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Why Some Insurance Premiums are Much Higher with Obamacare

2013-11-06 12:52
Health insurance premium for Obamacare

Since the launch of the Healthcare Exchange site there have been mixed reviews from consumers about not only getting into the site. Add to that stories about heftier health insurance premiums from some vocal consumers. While some people are saving significant amounts of money on health insurance from Obamacare (the ones you don’t really hear from), others are being dropped from their existing insurance and having to pay high premiums. The question is why are insurance premiums so much higher for some?

One of the main reasons, stated early on by President Obama, is that many insurance companies - perhaps your present provider even - are not up to par with coverage offered. Companies that fail to meet "minimum standards" of coverage that include preventive screenings, mental health benefits and no annual lifetime coverage limits for example simply aren't allowed in the exchange.

One example is "Florida Blue" who recently dropped 300,000 people from their policies. The company sent out letters informing their members they would be dropped from insurance but they can purchase a more expensive plan.

According to healthcare.gov your insurance plan must have the following: "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; and pediatric services, including oral and vision care."

All of the aforementioned are mandatory. You'll note maternity and newborn care is included, which has some consumers who don't need the benefit riled.

So where does this leave consumers?

Well, the truth is, it leaves healthcare consumers less vulnerable to the financial devastation that is possible from high cost of healthcare.

Plus, substandard insurance policies can be grandfathered in, but it seems some insurance companies instead are opting not to do that, and to instead, drop their lower cost substandard healthcare coverage plans and offer higher premium plans with much better coverage.

Another consideration is that when people look to see what subsidies they may be eligible for their rates may be much lower. Forty-eight percent of people will probably qualify for subsidy which means lower cost prescriptions and health insurance premiums. It's possible some reactions are from initial "sticker shock".

No health insurance plan that is extremely low cost - which probably seemed to suit a number of healthy individuals - is going to provide needed coverage for a major illness or hospitalization.

So did President Obama lie when he said people can keep their existing healthcare policies?

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You can keep your policy if it has not changed and was existent before the Affordable Healthcare Act was signed - and of course if your company does not opt to discontinue your current plan and replace it with a higher premium BUT better coverage plan.

That doesn't mean you can't go shopping. If you receive a letter that your plan is being dropped and replaced with a new one, call your healthcare insurance provider for details. If the new premium is too high, go to healthcare.gov and explore your options.

Insurance companies have the right to drop your existing plan. It is not President Obama to blame if your health insurance premium is going up - at least not directly. It's your insurance company's choice. It is happening because your plan was probably just too basic.

Your provider must notify you in writing 90 days before the plan ends, they must offer you another option unless they decide to cancel all plans in a given state and they cannot turn you down for another plan because of pre-existing health conditions. ‘’

It strikes me as a nurse how quickly we have forgotten the devastation of being underinsured or uninsured when a health crisis strikes. Even more serious was the notion that an insurance provider could drop you for being too sick or completely deny coverage. We are required to have auto insurance or face fines. Not having health insurance is also a dangerous liability that can have far reaching impacts.

Those who don't have insurance and require medical treatment that is never reimbursed have been driving up health care costs for years - and you and I have already been paying for that.

According to an April, 2013 report from the Commonwealth Fund, millions of adults were struggling with medical bills and avoiding needed care due to lack of insurance in 2012.

Hospitals are required to treat anyone needing emergent care. When someone cannot pay they either write off the cost or shift the cost to those who can pay.

The bottom line is there is usually another story behind what you are reading about rising health insurance premiums and cancelled health insurance plans that are the direct result of Obamacare. But if you dig a bit deeper you might find things are not always as they initially appear to be and perhaps not a bad thing. Overall, higher premiums are the result of insurance companies who are dropping plans that don’t meet requirements of the Affordable Healthcare Act that mandates better insurance coverage than many people currently have.

We would love to hear from you to help add to our story. Leave a comment if you have had a good (or bad) experience relating to your own health insurance coverage since Obamacare was officially launched.

Image credit: Pixabay

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Comments

Ms. Blanchard, I wanted to take a second to thank you for writing such a simple article. I currently work in the health care industry as a Health Care Ombudsman and my wife is a RN. The new health care changes have been a major discussion in the recent months and I'm amazed how many people have been misinformed. It is always my goal to stay mutual when providing information to the public, but most importantly, it is my goal to empower individuals to learn and gather information on their own and not simply rely on media. We don’t exactly know the final outcome of the new implementation but it always best to be optimistic even if there is disagreement with the new law. After all, it is federal law. Thank you and I look forward to reading more of your articles!
Pedro - Thank you so much! Your comment is greatly appreciated.
The insinuation that healthcare costs had been rising because of uninsured receiving treatment and then hospitals writing it off is a gross oversimplification. Let's not ignore the fact that the premiums are now significantly higher because the insurance companies have to cover those individuals they would previously deny. The insurance companies surely aren't going to pay for it, they're going to pass the costs on down the line.
Yes, that's true James. They are being required to cover more high risk individuals and provide broader coverage, so premiums are higher. Healthcare costs do go up when others can't pay. It's not an insinuation and is part of the big picture. It is a fact.