TOPICS > Health

Move to extend canceled health care plans has legal, practical complications

November 20, 2013 at 12:00 AM EDT
Kathleen Baker of Denver hoped to keep her health care plan into the future. But like millions of others, her policy was canceled under the Affordable Care Act. Judy Woodruff talks to NPR's Julie Rovner for the bigger picture on whether Americans will be able to extend their canceled policies through 2014.
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JUDY WOODRUFF: Now the latest on the president’s moves to deal with the cancellations of health insurance policies and the challenges of trying to fix it.

State insurance commissioners, who will play a big role in all this, met with President Obama this afternoon.

And that brings us back to our series on the impact of the Affordable Care Act, as people learn more of the details.

Tonight, we have the story of a Colorado woman whose current insurance plan is being canceled.

 KATHLEEN BAKER: My name is Kathleen Baker. I work part-time in the real estate industry here in Denver. And I have had an individual health insurance policy for the past six years.

I’m insured with Kaiser Permanente. And I have found the quality of their care to be perfect, excellent, in many ways, better than I could have expected.

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I’m a fairly healthy person, so, most of all, I go to them once a year for my annual visit. The few times I have needed to see them in addition to that, they have always been very responsive. I was planning to keep this plan for the future. I had hoped that, as had been said, that if you had an existing policy that you were happy with, that you would able to keep it.

I, of course, was one of the millions of Americans who got a letter that said my policy wasn’t one of those that I could keep.

“Because your current plan does not meet the requirements by law, you will need to choose a new Kaiser Permanente plan by December 15, 2013, or you will lose your coverage.”

They gave me what my options were. They told me in that letter which policy going forward they felt was the most comparable to the one I have had historically. The monthly premium has gone up by 17 percent. That, by itself, really not that bad.

What’s otherwise bad is that I had an annual deductible of $3,000. The closest to that is now to have a $4,500 annual deductible. My previous annual deductible was also my annual total out-of-pocket maximum. Going forward, it looks like the maximum annual out-of-pocket expense is going to be $6,350.

Now, that’s 112 percent of what my prior amount was. If I add my premiums together with my maximum potential out-of-pocket expenses, I have about a 61 percent potential increase in my health expenditures on an annual basis.

I know that the president and the administration have said — and I presume, if they say it, they believe it — that these plans are substandard. This wasn’t a substandard plan. It was a plan that was good for me. Now I have to have a higher-premium plan, a higher potential out-of-pocket maximum on an annual basis.

I don’t see how this could be a better plan for me. When I saw that the health care act had been passed, I really did believe that I would be able to keep my health care plan. While I don’t like to participate in sort of conspiracy theories, I do believe that because of the economics of how the plan works, they need a number of people who underutilize services, but pay for those services, to go onto the exchanges.

And in order for that to happen, if they cancel my plan, I go onto that exchange, of course, the economics of that is that somebody else who does use health care services more often will be subsidized through me. I understand that that’s how it works.

I expected that I would be paying something more. I don’t know how we can cover all those who aren’t insured without some of us paying more. I don’t think I expected a 61 percent increase to my health care costs as a result of this. I think that’s much higher than any one of us could have expected.

I have written to all of my congressmen. I am hoping that I will hear back from them. And I have until December 15. And I’m hoping that, at the very least, since they’re not going to roll back Obamacare, I’m hoping that they at least go with their promise of allowing those of us that had plans that we liked to keep them.

JUDY WOODRUFF: We checked back with Kathleen Baker, and she says she doesn’t know yet whether her insurer will now let her stay with her current plan. Even if that were to happen, she told us, she’s concerned the president’s action only buys her one more year before another likely cancellation.

We try to fill out the bigger picture again.

And Julie Rovner of NPR is back with us to help.

Welcome back.

JULIE ROVNER, National Public Radio: Nice to be here.

JUDY WOODRUFF: So, it is understandable why Kathleen Baker is upset, 61 percent increase in what she would pay. What is your sense? What’s our understanding of the likelihood that she will be able to keep the current policy?

JULIE ROVNER: We really don’t know. This was something, of course, that the president tried to sort of plug in last week, as a way to try to at least not, if make good on his promise, at least try to make a little bit better on his promise.

But it’s very complicated. He started out saying, if you like your plan, you can keep it. And then it sort of become, if you like your plan, you can keep it maybe for one more year and maybe if your insurance company says so. And then it became if your insurance company says so, but only if your state insurer says so, and now maybe not even that.

