Beyond Obamacare glitches, some consumers face dramatically higher rates (+video)
As Obamacare begins to roll out, some people who already buy insurance on the individual market are getting cancellation notices – and offers for coverage at double and triple their old rates.
Problems with the main "Obamacare" website, HealthCare.gov, have dominated headlines since the site opened for business on Oct. 1.Skip to next paragraph
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But another problem is surfacing: Some consumers who have been buying their own insurance are getting cancellation notices – and offers for insurance at dramatically higher rates.
There are multiple reasons this is happening. First, the Affordable Care Act (ACA) sets minimum standards for benefits, including mental-health and substance-abuse treatment, maternity care, prescription drugs, and rehabilitative care, which were not included in many of the old plans. Also, insurance companies are now required to take all comers, regardless of their health status, and so rates are rising to cover their costs as well.
In the debate before the ACA passed, there was plenty of focus on people who lacked insurance, either because they couldn’t afford it or had a preexisting condition. Now, newspapers around the country are chronicling the stories of the other category of consumer – people who make too much money to be eligible for federal subsidies and are being charged double and triple their old rates.
"The upper-middle class are the people who are essentially being asked to foot the bill, and that's true across the country,” Jonathan Wu, cofounder of ValuePenguin, a consumer finance website, tells the San Jose Mercury News.
Michael Yount of Charlotte, N.C., is one such unhappy customer. He and his wife, retired and in their late 50s, have been buying their own health insurance from Blue Cross and Blue Shield (BCBS) in North Carolina, paying about $380 a month with an $11,000 deductible. BCBS is offering them a new plan for three times the cost, $1,124.50 a month, still with an $11,000 deductible.
“We are an insurance company’s dream,” Mr. Yount tells the Monitor. “We pay our bills, we hardly ever get sick, no prescription drugs. And now this.”
Reluctantly, he says, they plan to drop out of formal health insurance, pay the penalty, and “self-insure.”
“No question, there’s risk there,” Yount says. “The question is, how much are you willing to pay someone else to mitigate that risk?”
He also understands that the law is meant to help those who have not been able to buy insurance because of preexisting conditions. But he objects to how it’s being done.
“If the only way to get it to them is forcibly taking it from everybody else, how is that any better?” Yount says. “I’m struggling with what is the greater evil and injustice. I don’t think it’s any more right to take it from one person forcibly. It’s coercion.”