Health insurance companies aren’t telling you the whole story
By Consumers Union on Tuesday, November 5th, 2013
News of “cancellation” notices coming from insurance companies has many consumers worried about their health insurance options, especially because many of the notices offer alternative plans that are very expensive. We encourage you to look at the facts before you worry or make any decisions.
First, let’s ask exactly what is happening?
Insurance companies are notifying people with individual health insurance policies that do not meet minimum consumer protection standards that their current policy will no longer be offered. The “cancellation” notices often offer new plans that are expensive, but do not tell consumers about their options on the new health insurance marketplace.
Second, let’s ask why this is happening?
Many of the individual policies that are no longer being offered have very limited coverage, leaving out important services like hospital care or prescription drug coverage. The ACA requires insurance companies to meet more stringent consumer protection standards, called essential health benefits. Some of these benefits are coverage for hospitalization, prescription drugs, wellness services, and mental health treatment. Insurers are also now required to cap costs for catastrophic care.
Third, let’s ask what insurance companies aren’t telling you?
Notices from insurance companies fail to tell you that there are new marketplaces where you can choose better plans with stronger protections and benefits, and that many people will be eligible for upfront discounts on their health plan through tax credits. The alternative plans offered in “cancellation” notices are not your only option, and the price offered is likely higher than what you will pay for a plan on the marketplace that will give you more coverage and security.
The ACA was created to protect consumers from discriminatory practices against people, most notably the millions of us with pre-existing conditions who will no longer be denied coverage. In 2014, approximately 28.6 million Americans will be eligible for help to pay for these better plans through tax credits. You will likely be able to purchase more comprehensive coverage for the same price (or lower) through the new insurance marketplaces.
Finally, let’s take a look at what you can do.
Before you decide to purchase a plan mentioned in your “cancellation” notice, check out your options. The state-run marketplace websites are functioning fairly well, and HealthCare.gov is being fixed. You can also call the toll-free hotline to get answers at 1-800-318-2596, or get help in person with a local navigator.
Our Consumer Reports online tool, HealthLawHelper.org, will help you learn about the options for which you are eligible. It will give you contact information for your state marketplace (or the federal marketplace if you are in a state that chose not to run its own marketplace) and will help explain health insurance terms that you might not know.