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Understanding why Americans’ insurance plans are being canceled

November 12, 2013 at 12:00 AM EST
Despite being happy with her health care plan, Deborah Persico of Washington, D.C., received notice that her insurance policy was being canceled. To understand some setbacks and some successes of the law, Judy Woodruff speaks with Mary Agnes Carey of Kaiser Health News.
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TRANSCRIPT

JUDY WOODRUFF: Now part two in our series featuring reactions to the Affordable Care Act, as the details are slowly registering with people.

Today’s remarks by former President Clinton underscore his concern about the potential political fallout. Some Americans are angry about receiving cancellation notices from their current insurance companies.

Case in point, Deborah Persico, a self-employed criminal defense lawyer in Washington, D.C., who frequently defends the indigent.

Here is some of what she told us.

DEBORAH PERSICO, Washington, D.C.: Hello. This is Deborah Persico.

Beginning some time in October, I actually had just gotten my rate renewal for my current plan. My premiums had gone up to $297 a month. The deductible of $2,700 was still the same. The out-of-pocket maximum expenses of $3,200 was still the same. But my premium had just gone up a little bit.

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And a couple weeks later, I got another letter from CareFirst telling me that that policy didn’t qualify under the Affordable Care Act, and that by next October, at the time of my renewal, that policy was going to be canceled. I nearly fell off the chair because, for years, all I had heard from President Obama, if you like your policy, you can keep your policy; if you like your doctors, you can keep your doctors.

I have excellent coverage with the plan I now have. I have hospitalization, and doctor care, and labs, and blood tests, physical therapy, ambulance, hospitalization. I mean, everything is included in this plan that I feel I would need.

It is a PPO, which I really wanted to be in, and I’m perfectly satisfied with this plan. So, once I received this letter from CareFirst, I was completely shocked. I could not figure out what was happening, and then I started the process of trying to find out what the new available policies were.

What I found in the bronze level, not the platinum level, in the bronze level, there’s a PPO HSA policy that, between the higher premiums and the much higher maximum out-of-pocket costs, will cost me probably more than $5,000 a year more than what I’m already paying for health insurance.

It’s been a total sticker shock. I have had some health issues this year, and I have had to reduce some of my workload. It’s a real hardship right now. My husband is 67 years old. I’m 58. We are desperately trying to save for retirement.

As I said, we are both self-employed, so we don’t have a pension from some company. And $5,000 more a year is not pocket change. You know, it’s really going to affect us. And now it makes no difference that we tried to cut back on other expenses, because it’s all going to be absorbed by the new health care policy.

The representative told me to look in the booklet that they had sent me, and I looked in the booklet. And in that booklet is a list of services that the ACA covers. Well, I have every one of those services, except maternity coverage and pediatric care. Now, I am 58 years old.

The chance of me having a child at this age is zero. So, you know, I ask the president, why do I have to pay an additional $5,000 a year for maternity coverage that I will never, ever need? I voted for President Obama twice. And I was totally supportive of the idea that every person should have access to affordable health care.

I would like to know why 5 percent of the population are having their policies canceled and having to pay exorbitant rates for a new policy. No one told me. In none of the documents that they sent to me was there any notation in there, you know, purchase at your own risk, because this policy doesn’t comply with the ACA and it may be canceled.

So, as far as I’m concerned, the insurance companies, the president and Congress are all complicit in this dishonesty.

JUDY WOODRUFF: Now, for the record, we have repeatedly invited top Obama administration officials on the program to discuss these issues, but, so far, they have declined.

Now, we realize all of the people we’re profiling are single anecdotes, so we try to fill out the broader picture on all this with Mary Agnes Carey of Kaiser Health News. It’s an editorially independent news organization, and it originally broke some of the stories on these canceled policies.

Mary Agnes Carey, welcome back to the NewsHour.

MARY AGNES CAREY, Kaiser Health News: Thank you.

JUDY WOODRUFF: Why are people like Ms. Persico having their policies canceled.

MARY AGNES CAREY: The problem is that some of these plans don’t meet the standards of the Affordable Care Act.

She mentioned two coverages she doesn’t want that are part of the essential felt benefits, maternity and pediatric care. There’s a standard list of essential health benefits that must be covered in these plans. They have to meet certain co-pays and deductibles, and if they don’t, then they will no longer be offered by the insurer.

JUDY WOODRUFF: But when she bought that policy, there was an awareness of what was going to happen with the law. So, why — why was she told this kind of a policy? Why is she now in this fix?

