Insurance Firms Forced To Cancel Many Individual Policies

More than 12 million Americans buy health insurance on their own, and many are getting cancellation notices because their individual coverage does not meet the standards of the Affordable Care Act. This is causing anxiety and anger — especially since most of these people can't get onto the healthcare.gov website to figure out their options for 2014.

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RENEE MONTAGNE, HOST:

Let's hear more now from Americans who are finding that their health insurance has been cancelled - stories that have stirred up more controversy over the Affordable Care Act.

The insurers sending cancellation letters say they can't continue offering certain policies because of Obamacare. These are policies mainly purchased by individuals, and with cancellations possibly in the millions, a lot of people are angry. They remember President Obama's promise that people who like their current coverage could keep it.

NPR's Richard Knox has been talking to some of them.

RICHARD KNOX, BYLINE: Lisa Dieckman is a retired 59-year-old psychologist in Los Angeles. For years she's bought health coverage from Kaiser Permanente.

LISA DIECKMAN: In October, Kaiser sent me a packet saying they had to cancel my plan because it didn't meet the standards of the Affordable Care Act.

KNOX: Kaiser said she could enroll in a similar plan that does meet the new law's requirements.

DIECKMAN: But what threw me for a loop was that the comparable one, which is the cheapest bronze plan - it's the cheapest thing I could get through Kaiser - is 127 percent higher.

KNOX: Her monthly premiums would go from 219 to 498 dollars a month. She'll probably qualify for a federal subsidy that'll bring that down to around $300 for what she thinks is pretty much the same high-deductible coverage she used to get.

DIECKMAN: I know the argument that Mr. Obama's been making is that you get better coverage, but I'm just putting more money out there that I'm not going get anything back from.

KNOX: John McDonough of the Harvard School of Public Health knows the ins and outs of the Affordable Care Act about as well as anybody. He says the law's effect will be a mixed bag for the 12 to 15 million Americans who buy insurance on their own, not through their employers.

JOHN MCDONOUGH: Some of those folks will find that they're going to get much more affordable options and some of them will find that it's going to cost them more.

KNOX: He says by far most people will come out on top. But it's important to understand the big problem this part of the new law is trying to fix.

MCDONOUGH: The market for individual coverage has always been the most expensive, the most volatile, the least secure part of health insurance in the United States.

KNOX: Individual insurance has always been a year-to-year thing. Each year, many people have been abruptly canceled or forced to drop coverage when their premiums were been jacked up.

DOUG NORMINGTON: Buying my own insurance has been a challenge because as an individual you don't have any bargaining power. So it's generally expensive and not very good.

KNOX: That's Doug Normington of Madison, Wisconsin. A self-employed video producer, he's always been at the mercy of the individual insurance marketplace. When he got diabetes a couple of years ago, he found only one company would take him on. But his $7,200 yearly premium didn't do much good this year when he had to have surgery.

NORMINGTON: That particular episode probably cost me about $5,000 out of pocket beyond my premium.

KNOX: Recently, Normington got one of those cancellation letters, so he's been trying to scope out his options on the beleaguered Healthcare.gov website.

NORMINGTON: The five or six hours I've spent on it so far have not been useful or productive.

KNOX: Neither were government phone counselors.

NORMINGTON: They assign you a number and in a couple instances they would promise that somebody would call me back within two days and then nobody would call me back. So it pretty much sucked - to be honest.

KNOX: He'll keep trying and he hopes he'll get signed up for new insurance in time. And the good news is that, since he has an income of $28,000, the new federal program will help him with his insurance premium. The Affordable Care Act addresses a longstanding inequity in U.S. health insurance: people who get coverage through their workplace have always gotten generous tax subsidies for it, but those who buy coverage on their own haven't. McDonough says that equally important for Doug Normington is that insurers won't be able to reject you if you already have a medical condition.

MCDONOUGH: If you have diabetes, asthma, if you've ever had cancer, if you ever been to see a mental health counselor, they can say we won't cover you or we'll cover you for everything except your diabetes or we'll charge your premiums two or three times as much. Beginning in January 1 across the country, that is no longer legal.

KNOX: Meg Lanfear knows how important that is. She's a Chicago area music teacher who put off having a child for two years because nobody would cover her since she'd been successfully treated for cancer.

MEG LANFEAR: I basically waited until Blue Cross would insure me. So we just delayed our plans, basically.

KNOX: Lanfear's coverage just got cancelled too, but she's happy she'll be able to get new insurance to cover the birth of her second child, and under the new law maternity care will be standard.

LANFEAR: I don't even know if I can wrap my mind around it, being a standard. It's been such an issue and ordeal. But my feeling is that if the risk gets spread across many people, whether it's cancer care or maternity coverage, I think we all come out ahead in the end, whether we end up using part of our insurance or not.

KNOX: After all, that's what insurance is all about. Richard Knox, NPR News.

MONTAGNE: It's NPR News.

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