More than 7 million Americans have received cancellation notices from their current insurance providers. Today, November 7th, President Obama apologized for that. He’s sorry; but sorry for what? Is he sorry for their loss? Or, is he sorry, because, before he signed the Affordable Care Act, he did not confirm that under the terms of the Act, Americans would be able to keep their insurance and keep their doctors?
One of the key provisions of the Act was the mandate that, as of January 1st, 2014, all policies must provide the “Essential Health Benefits”. Policies that lacked even one of the benefits were no longer allowed to be offered. Almost all of the policies were cancelled because the coverage they provided lacked one or more of these “Essential Health Benefits”.
The Essential Health Benefits that must be provided are 1) Ambulatory Patient Services, outpatient care you get without being admitted to a hospital; 2) Emergency Services; 3) Hospitalization; 4) Maternity and Newborn Care, care before and after your baby is born; 5) Mental Health & Substance Disorder Services, including behavioral health treatment both counseling and psychotherapy; 6) Prescription Drugs; 7) Rehabilitative and habilitative Services and Devices, Services and devices to help people with injuries, disabilities or chronic conditions gain or recover mental and physical skills; 8) Laboratory Services; 9) Preventive and Wellness Service and Chronic Disease Management; and 10) Pediatric Services. Most traditional individual polices don’t provide wellness; they certainly don’t offer maternity benefits to men.
If the insurance companies comply with the law mandating they provide these benefits to each and every person, then, under the law, policies that don’t contain each and every one of these benefits could no longer be offered. Given the option, a young person is more likely to buy catastrophic coverage, rather than pay the extra and substantial cost of covering themselves for the above benefits. A twenty eight year old woman who has had a hysterectomy probably would not want to pay the additional cost associated with covering herself for maternity care. To comply with the law, insurance companies had to replace these policies’ limited offerings with policies that provided the required Essential Health Benefits. Since, in most cases, benefits are added, the cost for such policies has to go up. By creating the mandate that all policies offer the Essential Health Benefits, you took away the opportunity to bring to the market truly inexpensive, catastrophic coverage that only kicks in when you have a serious accident or illness.
California law requires an insurer to provide 90 days notice if it plans to withdraw an individual health plan from the market or 180 days notice if it ceases to provide or arrange for the provision of health care services for new individual health benefit plans in this state. Under the Act, notice was not required to be provided until October 1. On Tuesday, November 5th, California’s Insurance Commissioner Dave Jones described a settlement with Blue Shield of California Life and Health Insurance Co. that would allow about 80,00, policyholders to extend their current coverage, which would have been terminated on December 31st, until March 31, 2014. This settlement only covers Blue Shield policy holders. It is possible that other insurers will make similar agreements. This is good news. Since the law requiring the Essential Health Benefit does not take effect until the first of the year, most people who received cancellation notices are still receiving benefits under their current policies. It is still possible for them to extend their current policies and retain their current benefits past the first of the year; but, of course, allowing this is a violation of the Act.
The promise that people can keep their doctors is unenforceable. If the doctor quits or retires you are out of luck. If the doctor continues to practice medicine the question really is “How much of his fee will you have to pay?” The problem becomes whether or not your insurance company will cover or continue to cover the cost of you seeing “your doctor”. The doctor and the insurance company negotiate fee arrangements that cover how much the insurance company will reimburse the doctor for services. If the reimbursement proposed by the insurance companies is insufficient to cover the doctors operating costs, the doctor won’t take that insurance. Every year, Insurance companies are continuing to cut their reimbursements. Doctors take home less every year. With the implementation of the Affordable Care Act, reimbursements are expected to decrease approximately 20%. At a certain point, doctors are going to say no. When that happens, doctors will be paid by you, best case, as an out of network provider, or worst case, in cash. As long as you are able to pay, the services of the doctor you choose will be yours.
President Obama made promises that, once the Act was enacted, were beyond his control. In trying to “fix things”, President Obama is making promises that are beyond his control now. He can’t have it both ways. If you mandate health insurers provide the Essential Health Benefits, then you can’t let people keep policies that don’t provide them. If you allow for exceptions, then who should those exceptions be given to?