Talk about rocky starts.
Since Obamacare opened October 1, the online healthcare marketplace has been riddled with technical problems. Now, some healthcare consumers are getting another shock: Cancellation notices from their insurers. Hundreds of thousands of individual policyholders, that's insurance-speak for folks who don’t get health insurance through employers, are receiving letters from their insurance companies notifying them that their current policies will be terminated as the Affordable Care Act goes into effect.
Insurance companies are offering them new policies with more comprehensive coverage, for the most part. That kind of coverage is required under the ACA. But that doesn’t necessarily mean everyone’s policies will be cheaper. "The reality is that this transition requires costs to go up for some patients and down for others," says Dan Mendelson, CEO of the consulting firm Avalere Health. "And that’s a difficult transition."
Deborah Cavallaro, owner of My Big Deal LLC in Los Angeles, Calif., says President Obama misled her when he kept saying that no one would have to give up their health insurance policy if they liked it. “My complaint with the president and the administration is that they are simply not telling the whole truth,” says Cavallaro.
Cavallaro’s insurer informed her it will be cancelling her current policy and offered her another with a higher monthly premium. "It’s coverage I don’t want and don’t need," she says.
Hundreds of thousands of individual policyholders are getting cancellation notices in light of the new healthcare law. According to Kaiser Health News, Florida Blue, for example, is terminating around 300,000 of its individual policies. Kaiser Permanente in California is cancelling about 160,000.
Healthcare analysts say people can either accept the new policies their insurers are offering or comparison-shop on the new state healthcare exchanges. Mendelson says costs will go down for many of those people, especially given the federal subsidies that will be offered. But some people, including younger people with bare-bones coverage plans right now, may end up paying more.
"They are sharing the risk pool, if you will, with those people who have more health problems and are sicker," says Patrick Johnston at the California Association of Health Plans.
Dan Mendelson says when President Obama talked about “keeping your insurance,” he was generally referring to employer-based insurance, which is “very consistent across the marketplace.” But that point may have been lost on the public. And critics of Obamacare can add to their list of complaints about the new healthcare law, which is already under fire for its website failure.