You’ve seen it on the news, read it on the paper, and have neighbors yelling “Hide yo’ kids, hide yo’ wife, they’re cancelling everyone’s health insurance plan over here!” Scratching your head thinking why? Now what? Wait…I thought I could keep my plan?!
Under Obamacare (ACA), the current “individual market” doesn’t work for many who don’t receive coverage through an employer, specifically those who were older or with pre-existing conditions. Those with pre-existing conditions were often declined coverage, charged more, or had their conditions excluded from coverage. Various policies were so feeble they only provided the barest of coverage when someone did fall ill.
Beginning Jan. 1, insurers can no longer reject people who are sick or egregiously charge them more than the healthy under the ACA. They must also beef up policies to meet minimum standards and add benefits, such as prescription drug coverage, maternity care and mental health services.
First and foremost, your plan most likely wasn’t compliant according to federal health law. For example, one policy being discontinued by Florida Blue didn’t cover hospitalizations or emergency room visits and paid a maximum of $50 toward doctor visits. Your plan may have had deductibles and other potential expenses—such as copayments for doctors and hospital care—that exceeded the law’s annual out-of-pocket maximum of $6,350 for individuals or $12,700 for families. Insurers may have just decided to end certain types of policies, something they have always had the ability to do. Some policies that fail to meet the law’s standards can still be sold, but only if the insurer decides to continue them and they’re “grandfathered,” meaning you purchased one before March 2010 and neither you nor the insurer has made any substantial change since then. Adjusting an annual deductible, which many people do each year to keep down their premiums, is a change that could end grandfathered status.
You got a notice, what should I do now?
You should scrutinize the terms of their soon-to-be-discontinued policy and compare them with what new policies offer. The monthly premium is just one factor in cost. Also note the deductible. Is it per person? What is the maximum deductible if two or more family members fall ill in the same year? Finally, note the annual out-of-pocket cap, which is the maximum you pay in deductibles and co-payments for medical care during the year.
Some insurers are recommending new plans that are most similar to the one being discontinued, and could automatically enroll you in such a plan if you take no action. Those are not your only options. You should double-check and compare a range of plans. An independent broker can show you plans from various carriers. You can also check your state’s online marketplace or log onto or call healthcare.gov, the website serving 36 states that opted not to create their own marketplaces. While consumers are having trouble creating accounts through healthcare.gov, the website now allows shoppers to browse health plans without creating an account.
Jeffrey R. Ungvary