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The Real Reason Insurers are Canceling Policies

Posted: Nov 20, 2013

A few years ago, when talking to the insurance coordinator person at my MTSO, I remember a comment she made about the new (yearly the insurance changed to either a new company or new, worse coverage that cost more) high deductible plan.

She said, "It is so employees will be more invested in their care."

At that point the high deductible policy was a new choice which luckily was not costing too much less than the other more comprehensive one. Now there would be few who could pay the premiums for the comprehensive one, since they have halved our salaries and upped the price of premiums, so basically that option is for anyone who does not need any of their salary to actually live, and even that insurance is not so great, with not many copays and everything applied to the deductible despite the large premiums.

So, if by invested you mean investing every dollar you have if something goes wrong, yeah, she was right. Eventually, when my MTSO got taken over by one of these huge ones and my pay cut to literally half what it was 3 years ago and perilously close to minimum wage with taking away "bonuses," I decided to forgo insurance completely, since why pay the premium so it will discourage me to go to the doctor? Even $80 every 2 weeks is expensive if you can't ever use it - that's $4000 a year for basically nothing, and if you do have to use it? I imagine it will cost much, much more.

This article illustrates how the insurance companies have always been concerned with only one thing, profits, and canceling/changing policies is something that has been going on for a long time.

Next time I hear "benefit buydown" I might have a slight clue what that is, Wall Street again trying to profit at the expense of the middle class and poor people.

___________

"Before Obama signed the Affordable Care Act, insurance companies already were making rapid progress in implementing their business plans of "migrating" their customers from traditional managed care plans to so-called "consumer-directed" plans, the industry euphemism for high-deductible policies. At the same time they've been requiring us to pay more out of our own pockets for care, they've also been implementing a strategy of reducing benefits. Investors and Wall Street financial analysts refer to these common industry practices as "benefit buydowns." That's another euphemism, by the way."

;

I have a high deduc plan - with

[ In Reply To ..]
A health care savings account and I love it. I actually end up paying less out of pocket, including the monthly premium, than I did when I had a regular PPO plan.

Is it for everyone? No, but don't knock it if you haven't tried it.

The thing is - have you every really had to use it?

[ In Reply To ..]
I mean really, as in you are hospitalized for an unavoidable procedure that happens very quickly, such as appendectomy or cholecystectomy. The idea of the high deductible and HSA is not bad in itself, but I think ultimately the proof is in what happens when you truly have to claim on a major hospital admission.

For example, considering an appendectomy costs about $28,000 national average and it's not like you can put it off, if you have to pay your deductible plus a percentage of that unplanned-for cost (say your deductible is $5000 + 25% of $28,000 ($7000) = $12,000 in one short hospital admission) plus whatever the insurance companies deem is over their recommended allowance (anesthesia is often reimbursed at a much lower rate than what is charged, you need to pay the difference) it can be devastating for most of us.

So if you have had any major claims such as an appendectomy or other urgent op, it would be interesting to see if you still think it is so great, or maybe your policy is better than most for that.

But for the most part these disaster policies are just great until you actually have something go badly wrong and then you are looking at bankruptcy.

Yep we have - love my HSA.

[ In Reply To ..]
Both my husband and son has surgeries this past year and the plan was quite beneficial. See, we don't get major medical care very often, but we still contribute to the savings account every month. We get annual checkups for the kids, but they are covered 100%. Plus, my husband's employer contributes $1,000 per year to the savings account. We have a portion of our contribution invested in some mutual funds through the plan, so that helps the money grow as well. Therefore, we had enough money in the account to cover the deductible and the out-of pockets. Even if we didn't though, and had to pay straight from our own checking account, we could eventually reimburse ourselves from the savings account once enough money was in there, which I have done before without issue.

Also, the plan we have covers 90% of in-network expenses, so given your example, we would only pay $2,300 after the deductible is met, which is only 2,500 per person (5K for family).

As an aside, you can use the savings account for other non-medical expenses if you need to, although there are taxes and penalties applied via the IRS.

