Obama's health promises backfire
HARRISBURG — Health insurers will terminate coverage for up to 250,000 Pennsylvanians as Obamacare unfolds with a troubled website that has prevented many from enrolling in plans online, the state Insurance commissioner said.
“It's a Kafkaesque nightmare,” said Michael Consedine, the state's chief insurance regulator.
Such cancellations are occurring nationwide, despite “promises that were made” by President Obama that people could keep plans rather than change them, Consedine said.
“People are getting increasingly frustrated,” he said, noting calls to the department are up by two-thirds since the Oct. 1 startup for entry into benefits under the Patient Protection and Affordable Care Act. The law aims to replace policies that did not meet its standards.
In Boston last week, Obama accused “bad apple” insurers of causing cancellations, not his signature health care law.
“One of the things health reform was designed to do was to help not only the uninsured but also the underinsured,” Obama said. “And there are a number of Americans — fewer than 5 percent of Americans — who've got cut-rate plans that don't offer real financial protection in the event of a serious illness or an accident.
“Remember, before the Affordable Care Act, these bad apple insurers had free rein every single year to limit the care that you received, or use minor pre-existing conditions to jack up your premiums or bill you into bankruptcy. So a lot of people thought they were buying coverage, and it turned out not to be so good.”
Asked about the accusation that “bad apple” insurers exist, the White House would not provide the Tribune-Review an explanation.
Consedine challenged the “bad apple” contention, defending the majority of insurers as “good corporate citizens.”
Cancellations are coming about “not because bad actors were making bad decisions,” he said in an interview Friday. “It's because (company plans) were not up to (Obamacare) compliance policies.”
The state Insurance Department issued 13 so-called “market conduct” actions against companies this year, the agency said, and more enforcement activity is under way. Pennsylvania has the fifth-largest insurance premium volume in the country and the 14th-largest in the world, said agency spokeswoman Roseanne Placey.
The department supervises the operations of about 1,700 insurance companies.
Under the Obamacare market exchange, insurance plans may offer more benefits, but they might be costlier plans because of unneeded or unwanted benefits, said Nathan Benefield, a researcher with the Commonwealth Foundation in Harrisburg. Benefield said Highmark, the state's largest insurer, sent him a cancellation letter, and he signed up for a plan costing $90 more per month.
Highmark mailed about 40,000 cancellation notices, said spokeswoman Kristin Ash. As people switch coverage under Obamacare, they should get lower costs and more benefits, she said.
Cancellations largely are occurring with people who had individual coverage, not group plans, officials said.
The “bad apple” comment, coupled with Obama's earlier promise that people could keep health plans they liked, infuriates David Taylor, executive director of the Pennsylvania Manufacturers Association, which represents large manufacturers, businesses, railroads, power companies and individuals.
“That is just another bald-faced untruth,” Taylor said. He said the plan is “larded up” with benefits people don't need. One is maternity coverage for men, he said, an issue that surfaced at a congressional hearing this week.
Kelly Loussedes, a vice president for the Washington-based National Association of Health Underwriters, said she isn't sure what the president meant by “bad apples.”
The association represents agents and brokers.
Obama's aides would not speak to the Trib with their names used for this story. The White House emailed transcripts of press conferences to defend the president's position, attributing the remarks to Obama: “The majority of people in the individual market today qualify for discounted or free health coverage when signing up for coverage through the Marketplace. One study found that 48 percent of people who buy insurance through the individual market will get a tax credit that averages at over $5,500. And 1 million in the individual market today will qualify for Medicaid in states that choose to expand it next year.”
Pennsylvania has a state-styled Medicaid plan pending before federal regulators. It would use federal money to buy private insurance coverage for the poor, and require people to pay toward premiums and show effort to get jobs.
“I'm hearing prices are going up, and benefits are going down,” said Loussedes of the national agents' group.
Sharon Ward, executive director of the Pennsylvania Budget and Policy Center, thinks the trouble will be “a distant memory” as Obamacare advances. There will be “more choices for consumers,” she said.
Brad Bumsted is Trib Total Media's state Capitol reporter. Reach him at 717-787-1405 or firstname.lastname@example.org.