What’s up with the individual market?
The cancellations you’ve been reading about involve individual policies — insurance for people aged 18-64 who don’t have a plan through an employer and have to buy their own. An individual insurance policy typically is a one-year contract that the insurer and customer may renew at the end of the year, or not. (The Washington Post notes research showing that nearly 85 percent of people who hold these policies don’t have them for longer than two years.) In any event, individual plans represent about 6 percent of the total insurance market in Georgia. Here are the estimates (based on 2012 census data; percentages total more than 100 because some people held more than one kind of policy during the year):
• 5.1 million (52%): Employer-sponsored insurance plans.
• 1.4 million (14%): Medicare, the public insurance plan for those 65 and older.
• 1.3 million (13%): Medicaid and PeachCare, the public health plans for low-income people.
• 595,000 (6%): individual insurance plans for those under 65.
• 1.9 million (19%): no insurance
And these cancellations only affect the individual market?
Mostly. They also affect some small-group plans. Note that Georgia insurers say they are not sending out cancellation notices to their individual policyholders. (This is happening in some states, though.) They are, however, letting policyholders know that the ACA eventually will raise prices for most.
Why are they doing that?
Well, they raise rates every year, because the cost of health care goes up every year. But there’s also a big Obamacare factor. The Affordable Care Act requires that each new plan cover 10 “essential health benefits,” including inpatient, outpatient and emergency room care; maternity and newborn care; prescription drugs; mental health and addiction services; and no-cost preventive health screenings, such as mammograms, colonoscopies and cholesterol tests. Plans offered by large employers already cover most or all of these “essential benefits.” Many plans on the individual market don’t, so they’ll have to add any essential services they don’t currently cover.
So they’re jacking up rates because of that?
That appears to be their justification, although few insurance companies in Georgia will comment publicly. We know some of this because individual customers have shared the notices they received from insurance companies, and the notices mention Obamacare as part of the reason for the increase.
What can individual policyholders do?
They have a few choices. First, in many cases they can re-up with their current plan for one more year. Even then, the insurance company may charge more for that plan, either with a higher premium or a higher deductible or both. Second, they can opt for a new plan that contains all the essential benefits required by law. Those premiums, however, will be higher and, in many cases, sky higher. Third, they could shop on the Health Insurance Marketplace to look for a better deal, if the Health Insurance Marketplace actually worked. The website has had so many problems since its Oct. 1 launch that it’s very difficult for most Georgians to get in and have a look at their options. If they ever do, they may find that they qualify for a tax credit that would lower the cost of their new insurance.
Didn’t the president promise that you could keep your current plan if you like it?
He did promise that. He was mistaken, at least when it comes to the individual market.
So what about my employer-sponsored plan? Is that going to change?
Not in the way the individual plans are changing, but some companies are making changes. For instance, two major employers in Atlanta, UPS and Northside Hospital, are planning to exclude their workers’ spouses from the company’s plan if the spouse has access to insurance through his or her job.
Wait. My doctor’s office just told me last week that a colonoscopy isn’t free to me. You just said it’s supposed to be free under Obamacare.
It’s probably because your plan is “grandfathered.” Companies that offered insurance plans before the Affordable Care Act passed in 2010 are grandfathered, meaning they don’t have to meet some requirements of the ACA. That’s why your colonoscopy won’t be free.
Will it ever be free?
It might. If your employer makes substantial changes in your coverage, then the law says the company will have to cover all 10 essential benefits. But don’t wait until then to get that colonoscopy!
What about my Medicare?
The Affordable Care Act should have no effect on Medicare, except for some additional benefits that have already taken effect.
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