What you are describing is actually a - comprehensive insurance policy

[ In Reply To ..]
Which sounds like it would comply fully with the ACA requirements completely! So why would you be worried about that?

Frankly, any policy that covers 90% and does not require cost sharing is much more comprehensive than what my MTSO offers, even for the comprehensive policy, so what you have is a great policy.

I have never even looked at those HSAs because in my household there is never extra money at the end of the bills! I think with many low income households this is the case.

So I hope you can appreciate that this is not for everyone and that for people without money to put into the HSAs there should be something better than what I described to you above, with the low premiums and the high cost sharing. Even without your HSA the deductible of $2500 each and 90% payment (without the 25% mentioned above which I would be required to pay with my MTSO insurance) is good.

A few years ago when I was making decent money I had considered starting an HSA, but then my MTSO was eaten by the big MTSO and the pay went down and the benefits got worse.

I think what you described above would not be canceled by the ACA since it complies with it, and it will be a long time before true single payer happens in this country. Bear in mind the policies that are canceled are really bad policies that penalize poor people and make care unaffordable, not policies such as what you have described, although I think the HSA comes into play and therefore income and ability to save as well, so not entirely objective criteria.

Umm. Issue? Don't know where you're getting some of your comments - I love my HSA

[ In Reply To ..]
I think you're confused? I've not been the only person participating in this conversation, just so's ya know. I have only spoken on my experience with the HSA.

For the record: I love my plan, it's not being canceled, and I don't have a problem with it. I never said I was worried about it going away. And, I know it's not the plan for everyone, but it works for me and a lot of other families I know.

Back to my original premise, which was a comment to the original starting post: I think for a person to knock high-deduc HSA plans as a waste before even using one is not valid argument against them.

Whoops, sorry - I did get mixed up

[ In Reply To ..]
With another thread.

I think your plan sounds really good, but not for someone with not a lot of disposable income, unfortunately, and that's why I am looking forward to the changes with the ACA (which obviously won't affect you).

Good to know that some people are still getting a good deal and can afford to save.

You're making random assumptions - I love my HSA

[ In Reply To ..]
We don't have any disposable income, don't know why you would think I do. Our combined income is a touch less than 3K a month and we're a family of 5.

And, the ACA has affected us. The premium for our plan will be going up by $150 next year thanks to the law. Please don't tell me it's "because the insurance company wants it to" because we haven't had a rate increase in 5 years. Yes, 5 years. The only silver lining in the rate increase is the fact that it's a pretax deduction and thus lowers our taxable income.

Also, we don't save money because we "can." We save money because we have to, because we don't have disposable income that we can call in in the event of an emergency.

All I can say is - you have done very well

[ In Reply To ..]
Sorry if I made assumptions. You are obviously very good at managing your budget.

Mine was cancelled and the letter was specific - because of the ACA

[ In Reply To ..]
our policy doesn't comply with what the ACA requires. Hence, it IS because of Obamacare/ACA that our policy has been cancelled. It's like that for thousands of other people too. I don't care how many liberal talking heads are putting out false information that none of the cancellations are because of OC/ACA. When the letter states they are dropping us because it doesn't comply with ACA/OC then that is exactly why it was cancelled.

what part of the ACA makes your insurer - NOT offer a compliant policy?

[ In Reply To ..]
Your insurer is making a choice, plain and simple. Nothing about the ACA prevents your insurer from offering a compliant plan - other than their profit margin.

Do you not understand that - anon

[ In Reply To ..]
Some people LIKE the coverage they HAD? That they don't NEED or WANT the "compliant" benefits? That maybe they were not only happy with the coverage, but happy with the PREMIUM? Do you not get that premiums for compliant plans can be MORE that what someone can afford?

The ACA has screwed over a lot of people.

I do - sm

[ In Reply To ..]
do you not understand that your insurer doesn't have to raise your rates if it doesn't want to?

Right, right - mathless world

[ In Reply To ..]
Where does the money come from to pay the extra claims if they don't increase the premiums? Oh, that's right, you're probably the same person who is all for shorting the doctors on top of screwing everyone's insurance around.

