Like most Georgians who buy their own health plans, Stan Sands recently opened a letter from his insurance company telling him exactly what the Affordable Care Act would mean to his wallet.
“I almost fell out of my chair,” said Sands, 61, who is retired and lives in Brookhaven. “I couldn’t believe it.”
Sands has a high-deductible health plan from Humana that currently costs $474 a month to cover him and his wife. The notice said that converting to an Obamacare-approved plan would cost $929 monthly — almost double what he is paying now.
Most Georgians with health insurance get coverage at work or through Medicare or Medicaid. But about 500,000 people statewide buy their own plans directly. Most are self-employed, work at jobs that don’t offer a plan, or are early retirees like Sands. And almost all of them are receiving a personalized notice like the one sent to Sands.
The Georgia Insurance Department said Wednesday that as many as 400,000 Georgians who buy individual plans have coverage today that does not meet the Affordable Care Act’s minimum requirements.
While some of the notices have been described this week as cancellations, insurers said that's not what Georgians are receiving. Most notices offer policyholders the chance to hold onto their current plans until the policy runs out next year. That will allow them to avoid Obamacare-related price increases well into 2013. But when those policies expire, most will have to convert to new plans.
“The insurer, first and foremost, wants to continue that relationship with their member in 2014 — that’s why I think the word cancel or cancellation is improper,” said Graham Thompson, executive director of the Georgia Association of Health Plans. “That’s not what this is. We’re making them aware of their options.”
What the insurance companies say
Insurers warned for months that provisions of the Affordable Care Act would increase the cost of health plans for many who buy their own coverage. In spite of the warnings, the arrival of the notices in millions of mailboxes around the country is being greeted as yet another Obamacare bombshell.
Some consumers who bought their plans before the health law passed in 2010 can keep those “grandfathered” plans. But America’s Health Insurance Plans, a national trade group, said most people have tweaked their coverage in the past three years, so their plans aren’t eligible to continue under that provision.
Walt Cherniak, a spokesman for Aetna, said the insurer is letting its customers know what their options will be under Affordable Care Act, once their current plans expire.
“No one is being thrown off their plans in midyear,” he said.
Humana has about 25,900 individual health insurance members in Georgia whose policies will be affected by the implementation of the Affordable Care Act on Jan. 1.
The company said it will notify all of these Georgia individual health plan members in November that they can keep their current Humana insurance policy through the end of 2014, or choose a Humana medical plan that complies with the Affordable Care Act and includes the law’s “essential health benefits” and takes effect two months from now.
‘I don’t want or need that’
Jeff Eidson currently pays $67 a month to Humana for a high-deductible health plan. The self-employed Atlantan said he got a notice a few weeks ago saying it would cost him over $250 a month to switch now to an ACA-compliant plan. Or, the notice said, he could raise his deductible to $10,000 and keep his premiums at $87 through next year, before he would have to switch at the end of next year to an ACA-compliant plan that would cost him $273 monthly.
He’s going to take the cheaper option for now — but he’s not happy about facing the price hike eventually.
“Granted, the deductible goes way down to $2,500 but I don’t want that or need that. It includes a lot of extra medical services I do not require,” he said.
Sands, the Brookhaven retiree, also objects to being forced into buying benefits he doesn’t need.
“What they’re trying to tell me is I did not or could not make a good decision for me and my family,” Sands said. “It’s so insulting.”
Like Eidson, Sands is renewing his current policy so he can keep his rate until the plan expires next year.
Bill Custer, a health care expert at Georgia State University, said the health plan notices are hitting consumers at a time when they can’t easily explore all of the new options available to them through the Affordable Care Act — largely because of problems with the new Health Insurance Marketplace website. That means it’s also hard to get information about the law’s tax credits that could actually make health plans more affordable in the future than they are now, for many people in the individual market.
Don Hoppe of Dacula, a self-employed eBay seller, got a notice recently from Blue Cross and Blue Shield of Georgia about his options.
He pays $190 a month now for a high-deductible plan. His option: pay $475 a month for a plan that will comply with Obamacare starting in January, or renew his current plan for $220 a month and put off having to buy a plan that complies with the new law until this time next year.
He took the cheaper option. “I’m relieved they didn’t say sorry your plan is dead, either get the $475 plan or take a hike,” Hoppe said.
Blue Cross on Wednesday declined to comment on changes facing its customers.
Hoppe’s not excited about a price jump next year, since he doesn’t think he will be able to qualify for any tax credits being offered on the Health Insurance Marketplace. He said he doesn’t want to pay more for benefits he doesn’t need.
“It would be really nice if I could just have a decent health insurance plan that doesn’t clean me out and get on with life,” he said.
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