity coverage is a sensitive one for Prestin and his wife, Kathie. They had one child seven years ago, but after she had five miscarriages, they discovered she had an immune issue that prevented her from successfully completing a pregnancy.
At the same time, Prestin said, the new plan would reduce coverage for things he and Kathie need, such as free annual checkups.
The Prestins explored HealthCare.gov. They are not eligible for subsidies, but they found a cheaper plan than the one being offered by their insurer. However, there was another problem: It would have required the couple to switch from the doctors they have seen for more than 16 years and travel more than 100 miles from their home to the nearest major hospital center for treatment — in Green Bay, Wis.
“I pay my taxes. I’m assistant chief of the volunteer fire department here in Cedar River and a first responder for Mid-County Rescue,” Prestin said. “You try to be personally accountable and play by the rules, but the more you play by the rules, the more you get beat up on.”