Blue Shield forced to delay canceling 80,000 health insurance policies

[alp227]

Source: San Jose Mercury News

The clock is ticking on 1 million Californians forced to buy new health insurance because their plans don't comply with the federal health care law, but on Tuesday one of the state's biggest health insurers was forced to give its customers a three-month reprieve.

Blue Shield of California must delay canceling health insurance policies that cover 119,000 people, many of whom are scrambling to buy new policies on the state's new health insurance exchange -- and consumer advocates are urging other insurance companies in California and the rest of the nation to follow suit.

"It's not fair that just one group of policyholders has extra time," said Jamie Court, president of Consumer Watchdog.

The California Department of Insurance threatened to sue Blue Shield if it didn't hit the brakes on canceling thousands of policies, claiming the insurer was using the new health law to force its customers into more expensive coverage that includes too few doctors and hospitals.

Read more: http://www.mercurynews.com/nation-world/ci_24457802/blue-shield-delays-cancelling-more-than-115-000

[tridim]

1. The insurance industry had years to prepare for the ACA rollout

And now they are losing customers because their overpriced "free market" service sucks.

It's really ironic that BCBS hasn't tried to cancel my individual policy yet, but I'm a dream customer who never gets sick. They are sending me rebate checks almost monthly now. Keep em coming!

[Bandit]

2. Rebate checks are another example of how ACA helps the insured.

I bet you never got a rebate check before the Afordable Care Act was signed into law four years ago..

[tridim]

3. Hell no! I've recieved five checks so far in a little over half a year.

It cut my premium in half.

I don't understand why they just don't lower their prices. Demand for their product is way down and Econ 101 says that's what they should do. Dumbasses.

[Bandit]

4. Part of the ACA was to mandate how much of your premium went to health care and not administration

85% I believe is the amount that has to go toward Health Care and they have to refund you any excess. Rebate checks are a new feature only since ACA was signed into Law.

[okaawhatever]

5. Until they get all the other enrollees on their plans they may not have accurate data. Especially

with the pre-existing conditions exemption. I also think the number of folks who haven't had insurance or were putting certain things off due to high co-pays will flood the doctor's offices once the policies are in force. Just my two cents.

[alc]

6. MLR can cut both ways - and this is bad for consumers in 2015

The purpose of the MLR is to make them spend 80-85% or premiums on medical costs. It also means the only way to increase profit is to increase medical costs. When costs go up they will argue that premiums should also and they have an incentive to make costs go up since that's the only way to increase profit on ACA policies (they'll gladly take more customers but also want higher $/policy). These cancellations make costs go up for 2015 ACA plans.

By delaying cancellation, they are allowing people to stay on the old plans longer. People with pre-existing conditions have to get ACA plans if they want insurance. People who need more than their old plan covers will switch sooner if they need medical care that's not covered, otherwise will keep the cheaper plan.

In other words, people with higher medical costs will purchase ACA plans sooner than those without medical needs. The insurers will request premiums for 2015 policies based on how much it costs to cover people with ACA policies at the time they request premiums. Regulators may be able to push the premium requests later than planned (April is planned I think) but they will still have more than 2x as many months where people who NEED medical care are more likely to sign up than those who procrastinate or who have "crappy" but cheap plans. That means everyone's rates go up in 2015.

There are many reasons regulators won't push back much on requests for higher premiums
1) The healthcare.gov debacle is screwing any insurer who is approaching the ACA exchanges in good faith

2) Insurers will trust their 2014 numbers more than government predictions for 2015 (2014 isn't going as planned and they won't take the chance again). They will drop out of the exchange if they don't expect good profits in 2015. Regulators cannot afford to have insurers drop out, especially in states with few insurers or poor geographical/hospital/doctor coverage.

3) Insurers with counter reduces premiums with coverage cuts and scream "death panel".

4) Insurers will jack up deductibles and co-pays

5) Insurers will drop reimbursement rates and more doctors and hospitals will stop accepting ACA insurance.

[cynzke]

8. Correction to No. 5.

All insurance plans must incorporate the ACA mandates so doctors and hospitals can't avoid that. This eventually will reach the employer plans as well. Can doctors/hospitals opt out of the public exchange plans and contract with the private carriers? Don't think that would be allowed. Especially if they get gov. funding of some kind.

https://www.ehealthinsurance.com/affordable-care-act/misc_page/what-types-of-health-insurance-can-you-buy-in-2013

[DreamSmoker]

7. Bump

Every interview i have heard from People who lost coverage has one thing in common..
All and I mean All had the least expensive Plans with deductibles most People could never afford..
I heard one woman claims she was going to loose her Doctor after he treated her Cancer as well as here plan that costs her $58 a month..
All claims I heard to date that complain were under a similar cheap Plan..

Have you ever had to choose a Plan yourself??
If so then you would know that a descent affordable Plan is a hell of alot more than $100 or less a month...

In 2001 I was laid off from my full time Job..
Employers will extend your Medical insurance at your costs if you choose. Its called COBRA in California..
Back then in 2001 my costs for individual coverage was $700 a month.. You can only imagine what the cost was for Family coverage..

[cynzke]

9. Don't believe those stories.

First, they are repeated over and over. Its a multiple rendition of one or two stories. These people were paying for a piece of paper. No way would the insurance company keep her if she had cancer. I saw a case on Judge Judy once where the defendant was being sued for selling a PHOTO of a cell phone on Ebay. The plaintiff was misled to believe they were buying a REAL phone only to be shocked when they received the photo in the mail. The defendant did reveal on their ad, they were selling a photo in very very small print, but Judge Judy ruled on the plaintiff's side, because that was no excuse, the INTENT was to defraud.

[thesquanderer]

10. Not all.

I have a plan that is 2-something a month, that is being discontinued on 12/31. The plan suited me well... yes, it had a high deductible, but pretty much everything was covered, with no caps. Under ACA, I will be paying in the range of double. I will have a lower deductible, but I probably won't need enough care to reach either deductible, I'll just be spending thousands more on premiums.

Still, even though I'm worse off, I accept that, as a whole, we're better off with ACA than with what we had before.