Consumers Experiencing Sticker Shock Over Canceled Plans
A large portion of U.S. residents who are receiving -- or are expected to receive -- discontinuation or amendment notices from their insurers about their "substandard" health plans are considered to be politically active and vocal individuals, which could pose a problem for advocates of the Affordable Care Act, the Washington Post reports (Cha/Sun, Washington Post, 11/3).
Background on Cancellation Letters
Last week, NBC News reported that millions of consumers nationwide with individual health plans already have received "cancellation" letters notifying them that their current policies do not meet the minimum coverage requirements under the ACA. NBC News' sources, who helped develop the law, said up to 75% of the nearly 14 million people on the individual market could expect to receive the letters or similar notices over the next year. The sources said many of the consumers could be required to buy more costly coverage and experience "sticker shock."
Under the ACA, insurance policies that were in effect as of March 23, 2010 -- when the law was enacted -- will be "grandfathered" even if they do not meet the new coverage requirements. HHS later issued regulations clarifying that if any of those plans were changed significantly after that date, they would lose their grandfathered status.
Many critics of the ACA, including some House Republican leaders, cited the NBC News report as evidence that the law is flawed and that President Obama and his administration have misled consumers with the oft-repeated promise that they will be able to continue with their existing health plans if they like them (California Healthline, 10/29).
States Release Data on Expected Cancellations
According to the Post, the majority of consumers who are receiving the insurer letters have incomes that exceed the eligibility for the federal subsidies available through the ACA's federal health insurance exchange. However, they generally do not earn enough to comfortably pay the higher cost for the new plans that meet the ACA's coverage requirements, the Post reports (Washington Post, 11/3).
Some states in recent days have released data on the number of consumers who stand to lose their coverage and will receive cancellation notices over the next several months. According to the AP/UT-San Diego:
- In California, 900,000 are expected to lose their coverage;
- In Florida, 330,000 could lose their coverage;
- In Minnesota, 140,000 are likely to receive the notices; and
- In Georgia, 400,000 might receive the letters (Kennedy, AP/U-T San Diego, 11/3).
Politically Active Group Opens the Door for Critics
According to Politico, some of the individuals receiving the cancellation notices have reached out to their congressional representatives in recent weeks. Seeing an opportunity to capitalize on the growing discontent and frustration, the Republican National Committee last week launched a website calling on people who have received the notices to send in photos of the letters if they cited the ACA as the reason for ending a policy. Similarly, Republican pundits have encouraged users on social media sites like Twitter to share their thoughts with the hashtag #InsuranceCanceled.
Robert Laszewski -- the president of Health Policy and Strategy Associates -- said, "The anger crosses party lines." He added, "These are people who will be sitting down with their friends and families at Thanksgiving sharing stories about their cancellation letters. That's going to be the only thing that counts ... [I]t's not theoretical anymore" (Samuelsohn/Millman, Politico, 11/1).
According to the AP/U-T San Diego, most states require insurance companies to give consumers 90 days' notice before canceling plans, which means another round of letters informing consumers of their canceled plans is slated to go out in March and in May (AP/U-T San Diego, 11/3).
This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.