The Trainwreck

Obamacare. What a trainwreck. The website is a disaster, and now we learn that 137,000 WNY health insurance policies are going to be canceled. This is why the complete government takeover of healthcare in this country – the socialization of medicine – is such a Kenyan/Mohammedan/Indonesian catastrophe. 

This is what the people who shut down the government say, and want you to think. These are the opinions held by the people who threatened default on our sovereign debt and have worked tirelessly for three years to sabotage health insurance reform in this country. 

The Buffalo News’ Washington correspondent Jerry Zremski wrote an article appearing today, outlining that 137,000 WNY health insurance policies are going to be canceled, in direct contravention of President Obama’s promise that, “if you like your insurance, you can keep it”. 

Cancellations! When you buy a policy on the individual market, you’re buying a 12-month contract, and if the policy doesn’t meet  Obamacare’s bare minimum standards, the insurance company is compelled to cancel it. It can offer you a new policy, or you go to the New York health insurance exchange and shop around for something else. 

Obamacare’s promise omitted a detail affecting a fraction of the 5% of Americans who buy individual policies – you can keep your insurance if you like it, and it meets the minimum requirements of the Affordable Care Act. Not all policies do. Furthermore, the types of policies being canceled are exclusively ones sold to individuals, not groups. This represents 5% of all health insurance policies sold in the United States, and of those perhaps 65 – 70% of policies cannot exist after January 1st because they don’t meet the bare minimum of what constitutes an insurance policy. 

There’s a reason group policies offer more coverage than individual ones. Volume gives you more for less. Starting January 1st, health insurance policies need to cover pre-existing conditions; if it doesn’t, it’s going to be canceled. Starting January 1st, health insurance policies can’t have a lifetime cap and need to cover lots of things that cut-rate rip-off policies didn’t. 

Now, your policy has to cover preventive care with no co-pay; policies that don’t will be canceled. Now, your policy has to cover maternity care; policies that don’t will be canceled. Now, your policy has to cover mental health care, substance abuse care, lab services, prescription drugs, pediatric oral and vision care, hospitalization, and emergency care; policies that don’t will be canceled. 

That’s the story – that Obamacare finally protects the health insurance consumer from cut-rate insurance, and because of the mandate, all individual policies are treated like group policies. 

Trainwreck? 

The federal exchange website was so bad that only six people signed up the first day. At first glance, that seems horrible. But six people is six more than Republicans wanted to see signed up – that’s infinity percent more. That doesn’t apply in New York, which has its own website, which had its own short-lived problems, but is now working about as well as any high-volume site. Socialization and government takeover of care? That must be why the policies sold in New York under Obamacare come from the same private insurance corporations that sell policies now. 

Jerry Zremski’s article contains salient details about why policies are being canceled, but whoever wrote the headline is deliberately misleading people. Scaring people sells papers. 

At least 137,000 people in the eight counties of Western New York have received, or will soon receive, a notice that President Obama said they would never get: a notice that their health insurance is being discontinued, and that they’ll have to shop for another plan.

That’s the number of people who get insurance from Buffalo’s three major insurers who are destined to get the government-mandated letter, a jargon-filled tome that one local insurance executive called “a 14-page packet-o-whacket.”

But one line of one version of the letter, which is being sent to people all around the country, is clear.

“Your current plan will cease upon your anniversary date,” said a letter sent to one subscriber in Washington, D.C.

Contrast that line with the words of the president.

“If you like your insurance plan, you will keep it,” Obama said shortly after the Affordable Care Act, his signature health care reform law, was passed in 2010. “No one will be able to take that away from you. It hasn’t happened yet. It won’t happen in the future.”

It’s happening, though, to approximately 12.5 percent of those at BlueCross BlueShield of Western New York, Independent Health and Univera Healthcare, according to numbers the three insurers provided to The Buffalo News.

Under the Affordable Care Act, insurance policies that existed as of March 2010 could be “grandfathered” into Obamacare, so long as they didn’t change significantly in substance and cost; hence, “you can keep your policy if you like it”. But if your policy is being canceled, blame the private insurer. They changed something. 

And it’s happening for a reason, Obama said in a speech last week in Boston. The law now prevents insurers from offering “substandard” plans, he said.

“One of the things health reform was designed to do was to help not only the uninsured, but also the underinsured,” Obama said.

Zremski’s article goes on to explain the following: 

• – Healthy NY is changing and adding coverages to comply with the law. People affected will be able to sign up via the NY State of Health program, where people may qualify for generous federal subsidies or even expanded Medicaid coverage. 
• – Some smaller group policies have to change and add coverages to comply with the law. 

Why, even Chris Collins – who is a multimillionaire Congressman who just a month ago helped to shut the government down in a failed effort to halt Obamacare – complains that his companies can no longer offer cut-rate insurance to its employees. Now, these employees have a right to insurance that includes hospitalization, prescription coverage, emergency services, and mental health coverage. Lashing out at the President, Collins does his best impression of “noblesse oblige”, complaining about how his company is going to manage to offer these new coverages. 

The cancellation notices are a feature of the Affordable Care Act, not a bug. The idea was to make insurance coverage more robust — and that means cancelling policies that offer less thorough coverage…

…The whole idea of the insurance expansion isn’t to get Americans to purchase anything called “insurance.” It’s to get them to purchase a specific kind of insurance, a plan that is relatively comprehensive and helps protect against financial ruin. If Americans were going to be required to buy a product, the reasoning goes, it should be one that can actually do some good.

Look at the pre-Obamacare individual insurance market this way: 

The average monthly premiums of the five cheapest plans [in Irvine, California] is $114. So I took the middle plan, HealthNet’s IFP PPO Value 4500. It’s got a $4,500 deductible, a $2,500 deductible for brand-name medications, huge co-pays and a little “bestseller” icon next to it. And it’s only $109 a month — if they’ll sell it to you for that price.

That’s the catch, and it’s a big one. Click to buy the plan and eventually you’ll have to answer pages and pages of questions about your health history. Ever had cancer? How about an ulcer? How about a headache? Do you feel sad when it rains? When it doesn’t rain? Is there a history of cardiovascular disease in your family? Have you ever known anyone who had the flu? The actual cost of the plan will depend on how you answer those questions.

According to HealthCare.gov, 14 percent of people who try to buy that plan are turned away outright. Another 12 percent are told they’ll have to pay more than $109. So a quarter of the people who try to buy this insurance product for $109 a month are told they can’t. Those are the people who need insurance most — they are sick, or were sick, or are likely to get sick. So, again, is $109 really the price of this plan?

Obamacare doesn’t take pre-existing conditions or family medical history into account – everyone gets coverage. If your policy was cheap because it only accepted healthy people, it’s going away. 

This 137,000 number is going to be used as a sword against Democrats and the President for a few years. It’s regrettable, because the Obamacare exchanges in New York are going to offer many people better coverage at an affordable rate – oftentimes subsidized. When the scaremongering dies down, people will find that they enjoy having a policy that covers that unexpected hospitalization rather than trying to pay out-of-pocket. People will find that paying for insurance is better than medical bankruptcy, just like having 3rd party bodily injury coverage on your mandated auto plan is better than hiring your own lawyer and selling your house to pay a judgment. 

The story? 137,000 western New Yorkers to get better coverage through a new plan at affordable rates.