It’ll Get Worse Before is Gets Better

The United States is six weeks into the Affordable Care Act and it’s been as chaotic as predicted. While the greatest computer science minds from Silicon Valley try and fix the plagued website, bigger problems exist for hundreds of thousands of Californians uniformly booted from their insurance coverage — despite guarantees from the Obama administration that, “If you like your insurance plan, you will keep it. No one will be able to take that away from you.” As it turns out, insurance companies can. Insurers dropped 279,000 Californians thus far, with  Kaiser Permanente terminating policies for 160,000 customers and Blue Shield of California terminating 119,000 policies. Two million consumers nationwide received policy cancellation notices, with New Jersey residents taking the biggest hit at 800,000 residents’ policies terminated. Why is this happening?

Under the Affordable Care Act, insurance companies must offer policies with the 10 Minimum Standards, including maternity care, emergency visits, mental health treatment, pediatric dental care and prescription drug coverage. Essentially, many of the terminated plans aren’t comprehensive enough to comply with the new law. This is good in some ways as women and children are now guaranteed comprehensive coverage, but it is frustrating for consumers who don’t need or want more coverage, but will still experience fee increases. Residents must now enroll with new employer-based insurance plans or sign up with Covered California, the state’s health care exchange.

To date, 16 million employer-insured Californians aren’t affected, including individuals with “grandfathered” policies purchased before March 2010. Most consumers must have health coverage starting next year or pay a fine of $95 per adult or 1 percent of their income, whichever is higher. Until the is fixed, many consumers will remain in limbo until the site is up and running to see if they qualify for a tax-based subsidy.  In the meantime, folks in the middle-class should prep for a huge rate hike — upwards of 30 percent — as ailing, lower income residents enter into the healthcare system they’ve never had access to before.

However, premiums would rise regardless of changes from the healthcare expansion. The average individual premium will climb 9 percent next year because of rising healthcare costs and increases in medical provider reimbursement, according to Milliman, Inc., a consulting firm based in San Diego. CLICK HERE for more information on the Affordable Care Act. For more information, contact Alicia Berhow, Vice President, Workforce Development.

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