As the Affordable Care Act (ACA) settles in it has been come increasingly clear that not everybody will be able to keep their plan. The reason why health insurers are canceling health plans, if one was to a little digging, is really simple.
Due the ACA or Obabacare there have been specific mandates in what is needed to be offered in every health plan in terms of what is provided as coverage and some of these specifics can found on pages 36 through 38 of the actual law (if somebody just read this before they voted to pass it things may have been different).
1) The biggest sticking point, which can be found on page 36, and the one caveat that most supporters of Obamacare preach: Health Insurers must accept EVERYONE, even those with “pre-existing conditions”.
Meaning, health insurers have to accept everyone who applies no matter what, the exact quote of this rule can be found on page 36 and states:“A group health plan and a health insurance issuer offering group or individual health insurance coverage may not impose any preexisting condition exclusion with respect to such plan or coverage”.
The problem with this sticking point should be clearly obvious: no matter what the conditions, no matter what the medical history a health insurer must accept EVERYONE who applies.
So, let’s say a person who is a habitual drug abuser applies, they get accepted, or even that person who happens to be obese, who also happens to walk in and apply for coverage while eating 12 Big Macs, they too get covered.
And what can the health insurers charge these pillars of health?
Well, that is defined also by Obamacare and that exact quote can found on page 37, which is: “rate shall vary with respect to the particular plan or coverage involved only by:
(i) Whether such plan or coverage covers an individual or family;
(ii) Rating area
(iii) Age, except that such rate shall not vary by more than 3 to 1 for adults
(iv) Tobacco use, except that such rate shall not vary by more than 1.5 to 1”
Due to this rule, current health plans can no longer use factors of health to determine the cost and it severely limits them in the ability to keep costs lower for those that are healthy.
2) Page 38 then drives home another factor that impacts health insurers as well, as they, under law, have to provide “Renewability of Coverage”, meaning “if a health insurance issuer offers health insurance coverage in the individual or group market, the issuer must renew or continue in force such coverage at the option of the plan sponsor or the individual, as applicable”
Once a health insurer accepts an applicant, no matter what, unless the application is found to fraudulent, the health insurer must continue to provide coverage.
Again, if the applicant is found to be a habitual drug user or extremely unhealthy by choice, they still get care.
Now, it should be said that this also works in favor of the insured, as they know they will not lose health coverage no matter what too. So, for every con there is in Obamacare there are also some pros too.
In fact the only health status that has any consequence on who can get coverage is smoking and that health status is only impacted by the amount a premium can be charged.
Because of these two rules, which are clearly stated in the ACA in order for an insurance company to possibly break even, they have to raise rates on healthier younger subscribers because they can only charge subscribers by 3 times more based on age and even for those that are unhealthy or deemed to be a “high risk” the maximum that can be charged under section “IMMEDIATE ACCESS TO INSURANCE FOR UNINSURED INDIVIDUALS WITH A PREEXISTING CONDITION” on page 24 of the ACA is “4 to 1”.
3) But the hits don’t stop there, because under Obamacare, on page 43, where it clearly details the “PRESERVATION OF RIGHT TO MAINTAIN EXISTING COVERAGE” it also details what every health plan must, also include in terms of coverage which are, to quote the ACA:
- Ambulatory patient services.
- Emergency services.
- Hospitalization.
- Maternity and newborn care.
- Mental health and substance use disorder services, including behavioral health treatment.
- Prescription drugs.
- Rehabilitative and habilitative services and devices.
- Laboratory services.
- Preventive and wellness services and chronic disease management.
- Pediatric services, including oral and vision care.
Basically, if you are in an individual or a group plan the providing health insurer must, by decree of Obamacare, provide at least these 10 parts of coverage no matter what in your 2014 health plan or else the health plan is not creditable under the Individual Mandate and you will subject to a fine for not having health insurance.
This means that even if a person is, say, a 55 year old single male, who has had a vasectomy and may be in a same sex relationship the coverage that must be provided in the plan will include “Maternity and newborn care”.
Even though President Obama stated, numerous times, that “if you like your plan you can keep it” health insurers can NOT supply it for you due to LAW if it does not include these types of coverage…your health plan must be canceled
