President Obama did not lie.
He did not need to apologize.
President Obama said, “The government is not going to make you change plans.” That was truthful. Insurance companies are to blame for health plan cancellations.
Health insurance companies have never lived with the threat of defection from dissatisfied customers the way other businesses in the private sector do. They don’t know how to finesse individuals; they’ve never needed to. In other words, their customer service skills are non existent.
The Patient Protection and Affordable Care Act’s (PPACA, popularly known as Obamacare) competitive marketplace will make the private health industry pay attention to customer service, satisfaction, and loyalty.
At a press conference on June 23, 2009, President Obama made a promise about what would become the PPACA the following March. “If you have your plan and you like it… the government is not going to make you change plans.”
So then why are some Americans with individual coverage receiving cancellation notices from their insurance companies?
The cancellations are a result of “grandfather” rules set in place by President Obama’s Health and Human Services Department. The rules exempt individual health insurance plans in existence before March 23, 2010 (the day the PPACA became law) from many of the new regulations, benefits, standards and consumer protections created by the PPACA. Only 4% of Americans with health insurance purchase it on the individual market.
This “grandfathering” was done so individuals with older non-compliant plans wouldn’t automatically be forced to change insurance coverage due to the enactment of the PPACA.
But, the rules state that policies would lose their “grandfathered” status if insurers made changes that significantly burdened enrollees with lower benefits and increased costs. At that point, the insurance policy must come into compliance with all the consumer protections of the PPACA.
So, not liking the restrictions and the inability to increase costs without increasing benefits, insurance companies decided to dump these non-compliant plans.
In reality, the plans being cancelled are “junk” insurance.
“Junk” insurance looks like this:
•extremely low monthly premiums
•extremely high deductibles
•insurers can cancel coverage when a person becomes ill
•lifetime limits on benefits
Americans who were unscrupulously sold “junk” insurance will realize the advantage of more extensive coverage which adheres to the consumer protection benefits of the PPACA. They will further realize that while they save on “junk” plan premiums, were they to become seriously sick or injured, they wouldn’t be able to pay the deductibles. One serious illness for a “junk” policy holder could cause financial ruin.
The PPACA addresses the fact that the individual health insurance market has been a nightmare for consumers: more costly than the equivalent job-based coverage, and for those in less-than-perfect health, unaffordable at best and unavailable at worst.
Insurance companies ripped off Americans for years with lousy individual “junk” health plans. The PPACA is designed to fix that.
Richard O. Schwab was formerly associate head of school, and middle school
head, Cincinnati Country Day School. He is founder of Glendale Organizing
For America Community Team http://www.gofactessays.wordpress.com