POLITICO So, what could go wrong next
More cancellations close to the election
Theres
another, separate issue with the cancellations. Some have actually been
pushed into next year, because some insurers have offered early renewals — in which individuals or small businesses who renew their policies before the end of the year can keep them into 2014.
For example, Elaine Buccieri of Arlington, Texas, was able
to get that kind of deal from Blue Cross Blue Shield of Texas. The
carrier just moved everyones anniversary date to December, giving them
more time in their old plans.
But that kind of renewal only carries people into 2014, raising the
possibility that those people, and small businesses, could just get
another wave of cancellation letters next year. And those letters would
have to go out early enough to give them time to sign up for new
policies — meaning they could go out in the fall, right before the
mid-term elections.
“This is really getting backloaded into December 2014,” said
Laszewski, who got an early renewal option with his own cancellation
notice from CareFirst.
Its not clear how widespread the practice is. A Commonwealth Fund blog post
said it has been allowed in states like Arkansas, Colorado, Montana,
Idaho and Kentucky, usually with some strings attached. And Sabrina
Corlette of Georgetown University, one of the researchers who wrote the
blog post, says more than 80 percent of small businesses in Wisconsin
have taken the early renewal option — and of the individual insurance
cancellation notices she was able to review, three out of four offered
early renewals.
The Obama administration fix could take care of some of the problem, because it allows
existing health plans to be renewed any time before Oct. 1, 2014. But
again, not all states will allow it, and not all insurers will do it —
so its not clear that the fix would take pre-election cancellations
completely off the table.
Sticker shock
Obamacare supporters are convinced that once people with canceled
policies can actually use the federal website, theyll be able to find
replacement health plans that are better and cheaper than what they have
now, not just the expensive replacements their own insurers are
offering up.
But Paul Ginsburg, president of the Center for Studying Health System
Change, says thats not going to be true of everyone. He says some
people will go to the website and be dismayed by the prices — because
they now have to include coverage of everyone with pre-existing
conditions, new benefits that werent covered by all individual plans
before, and a ban on charging older customers more than three times as
much as younger people.
That doesnt mean everyone will actually pay the sticker price. Many
people will qualify for subsidies, which could mask any increases. But
not everyone will get subsidies — a lot of people who will need coverage
will find that their incomes are too high.
Ginsburg says the Obama administration will have to do something
about “sticker shock,” but they wont be able to backtrack on covering
pre-existing conditions — thats too central to the laws goals.
The
limits on age-related pricing, however, are less crucial and could
probably be rolled back to reduce the prices, he said.
There could also be another level of sticker shock not just over the
premiums, but over the other out-of-pocket expenses people will have to
pay.
A good example is the deductible — the amount of medical expenses
someone has to pay before coverage even begins. All private health
insurance has deductibles — thats not unique to Obamacare. But a survey
of 22 health insurers in six states by Avalere Health, a consulting
firm, found that the average deductible is $2,550 in “silver” Obamacare
plans (the second-cheapest kind).
Thats compared to the $1,135 average
that nearly eight out of 10 people in employer-sponsored health plans
had to pay.
The deductibles are even higher in “bronze” plans, the cheapest kind.
The average bronze deductible was $5,150 — and some were as high as
$6,350.
“We all knew this was going to happen, but there could be another
round of shock” when people actually try to use their Obamacare coverage
and realize it doesnt pay for everything, said one health insurance
industry official. (Bad news continues...)
