Why Can’t I Change My Plan?

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 …”

19 replies »

  1. Well said. I am also a small business owner, in California (which I can only speak of) there are millions of angry folks. Personally, the only reason I was pulled into this mess is because my previous provider pulled their coverage from California, completely…100%. I was forced to switch. Not only had I hit my out-of-pocket maximum within the first two months of the year on the existing plan due to surgery, they stopped coverage in an instant; meaning no physical therapy. The new plan I selected was based on research I had done to ensure my doctors and therapist were ‘in network’. Only once I received my new insurance card, did I realize they had pulled a bait and switch move; telling me that my plan, in fact, was not ‘in network’ after all. I also am ‘stuck’ with this plan until open enrollment. I’ve gone round and round with them, to no avail. Keep in mind that my new plan is close to 3 times the cost of the old plan (premium). Now I get to start a new out-of-pocket maximum. This shoulder surgery will end up costing me $15,000.00 – in addition to the $7,500.00 in premiums.
    What a pathetic joke. Anyone involved in this should be embarrassed and ashamed. All the while, they are patting themselves on the back…. RIDICULOUS! Anger does not begin to describe my feelings.

  2. I just found out that I cannot switch my lousy health plan. they have to drop me in order to do so and if I stop paying them. I get penalize.
    on my lousy health care my regular doctors request payment in front and I have to deal to be reimbursed , they even stop taking health plan.
    this is a mess. I don’t know what is the congress doing?? I am very angry.

  3. Sam, you’re not just paying for mental health you’re paying for pre-exist, free check ups, women not being rated higher than men, no life time maximum, etc.

    I’m not a fan of the new law but it does make some popular mandates to plans that people never were included in before.

    Have you been able to get on the web site and get an idea what an exchange plan for the family will cost? Will you qualify for a subsidy? If you’re having trouble buying a plan it may be that you get the subsidy.

    The ACA was never meant to lower the cost of insurance – thank intense lobbying from industry for that.

    I’d be interested in what type of plan(s) you had before the cancellations – coverage, cost, deductible, etc.

  4. I am shocked how bad the plans are under this new law. In my family, we have 3 individual health plans. All three have been cancelled because of this law and now to get a similar plan, it is going to cost twice as much and the deductible will be higher. The affordable care plans are actually worse than what I had before except they cover mental health. I really hope this law gets revoked because it is going to really change my standard of living. I am looking at only having health insurance for my son now while me and my wife go without. Some benefit…

  5. You can’t change your insurance plan randomly throughout the year because you can’t maintain a viable risk pool that way. You could shorten or lengthen the contract, but it would need to be consistent among all plan participants. You can’t pick and choose what diseases to cover because then only those people at high risk would choose an option for that disease coverage, thus destroying the risk pool. You can’t randomly add Mayo Clinic to your plan because if too many people did that then Mayo Clinic’s costs would soar and therefore your insurer’s costs. Insurance is not like everything else you buy. To be a viable product, insurance needs predictability. As for the author’s prediction that people will be unhappy with the ACA when they realize they can’t switch plans mid-year makes no sense because purchasers will have no expectation that they should be able to do so. It’s not done that way with health insurance via employers or even Medicare Advantage.

  6. Yep. You understand exactly.
    Works exactly the same with doctors. Pay as you go.
    Insurance companies are not in the health care business. That would be medical professionals.
    Both are in risk management.
    Medical pros manage disease and injury risks.
    Insurance pros manage payment risks.
    Go for it.

  7. “Perhaps you know of a better alternative?”

    For cell phones it’s called pay-as-you-go, no-contract, or pre-paid.

  8. ” 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.”

    Why is this different than any other health plan? My wife’s work allows her to pick a plan – and only change it next enrollment – one year later.

    No big deal.

  9. Has anyone tried to get your cable company to go to a cafeteria plan? Which is essentially what the questioner is asking for. Your cable company won’t do it. With all sorts of reasons such as, “It would shut down the independent cable channels since so few people would want to watch them. You want those independent channels to have a place in the ‘free(?)’ market, don’t you?” Most cell phone companies want a contract as others have pointed out. And every organization I have worked for has open enrollment once a year for all the insurance plans the company may offer – health, life, disability, cancer, etc – plus any other perks they may offer such as 401K plan changes. The only time you get to enroll in the middle of a year is if you are newly hired. It would be wonderful it all of this was more flexible for the consumer, but I am not going to hold my breath.

