Thousands of Health Policies Cancelled Due to ACA Change
11/6/2013, 3 p.m.
When Alemaz Belay got a letter from Blue Shield of California last month, notifying her that her health care policy would no longer be effective come Jan. 1, 2014 “due to new requirements for health coverage under the Affordable Care Act (ACA),” and that her premium was going to increase, she was understandably upset.
“I thought the (health reform law) was going to make health care more affordable and not more expensive,” said Belay, 57, an Ethiopian-born single mother of three in the San Francisco Bay area.
One of the promises President Obama made when signing the health reform bill into law was that people who liked their doctor and health care plan would be able to keep them.
Belay (who declined to use her real name for privacy reasons) said Blue Shield notified her that her premium was going to increase from the current $402 to $586 a month. Her deductible would be $3,500 — twice what she is paying now.
Belay is among some 120,000 Blue Shield customers — which represent about 60 percent of its individual market — who received such a letter in recent weeks. Other insurance companies have cancelled policies, telling their customers that their existing policies fall short of the 10 “essential health benefits” the ACA requires all plans to include beginning Jan. 1, 2014, the day the health care law is fully implemented. Kaiser Permanente in California has sent notices to 160,000 of its customers who have individual plans, according to Kaiser Health News.
The new ACA-compliant policies, Blue Shield spokesperson Sean Barry pointed out, will be more comprehensive in that they will cover such benefits as prescription drugs, mental health treatment and maternity care.
Additionally, insurers cannot reject people with medical problems or charge them higher prices. It removes annual and lifetime caps on coverage of essential health benefits.
“The additional security offered by these benefits has a trade-off attached to it,” Barry said.
An estimated 14 million people — 2 million of them in California — buy their own health coverage because they don’t get it through their jobs. But because every individual is required to have health insurance come Jan.1, 2014, legal residents in California either will try to enroll in Medi-Cal – the health insurance program for low-income people — or buy their insurance on the online insurance market called Covered California. Those who buy their insurance on the marketplace could qualify for federal subsidies if their household income is between 138 percent and 400 percent of the federal poverty level — $21,400 to $62,040 for a family of two.
Barry said that if Belay and others whose policies have been withdrawn don’t take any action, Blue Shield will automatically move them into similar plans, some of which might be more costly, some less.
He said Blue Shield would like to work with their customers to help them remain with the company.
But Belay said the hike in her monthly premium is going to force her to shop on Covered California.