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On Second Thought: Why Some Americans Are Losing Their Health Plans After All

In a 2009 speech to the American Medical Association, President Obama promised, “If you like your health-care plan, you’ll be able to keep your health-care plan, period. No one will take it away, no matter what.” This declaration came as the health care law was being written and similar statements were repeated by the President after the bill became law.

Now, as hundreds of thousands of Americans are receiving notice that their current insurance policy will no longer be offered, it seems that is not quite the truth. In fact, it could not be further from it. This came as no surprise to those in the insurance and health care industry who have spent countless hours working to implement Affordable Care Act (ACA) provisions. It was crystal clear that many policies would have to be cancelled in light of the ACA’s ten essential health benefits provision and ban on pre-existing conditions.

A key part of the law is that private insurance companies must provide ten areas of coverage, including:

  • Ambulatory patient services
  • Emergency services
  • Hospitalization
  • Maternity and newborn care
  • Mental health and substance use disorder services, including behavioral health treatment (including counseling and psychotherapy)
  • Prescription drugs
  • Rehabilitative and habilitative services and devices
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services

Plans that do not meet these standards cannot, for the most part, be sold after 2013. This is a big change for a lot of insured individuals. In 2011, the Department of Health and Human Services noted: “62 percent of enrollees do not have coverage for maternity services; 34 percent of enrollees do not have coverage for substance abuse services; 18 percent of enrollees do not have coverage for mental health services; 9 percent of enrollees do not have coverage for prescription drugs.”

In addition, under the ACA, insurers can no longer reject people with medical problems or charge them higher prices for coverage. People with pre-existing conditions that were offered plans at an increased cost will now have their plans cancelled.

Proponents of the law argue that the termination of these policies is a good thing. The whole point of the ACA was to set a minimum coverage standard for all Americans and encourage more robust policies. Eliminating bare bones policies will help everyone in the long run, so they say. Policyholders should be happy that their “substandard” policy is no longer enough.

But what is to be said for those who were content with their policy, as is? Well, it is possible that the forced broader coverage could translate into higher costs. Nothing comes without a cost; those who had a skimpy plan (often, young people) may be getting more in benefits, but could very well pay more in premiums. Some may qualify for tax credits to mitigate higher premiums that could result from the new requirements, but this is not a given in every case.

Insurance plans are required by law to tell enrollees about other options if they discontinue their policy. Individuals who receive notice of a discontinued policy will have the option to purchase new insurance through the marketplaces. Of course, the healthcare.gov has been riddled with shortcomings and delays – so consumers may have to wait to shop for a new plan on the site.

One of the President’s biggest talking points when selling the ACA to the American people was that individuals would be allowed to keep their doctors and their health plans. It is no doubt surprising and frustrating for those individuals who are now finding out they must find a new plan. However, for providers whose services have historically been excluded from plans, this change could generate more business. For example, now that mental health care is an essential health provision, mental health care providers may see an increase in individuals seeking their services.  Services like these that have long been considered non-essential are finding their way back into the spectrum of comprehensive health plans via the ACA. While the cancellation of policies may come as a shock to some people, perhaps they will be presently surprised with the increased range of services and providers they can now access.

By Molly Nicol Lewis
Molly Nicol Lewis is an Associate of McBrayer, McGinnis, Leslie & Kirkland, PLLC.  Ms. Lewis concentrates her practice in healthcare law and is located in the firm’s Lexington office. She can be reached at mlewis@mmlk.com or at (859) 231-8780. 

This article is intended as a summary of federal and state law and does not constitute legal advice.

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