JUDY WOODRUFF: So, now, we know — and we just reported this — the president meeting late this afternoon with a handful of some state insurance commissioners. How are they reacting? They have some say in how all this turns out.

JULIE ROVNER: That’s right.

And they’re reacting kind of all across the board. We really don’t know yet. Only a handful of states have really said. But it turns out it’s even more complicated than the insurance commissioners deciding. In some number of states — we don’t know the exact number, but it seems to be about a dozen — the states have actually written into either their state laws or their state regulations these same requirements to mirror the federal requirements, that after January 1, 2014, insurance companies can no longer sell or renew policies that are not in compliance with these new federal rules.

So even if the state insurance commissioners wanted to say, OK, you can have another year, they can’t because their hands are tied by their own state laws and regulations. So it becomes that much more difficult to basically uncancel these canceled policies.

JUDY WOODRUFF: And it’s interesting, because it looks as if some of the states that were trying to go along with the president and the health care law are the very states who are now saying, we can’t double back and make changes.

JULIE ROVNER: That’s right. And there are reasons.

I mean, some of them are practical, that it’s very difficult in a short amount of time between now and January 1, to do this. But it’s also because they’re worried about the risk pools. And I think, you know, that basically the — our woman from Colorado is correct, that, in some cases, they are asking healthy people to pay more to help offset the cost of those sick people.

And they’re worried that if it’s the healthy people who have been paying less who keep their plans, who keep these plans for another year, that there will be only sick people in the risk pools and then, for the following year, for 2015, insurers are going to raise their rates. That will make healthy people not anxious to sign up, and then you get into that terrible insurance death spiral that we hear so much about.

JUDY WOODRUFF: So, we talked about the commissioners, Julie. What about the insurance companies? How are they dealing with this?

JULIE ROVNER: Well, they have also been sort of all over the place.

I know, in Florida, a number of insurance companies have said that, yes, they will uncancel these plans. But a lot of them, again, have been worried more about the practicalities. They have to go in. They have to send more letters. They have to give people a choice of other plans or of keeping their plans or of going on the exchange.

They have basically spent most of this past year setting up new plans, setting up their software networks. It would be extremely difficult for them to undo all of this in that short a period of time, even if they were allowed to. They have to go back to state regulators. If they’re going to offer these plans for another year, they would probably want to get rate adjustments. They have to go to regulators to get permission for that.

All of this, again, is very, very difficult.

JUDY WOODRUFF: And is there a timetable here? Is there a date by which they really have to make a decision?

JULIE ROVNER: Well, if they have canceled these plans starting on January 1, that would be the date. In the exchanges, you have to basically purchase a plan by December 15 in order to have coverage begin January 1.

We’re really talking about that short a window now. It’s towards the end of November. You have to, at least in the exchange, select your coverage by December 15. That’s getting to be a really short amount of time.

JUDY WOODRUFF: So, let’s talk about the administration’s other big headache, and that is the website, which has been the problem from the beginning of the rollout in October.

There was some testimony on Capitol Hill yesterday, a little bit of new information. What does it look like?

JULIE ROVNER: Well, of course, what we learned yesterday is that there are parts of the website,  particularly some of the back-end parts of the website, or they call them the not-consumer-facing parts of the website, that are not basically yet built.

And what they are saying is that these are things to connect some of the payments to some of the insurers, things that won’t necessarily be needed quite yet, because, after all, payments don’t start coming in until the middle of December or until January.

JUDY WOODRUFF: So, is that — is that something that they’re confident can be fixed?

JULIE ROVNER: That’s what they’re saying, but, of course, they have been confident that all of this could be fixed.

And one of the ironies today is that the website has been down most of the day today. Secretary Sebelius was off doing a demonstration. She tried to get on the website and found that the website was down.

JUDY WOODRUFF: So this — the promise or the comment from a couple of weeks ago that it will be available and usable for most people who try to use it by the end of November, what are they saying?

JULIE ROVNER: That is still what they’re saying.

What they’re saying is that the people for whom it not be available and usable by the end of November are mostly people who have — not because the website won’t be working, but because they have individual situations that are such that they will need to go to specialists. They will need to make a call. They will need other kinds of help.

So, they do insist that they’re going to have this ready and running smoothly. But that’s basically just a week and a couple of days away from now.

JUDY WOODRUFF: Well, we are really glad to have you here to help us walk through all this.

Julie Rovner of NPR, thank you.

JULIE ROVNER: You’re welcome.