Obamacare To Force Millions To Upgrade Insurance

Despite promises by President Obama that people can keep the insurance they have once Obamacare is in full effect, millions will have to upgrade their policies to meet the benefit standards laid out by the Affordable Care Act. The measure will be in full swing this January.

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RENEE MONTAGNE, HOST:

And you may remember when President Obama was campaigning to get the Affordable Care Act passed. He made this claim many times.

PRESIDENT BARACK OBAMA: If you like your health care plan, you can keep your health care plan.

MONTAGNE: Well, it turns out not everyone can. When Obamacare goes into full swing this January, millions of people who buy insurance on their own will need to look for new plans. That's because many have bare-bones plans that doesn't meet the law's requirements. Kelley Weiss reports.

KELLEY WEISS, BYLINE: Darren Hall runs a pool service company in Sacramento. Since he's self-employed, he doesn't get health insurance through his job but buys it on his own. He says it's worked out pretty well until this spring when his monthly premium spiked.

DARREN HALL: It was about $250 and then it jumped up to almost $300 dollars a month just overnight.

WEISS: So he looked for a better deal. He says he found another health insurance policy for half as much.

HALL: As a small business, you have your ups and downs. So, yeah, every dollar does count. And another $150, that's half a truck payment right there.

WEISS: Hall got this new policy in April and it's another high-deductible health plan. He pays for the first $1,500 of medical care out-of-pocket to meet his deductible. He doesn't get coverage for certain benefits but that leaves him with a lower monthly premium. He says, so far, since he's hardly needed any medical care in the last 14 years, it's been just fine.

HALL: I mean, the amount of times I've been to see a doctor I can probably count on one hand.

WEISS: But Hall says now there's a problem. He's going to have to choose another insurance policy soon because his doesn't meet the standards under the Affordable Care Act.

MICAH WEINBERG: Folks are going to have to buy more comprehensive policies, generally, in 2014.

WEISS: Micah Weinberg is a senior policy consultant with the Bay Area Council. He says a small portion of people will be able to keep their plans. But he says Hall and millions of other people have individual health plans today that won't cut it.

WEINBERG: Most of the policies sold in the individual market are much skinnier than the policies provided by employers.

WEISS: Weinberg says the Affordable Care Act requires all insurance policies to cover 10 benefits, including things like hospitalizations, maternity care or prescription drugs. The idea, he says, is to protect people with a high deductible plan, like Darren Hall, from financial calamity.

WEINBERG: A lot of what the Affordable Care Act does is prevent moments of terror, panic, bankruptcy that we didn't anticipate were even going to happen.

WEISS: Weinberg says Obamacare will do this by making insurers pick up at least 60 percent of medical costs. And it caps out-of-pocket spending for individuals to around $6,400 per year. People can also get help if they qualify to buy a plan on the newly formed health care marketplaces or exchanges. But this won't help everyone. Take, for example, the two million people in California who buy insurance on their own. Only about a third will qualify for tax subsidies.

SARAH AQUINO: I'm expecting that the premiums will increase for those folks that won't qualify for a subsidy.

WEISS: That's Sarah Aquino with Integrated Benefits and Insurance Services. To qualify for a subsidy an individual has to make less than $46,000 a year. But Aquino says most of her clients make more than that. Regardless, almost everyone has to have insurance or pay a fee come January. And Aquino says if that insurance is going to be more expensive, people will have a choice to make.

AQUINO: The penalty for the individual mandate is $95 or 1 percent of your income. So, the question is will people who are healthy and don't qualify for a subsidy come into the system?

WEISS: Aquino says the most important thing is for people to learn what their options are. And, she adds, it's not a bad idea to start now. For NPR News, I'm Kelley Weiss in Sacramento.

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MONTAGNE: That story was produced with the Center for Health Reporting at the University of Southern California.

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MONTAGNE: You're listening to MORNING EDITION from NPR News.

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