And no, you' don't get it. You are completely fixated on the insurance companies. You really don't get the fact that INDIVIDUAL PEOPLE don't want this. Your patronizing tunnel-vision needs to be expanded.

you're right, you're so right - sm

[ In Reply To ..]
How did you know? That's right - I AM the person who wants to short doctors and screw everyone's insurance around. And how patronizing of me, too. Thanks for pointing that out.

Fact for fact - it does not cost $3000 to turn on a CAT scanner. It does not cost $2000 to perform an echocardiogram. Nor will you become pregnant or develop hepatitis just because your insurance covers those diagnoses.

Pretend one million people paid $100 per month for health insurance. That's 100 million dollars. Per month. I would hope that an insurance company could manage their income and fiduciary responsibilities well enough to make that equation work.

But that's not how it works - sm

[ In Reply To ..]
1 million are not paying 100 each. Not everyone is paying the same thing. Some will get it free, some will have to pay a few hundred a month, some will have to pay 1000 and more. That is because they are exempting some people and charging others double and triple to pay for those who aren't.

Oh and by the way, my insurance carrier is going out of business "because of the affordable health care act". Do you need me to scan my letter and send it to you, so stop calling me a liar. I have the letter, I know what it says. I no longer have the time or desire to try to keep explaining that here to people who won't listen to what is happening in the country. When a letter specifically states due to the ACA they will no longer be covering us that means it is because of the ACA. Stop calling everyone who you don't like what they are saying a liar. We have the letters, we got the notices. You are not sitting here reading this with us.

I didn't call you or anyone else here a liar - so please

[ In Reply To ..]
cut it out with attention-seeking allegations. It's very unnecessary and confrontational.

Post after post after post - sm

[ In Reply To ..]
You may be totally innocent of this, but posters are are basically calling other posters liars. Not saying you are one of them, but posters will write that they got a letter they lost their health insurance because of ACA (their policies don't comply with ACA), to be met with the liberal talking points that it wasn't really because of the ACA with this long explanation of how they don't really understand what's going on, it's not the ACA/OC (even though their letters say it is). They get patronizing replies with every explanation as to why people (whom they don't even know) lost their insurance, really didn't lose their insurance, it's the republicans fault, it happened under Bush, we're too stupid to understand what our letters says, etc, etc, etc. Or they pull in articles that are written by members of the party trying to pass this as though it's validating it's not because of the ACA, its those big nasty insurance companies or republicans fault. I keep reading that here over and over and over. So, no, maybe you didn't come out and state "you are a liar", but your words pretty much say it. After all we're just all too stupid to fully understand all the intricacies of OC.

Are you not the poster who replied to me "what part of the ACA makes your insurer not offer a compliant policy".(which by the way my insurance carrier is no longer insuring anyone because of ACA). If that wasn't not you then I apologize. But my message stands for other posters who are calling us liars.

P.S. - Do not tell me to cut out anything. I am free to post what I want to post. Besides a little sympathy towards people who are/have lost insurance would be nice. People were screaming about how they are so concerned about making sure everyone in the country gets health insurance, but when we lose it the concern is no longer there.

....after post - sm

[ In Reply To ..]
Go back and read the posts. Look at how many times I am met with "you don't get it," "what don't you get," "you don't understand." Then I'm told I am the person who wants to screw everyone's insurance.

I am not being aggressive with you, I did not call you a liar in any way, shape, or form. Just because you don't like my posts doesn't mean I am DOING something to you.

If you want to call me a liar, you are clearly free to do so. It's not my integrity on the line, it's yours.

What a self-centered reply - sm

[ In Reply To ..]
The poster asked that you look at her situation with some empathy, rather than the patronizing attitude you've been conveying and this is what you say?

Unbelievable. You're coming across as a rather nasty person, fyi.

I patronized no one; I asked not to be called a liar. - sm

[ In Reply To ..]
I wonder how you would characterize your own post here. Thanks for calling me nasty, patronizing, and self-centered. Pretty over the top.

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