Health Insurance Cancellations are an Insurance Industry Scam

The right wing media has done an astounding job of convincing the intellectually challenged that the ACA (aka "Obamacare" by the pathetically ignorant) is responsible for the cancellation of health insurance polices. Of course that's a lie, but then the right lives and thrives on lies (e.g. Birther nonsense, Social Security number nonsense, the President is a homosexual nonsense and of course the ever comical Obama is a socialist, communist, fascist, Nazi, Maoist, Muslim, foreign-born American-hater).

Pathetic Willard the Money Hider (why does anyone still pay attention to that loser?) went on Meet the Press haughtily proclaiming President Obama's Failure to the Tell The American People the Truth about the ACA is now rotting his Second Term.

Now for some truth about the scam pulled by the insurance industry on the American people.

Plans that were in place since March of 2010 (prior to the Affordable Care Act) were "Grandfathered" and excluded from many of the laws requirements so that they WOULDN'T be cancelled. The ACA doesn't FORCE those plans to remain, but it doesn't FORCE them to be cancelled either. What we now know is that the Insurance Companies deliberately sent out cancellation notices, along with automatic renewals into higher rate plans before Oct 1st last year as a means of preventing people from shopping on the Exchange and finding better, cheaper plans.

In short, this is an Insurance Industry Scam to gouge their customers, blame the ACA for it, and prevent them from taking advantage of improved coverage and savings that the ACA actually provides.

And so far this Scam has worked beautifully. The White House has been rocked back on their heels not just by the rollout problems of HealthCare.gov (which is now actually working), but also by these disingenuous "Cancellation Letters."

But now the charlatans behind the curtain are finally being revealed.

Donna received the letter canceling her insurance plan on Sept. 16. Her insurance company, LifeWise of Washington, told her that they'd identified a new plan for her. If she did nothing, she'd be covered. A 56-year-old Seattle resident with a 57-year-old husband and 15-year-old daughter, Donna had been looking forward to the savings that the Affordable Care Act had to offer.

But that's not what she found. Instead, she'd be paying an additional $300 a month for coverage. The letter made no mention of the health insurance marketplace that would soon open in Washington, where she could shop for competitive plans, and only an oblique reference to financial help that she might qualify for, if she made the effort to call and find out. Otherwise, she'd be automatically rolled over to a new plan - and, as the letter said, "If you're happy with this plan, do nothing."

If Donna had done nothing, she would have ended up spending about $1,000 more a month for insurance than she will now that she went to the marketplace, picked the best plan for her family and accessed tax credits at the heart of the health care reform law.

"The info that we were sent by LifeWise was totally bogus. Why the heck did they try to screw us?" Donna said. "People who are afraid of the ACA should be much more afraid of the insurance companies who will exploit their fear and end up overcharging them."

And she's not alone.

In Kentucky, Insurance Provider Humana was fined $65,000 for sending out misleading letters. The Kentucky Department of Insurance fined Humana $65,430 because it offered policyholders an unapproved opportunity to amend their insurance as part of a letter that regulators have called "misleading."

The department investigated letters sent in August to 6,543 individual plan policyholders in Kentucky. The letters said they needed to renew their plans for 2014 within 30 days or choose a more expensive option that complies with the Affordable Care Act. Regulators called the letters misleading, arguing they did not make sufficiently clear that policyholders could compare and choose competing plans on the state's health insurance exchanges, which open on Oct. 1, and for which they could be eligible for federal subsidies.

Let's follow this logically, if the letters were sent in August and required a response within 30 days - it essentially forced the policy holders to choose the worse possible option before the Oct. 1 launch of their state exchange.

That is a classic "high pressure" sales tactic. "Buy NOW or you'll miss out. SALE ENDING SOON" - when in fact, there was no legitimate reason to push people to make a decision in that 30-day window other than to prevent them from shopping on the exchange.

Over 2,200 people actually did respond within that period, but Kentucky regulators after finding they had been deceived by Humana released them from that agreement and allowed them to go ahead and shop for a better plan on the marketplace. Then they fined Humana for their attempted scam.

Under the ACA all health plans must:

End lifetime limits on coverage

End arbitrary cancellations of health coverage

Cover adult children up to age 26

Provide a Summary of Benefits and Coverage (SBC), a short, easy-to-understand summary of what a plan covers and costs

Hold insurance companies accountable to spend your premiums on health care, not administrative costs and bonuses

Grandfathered - aka junk - plans DON'T have to:

Cover preventive care as an included part of the policy

Guarantee your right to appeal

Protect your choice of doctors and access to emergency care

Be held accountable through Rate Review for excessive premium increases

In addition to the above, grandfathered individual health insurance plans - aka Junk policies - (the kind you buy yourself, not the kind you get from an employer) don't have to:

End yearly limits on coverage

Cover you if you have a pre-existing health condition

So if you had a plan that had a lifetime cap, didn't cover your children until they were 26, could be arbitrarily cancelled and didn't spend 80-85% of your premiums on your care - that plan would have to be updated or replaced. If you had a plan like that, and for some reason liked it then you were always going to have to make an adjustment to a plan that doesn't suck anymore. The question is, would you be able to shop for the best possible option or would you stay with the options given by your current provider? These letters show that some providers tried to sucker their clients into staying and accepting a much higher rate - blaming the ACA for it - and therefore scaring them away from the Exchange Marketplace.

We've been hearing that the reason these plans were more expensive is because they had to cover preventive care (Limbaugh had a field-day with that one last week), but as shown above the Grandfathered Plans Didn't.

It's a scam, it's all a scam.

Now let's go back and revisit "If you like your plan, you can keep it" as being flawed or wrong. It's NOT. Instead of amending the plans to meet minimum grandfather requirements they are being shutdown by the insurance industries choice, not by the ACA.

A new provision of the Affordable Care Act; called the Medical Loss Ratio, or the "80/20¡å provision; means some Americans see a rebate from their health insurance companies. The provision is aimed at holding health insurance companies accountable for how they spend the money collected through premiums. It compares the dollars they spend on health care costs vs. other overhead costs; like marketing, salaries and administrative expenses.

Grandfathered - aka junk - plans don't have to cover pre-existing conditions. Junk policies don't have to provide free preventive care services. (High Co-Pays and Deductibles can remain) Junk policies can still limit yearly coverage (in the individual market).

In short, there is no new special expensive ACA requirement on existing junk policies other the fact that the lifetime cap has gone from $2 million to infinite and they can't arbitrarily CANCEL your insurance between renewal periods. They can only do it at the end of you plan year, which is exactly what they're doing - simply because they can, not because the ACA put some onerous expensive requirement on them.

Just about everything they were required by the ACA to do this year, they had to do LAST YEAR, and the year before that proving that these "ObamaCare Cancellations" are a total scam.