A THCB reader writes in with a question and a pretty disruptive suggestion. @NorCal Exchange writes:
“I’m a small business owner. I’m also a card-carrying Democrat. Frankly, I’m pretty pissed off about the way things have gone with this roll-out so far. This was our one chance to get health reform right. And from what I can tell, we’ve totally screwed it up. Here’s one more thing a lot of the media coverage is missing. Even though THCB readers understand how open enrollment works, I’m guessing a lot of ordinary Americans don’t realize that under the new rules once they’ve applied for coverage they’re basically stuck with what they’ve got until the next enrollment period. This was a pretty big change in the first place. With all of this insanity, I’m guessing people are probably not reading the fine print and don’t know they’re locked in.
My prediction: there are going to be a lot of really unhappy people in the early part of 2014, when people realize what they’ve gotten themselves into. Why not allow people to change their plans? If you want an Amazon.com for healthcare, make the market for health insurance the same way as the market for anything else. If people decide to upgrade their coverage let them. If they get pissed at UnitedHealth’s customer service, let them cancel their policy and switch to AETNA or CIGNA. If I’m an idiot and don’t want preventative coverage let me build my own plan. If I’m worried that my daughter might get cancer let me add the Mayo clinic to my network. If my kid plays sports, let me add better ortho coverage. Yeah. Yeah. I know. This will turn the traditional underwriting model upside down. And a couple of health plans may even go out of business. But so what? My business may end up going out of business. These guys are smart. They’ll figure out twenty new ways to make money and they’ll end up thanking us for disrupting their precious monopoly …”
Filed Under: THCB
Tagged: ACA death spiral, Cancellation, Free Market, Health Plan Business Models, Open Enrollment, Underwriting
Nov 16, 2013
Facing a revolt by Democratic lawmakers unhappy with the rollout of the health law, the Obama administration announced this morning that it will allow insurers to renew cancelled health plans that fail to meet the standards set by the Affordable Care Act.
Insurers will be required to notify customers with cancelled plans that they have the option of upgrading to an ACA-compliant plan. Plans can be extended through the end of 2014.
The decision does not impact new customers who will still be required to buy coverage that meets the stricter standards set by the new health law – either on the exchanges or directly from an insurer.
The move is likely to add additional confusion and uncertainty to an already chaotic marketplace shaken by the widely publicized problems at HealthCare.gov.
It is unclear, for example, how the customers of specific health plans who have already had their coverage cancelled will be impacted. The decision of whether or not to reinstate individual plans is being left up to individual insurers.
Exactly why they’d want to reinstate the cancelled plans isn’t obvious. Five million people have received cancellation letters according to one recent estimate.
Health plan insiders have argued for months that reversing course will be difficult, if not impossible, for plans that have built their actuarial models on the assumption that certain numbers of healthy people will enroll by certain dates. Industry representatives immediately warned that the impact would likely be higher premiums.
In a letter sent to state health insurance commissioners this morning, Center for Consumer Information and Insurance Oversight (CCIIO) director Gary Cohn spelled out the details of the fix. A plan must have been in effect on October 1st, 2013. Health plans must notify consumers in writing of their eligibility for an ACA-compliant plan. And they must explain what they’re not getting. A request that, in effect, asks insurers to advertise the Obamacare plans, something they haven’t exactly been enthusiastic about doing in the past. That may or may not turn out to be a smart move.
Health plan consultant Robert Laszewski – a frequent THCB contributor – warned:
This means that the insurance companies have 32 days to reprogram their computer systems for policies, rates, and eligibility, send notices to the policyholders via US Mail, send a very complex letter that describes just what the differences are between specific policies and Obamacare compliant plans, ask the consumer for their decision — and give them a reasonable time to make that decision — and then enter those decisions back into their systems without creating massive billing, claim payment, and provider eligibility list mistakes. This puts the insurance companies, who have successfully complied with the law, in a hell of a mess.
Continue reading “You Can Keep Your Plan. Maybe.*”
Filed Under: THCB
Tagged: AHIP, Cancellation, Non-compliant plan, Obama administration, Obamacare Fix, Renewal, THCBist
Nov 14, 2013