MARY AGNES CAREY: There’s something called grandfather status that many of these policies have lost.

When the law was signed in March 2010, as long as plans didn’t change significantly in what they covered or co-pays, out-of-pocket deductibles and so on, they could keep their grandfather status. Some people in this predicament have bought those plans since March of 2010. Some of these plans have lost their grandfathered status.

And some insurers have just decided they don’t want to sell these policies anymore. Insurers in the individual market have frequently made decisions that one policy isn’t sold from one year to the next, so it’s a combined set of factors why some people aren’t getting to hold their policies.

JUDY WOODRUFF: So, who dropped the ball here? Do we know for a fact whether it was the insurance company, whether it was the government not disclosing more about the law? What — what happened?

MARY AGNES CAREY: There was a real messaging problem on the part of the administration.

We all have heard repeatedly, if you like your plan, you can keep it, if you like your doctor, you can keep it, when the law said, plans could stay in place as long as significant changes weren’t made. Maybe that message was deemed a little too complex to relate to people, but it created a problem and a misunderstanding.

The president himself has apologized for this, that the administration’s feeling is that, for the individual market, a lot of these policies are skimpy. They don’t provide good coverage. She is obviously very happy with her coverage and she wants to keep it.

JUDY WOODRUFF: Yes, she described it as a plan that covers everything she needs and even more. So, how widespread, Mary Agnes, is this problem?

MARY AGNES CAREY: There’s about 14 million in the individual market. It represents about 5 percent of people who buy insurance.

And we don’t know exactly how many people are losing their policies, but the estimates vary from two million to four million. But as more people get these notices and people begin to track these statistics, this number could increase.

JUDY WOODRUFF: So, two million to four million. And what are the administration’s options?

Now, we reported earlier former President Clinton is now saying the law needs to be changed, amended. You have Democratic members of Congress calling on the administration to do something. What — what are their options at this point?

MARY AGNES CAREY: Well, I doubt very much there will be any bipartisan consensus on Capitol Hill to change any facet of the Affordable Care Act.

What the president has done is asked his staff to look at ways to help these folks, in particular someone who has an individual health policy, individual market policy who might be losing it who doesn’t qualify for the subsidies. Perhaps they could work out an agreement with the health insurance industry to try to provide some relief.

You have to remember that people in the individual markets have already passed the medical underwriting that caused some problems before. These tend to be healthier people. They’re getting health insurance now. You need them as health insurance expands to balance out the risk of the sick people.

JUDY WOODRUFF: So, if you find yourself in this fix that Ms. Persico is in, what — what can you do? What are — what are your options?

MARY AGNES CAREY: In the notice that your insurer sends to you, they need to tell you what you might qualify for different policies for that insurer.

That’s one route. On healthcare.gov, there still is a browsing function — that does work — where you can type in your zip code and get different — find out different plans that might work for you. You can certainly look to those plans to see if you can get a better deal.

JUDY WOODRUFF: Because one of the — she clearly identified one. Then she said it’s going to cost her $5,000 more a year.

MARY AGNES CAREY: Right. This is clearly frustrating.

This was never the intent of the health law’s proponents. They looked at the problems in the individual market. You have to remember that a lot of people couldn’t get coverage if they had been sick, or their coverage would be canceled, or they were charged higher rates if they had been sick. The thought was to spread that risk out and even it out and make it better for people.

But, as we found out from Deborah Persico, some people are really having a hard time.

JUDY WOODRUFF: So, we’re hearing a lot about problems with the ACA, the Affordable Care Act, Mary Agnes. What — is there a part of it that’s going well that — that we can tell the public about?

MARY AGNES CAREY: Well, there are millions of kids, for example — I shouldn’t call them kids — they’re adult children up to 26 who have stayed on their parents’ health plan. There are preventive services that have been offered without co-pays or deductibles.

Many seniors have gotten help with their prescription drugs. And looking forward, there are subsidies to help people provide coverage. There’s an expansion of Medicaid to help people who make up to about $16,000 a year qualify. And there will be no more lifetime limits or annual caps on coverage.

JUDY WOODRUFF: In fact, in Medicaid, a lot more people are signing up.

MARY AGNES CAREY: That’s been the case so far, exactly.

JUDY WOODRUFF: Mary Agnes Carey with Kaiser Health News, thank you.

MARY AGNES CAREY: Thank you.