  10. So we should let the people that are too lazy to actually look at what they are signing, have the ability to switch in and out of plans? How often? Once per year is enough. That is how Medicare plans work.

  11. Medicare’s open enrollment period runs from October 15th through December 7th, You can stick with your current plan or pick a new one during that period. After that, you’re committed to it until the next open enrollment period beginning 10/15/2014. That’s the way the system works which is perfectly fair and reasonable in my opinion. Why should the ACA work any differently?

  12. Those systems are called contracts. Maybe you have heard of them.

    Those geniuses are the same people who made it illegal to stick hospitality providers with the bill if you don’t like the room service or leave a restaurant without paying if you don’t like the food. Same goes for phone company agreements demanding a penalty for going to another carrier. Those are rules that protect businesses.

    Perhaps you know of a better alternative?

  13. What genius set up a system where its impossible to fire the company you’re doing business with if they give you bad customer service??

  14. Keep in mind that small business is the enemy of the soul-less corporations. Just look at WalMart and the bling franchise eateries. Corporations set up layers of bureaucracy, a cultish culture, and an army of lawyers. They can grind an individual into dust and break their spirit with their gutless, heartless, mind-numbing procedures, paperwork, and HR departments.

    This is why government and corporations collude; they understand each other.nA small business with ties to a community and the local economy is their worst enemy.

  15. This complainer would love a Forbes article from last year, treating health care as a market commodity.

    This Epstein quote sticks in my craw…

    “A sounder system would have allowed health-insurance carriers to require the insureds to pay a penalty to withdraw from coverage, or to insist that they remain in the plan for some minimum period…. What phone companies can routinely do is thus systematically denied to health-insurance carriers.”

    Comparing health care with telephone service (or calling it “customer service” as the writer does) is transparently revealing. The notion of absorbing what the gene pool and serious medical costs inflict on the corporate profit line is micro-analysis at its most cold-blooded. It compares financial and medical tragedies that wipe out whole lifetime earnings and in some cases actual lives of “insured” beneficiaries with losing phone service to a competitor.

    Innocent lives lost in war or natural disasters are more understandable than the mathematical indifference of corporate accounting. This is what happens when corporations become people and money becomes speech — human lives become waste products, no more important than shipping and packing charges, just another journal entry on the balance sheet.

    The purpose of private sector insurance is to make money by managing risk. And the customer who wants to “upgrade” when problems get heavy is like someone at an all-you-can-eat buffet, seeking to get something for nothing, Sorry. If you want more costly care, then go for it. But don’t expect any insurer to give you a blank check.

    What this writer really wants only comes with true government health care such as that furnished by the VA and armed forces medical service corps — government-paid medical professionals working in government-owned facilities not aiming to make corporate profits or generate enough revenue to cover marketing and advertising costs, sales commissions, share-holder payouts and executive compensation packages.

    Medicare and Medicaid are as close as you’re gonna get outside true government health care. And as long as there is no public option or single-payer alternative, we’re stuck with the expensive baggage of the private sector. As long as that’s what we have, quit bitching and get with the program. As early immigrants to America learned, there is no free lunch.

  16. And we are certainly hearing about insurers not happy but it needed some kind of a fix. I don’t know who the experts are here but probably some actuaries. If you have not taken notice of all the Quants being hired by insurers, do look at some classifieds. Quants are the geniuses that create the math models for black boxes on Wall Street for banks and hedge funds so we have the same thing going on with healthcare..it’s the battle of the machines and now the insurers will be bringing in the quants to model their next move.

    This actually caught the insurers off guard here as they are normally ahead with their math models and algorithms that can change by the minute bases on their business intelligence analytics. If you don’ t know what I quant does I have explained here and they are basically physicists who know how create math models for business that produce and predict profits, i.e. sub prime would not have happened without them so from the financial world to healthcare they come.


    If nobody has ever exposed you to this side of how it works, good learning here form Quants themselves on what they do and how they do it in a way the layman can get this, along with my commentary. So now the ball is back in the court of the insurer’s to create model for the 5% of the total insured market this affects.

    Just like the markets it’s the continuous rise and fall of the machines in healthcare…where segmentation has been over used and abused with business math models for profit.


  17. “And from what I can tell, we’ve totally screwed it up.”

    Obama says he is as frustrated as anyone. Really? As frustrated as the family who just lost their coverage, and can not get on the website to replace it?

    Yup, it is totally screwed up, just like HITECH here and NPfIT in the UK.