This rings a bell

From this morning's Wall Street Journal:
Angered consumers are taking legal action over being dropped. On Monday, two California residents filed a lawsuit in a Los Angeles state court against Anthem Blue Cross, operated by WellPoint Inc., WLP +0.69% alleging that the insurer misled them into altering individual policies that led to them being canceled this year. In one case, a woman in her 60s upped her deductible, by $1,000, to $6,000 in return for lower monthly payments. In another, a health plan was upgraded to include more robust coverage. 
"This was an orchestrated effort by Anthem Blue Cross to get as many people off of these grandfathered plans as possible," said William Shernoff, a Claremont, Calif., lawyer representing both plaintiffs. A WellPoint spokeswoman declined to comment, citing the pending litigation.
We made trivial changes in coverage last year, too, and were vehemently reassured by Blue Cross that it would have no impact on our grandfathered status.

8 comments:

Grim said...

Good. It is always a temptation of insurance companies to leverage their advantage in legal expertise against their clients. They should be punished for doing so, not because it's necessarily immoral to do so, but because we should all want a system in which you don't have to be a lawyer to understand and purchase what insurance you need.

Elise said...

I'm reluctant to blame insurance companies on this one. For example, if I'm reading the WSJ article correctly, the only reason the California companies didn't allow people to extend their current policies was because the State forbade them to do so:

California is one of only a handful of states requiring that by Jan. 1 all health plans sold to individuals, by insurers participating on its exchange, comply with the health law, including those policies that might have expired next year. Most states already allow consumers to stay on their current plans until those plans expire, even if that is in 2014.

I'd also like to know in the California examples (and in T99's situation as well), whether the plan itself is going to survive. As I understand it (and I may be wrong), a plan can pass grandfathering while some people on it do not; or a plan itself can fail the grandfathering test.

If the plans are surviving the grandfathering test but individuals are not because of misinformation (in T99's case) and non-information (it appears in the article's examples) that's on the insurance companies. If the plans themselves are not surviving the grandfathering test, that has nothing to do with the insurance companies.

One more note. Supposedly any time an insurance company has sold insurance since ObamaCare passed, they have to explain to the purchaser how the sale affects grandfathering. I wonder if they've been doing that.

E Hines said...

One of the grandfathering criteria for a plan was that it could not change. A premium rise, apparently, of $5.26 constituted too big a change, and the plan lost is grandfather eligibility.

Included in the Obamacare requirements--bragged about by supporters as making the plans in ObamaMart somehow better than the ones extant--is the requirement that every plan carry some minimum coverage: prenatal and maternity care, for instance, contraceptive coverage, a total of some 10 items that had to be included. Any extant plan that did not meet these requirements was illegal and had to be changed. Such a change was too big to continue eligibility for grandfathering.

Yet the Obamacare supporters blame all the cancellation of these plans on the insurance companies: they shouldn't have been offering such substandard plans in the first place. Obamacare supporters are the only ones fit to decide what's good enough to be sold, after all. The rest of us are too dumb.

Eric Hines

Texan99 said...

I don't blame the insurance companies for complying the law to drop coverage. I do harbor some resentment for their telling me I could safely make a minor change in my coverage without destroying my grandfathered status. Of course, it's possible that the regulations were changing fast than they were able to keep up with, or that the rep I talked to was simply ignorant. I should have known better. Anyway, I always assumed they'd find a way to get rid of my insurance, as I've often said.

douglas said...

When did the insurance companies get the regulations? It takes a bit of time to write those thousands of pages of regulatory blather. Then they need time to sort through it all, and it would seem that the law was written in such a way as to allow regulatory finagling, and no doubt the regs were written quite narrowly, whatever the insurance companies did or didn't do.

Texan99 said...

They began writing the regulations right away. In mid-2010 people got wind of how strictly they were being written. Insurance companies warned the Obama administration and legislators that, if this approach were followed, almost no one would qualify as grandfathered. Republicans floated a bill to force HHS to loosen up the grandfathering provision. Democrats voted it down in lockstep, claiming that the Republicans were being paranoid. And that includes Mary ("Keep Your Policy") Landrieu.

This was not inadvertent.

douglas said...

Of course not. It's not like they didn't know that almost no policy remains unchanged for more than about two years for one reason or another.

The fact they won't revise the regs unilaterally tells us all we really need to know.

I suppose, if we're being strategic, we'd better figure out how they see this happening, so we can get ahead of their OODA loop. I'm not sure everyone at GOP HQ doesn't think Obama has just gotten himself into an irretrievable mess when it's really just the website (which is a joke to most people, but no more than that), not the people falling out of the system.

Texan99 said...

I think it's important to keep getting the word out there to people who are barely paying attention, or who are getting only the happy talk about upgraded plans at reasonable, subsidized price from their newspaper or TV. Gradually millions more people will see something like this happening to them, of course, as more employers elect to cover only the employee and not the family, or drop their plans altogether, or get rid of their Cadillac plans to avoid the penalty. They should be warned, and they should see how their own loss fits into the big picture.

I finally was incautious enough to pick up the phone and talk to my oldest friend yesterday. I told her what was happening and got back a casual "Oh, I had to pay a lot for some COBRA insurance once," followed by a 20-minute monologue about how unhappy she is about something her husband did, followed by a request for my advice and help. Things didn't go well from there. OK, that just tells you there's something wrong with the friendship, but the other part is that she obviously had no particular idea this was happening, and cared less. The word is getting out better than it normally does in these situations that the MSM doesn't like to talk about, but we need more.