White House Press Secretary Jay Carney admitted on Monday what hundreds of thousands of Americans have known for a while now: under the Affordable Care Act you might lose your old health insurance plan. At a press conference reporter Ed Henry asked Carney if he would "admit that when president said, if you have a plan, you'll get to keep it, that that was not true?" Carney replied that President Obama was clear from the beginning that Obamacare would raise the bar on insurance plans, so people would know that their plan covers mental health benefits, preventative care, no annual or life time limits, etc. Some existing plans don't meet "those minimum standards," though some "can be grandfathered if people want to keep insurance that's substandard."
Well, plenty of people seem to want to keep their substandard health insurance. Florida Blue, a major health care provider in the sunshine state, is dropping the plans of 300,000 Floridians that aren't compatible with the higher standards of Obamacare, including the GoBlue 91 limited liability plan of 56-year-old Dianne Barrette. CBS News profiled her this morning. "When I got this bill, I was outraged," Barrette said. Technically she didn't get a bill — last month Florida Blue wrote to let her know that her old plan was being discontinued and she'd be offered a new, more expensive but more comprehensive plan, in its place. Currently she pays $54 a month. The new plan will cost $591 a month. "What I have right now is what I'm happy with, and I just wanna know why I can't keep what I have," Barrette asked.
Well, here's why.
Yes, she's losing her old plan and her premium is definitely going up.
Even after subsidies are added in — Barrette said she doesn't know what subsidies she's eligible for because, Healthcare.gov doesn't work yet — she'll still be paying more than $54/month. According to Kaiser's Subsidy Calculator, however, she's probably eligible for a subsidy of at least $2,200 a year if she makes $45,000 a year or less. According to a 2008 summary of GoBlue plans, Barrette's GoBlue Plan 91 was "targeted toward the working uninsured and early retirees with annual household incomes between $25,000 and $50,000."
Okay, but Obama said she could keep her plan! Obama lied!
Regardless of what Jay Carney said, yeah. In June 2009 President Obama said the following in a speech on healthcare reform:
I know that there are millions of Americans who are content with their health care coverage – they like their plan and they value their relationship with their doctor. And that means that no matter how we reform health care, we will keep this promise: If you like your doctor, you will be able to keep your doctor. Period. If you like your health care plan, you will be able to keep your health care plan. Period.
However, the health care law that was passed in 2010 outlined 10 essential benefits every plan has to provide: "ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care," according to Healthcare.gov. So while you can probably keep your doctor, you can't keep you bare bones limited liability plan.
Barrette's plan didn't offer most of this. According to the same GoBlue summary mentioned earlier, and a GoBlue representative, her plan:
- Only paid "up to $50 per provider per date of service for covered services."
- Discounted medicines, but didn't cover them. "Contraceptives and self-injectable drugs are not covered. GoBlue pays up to $5 or $15 per prescription, depending on the plan purchased."
- Didn't cover maternity/pre-natal care or hospital visits.
(Update: Comparing these summaries of benefits and coverage for the defunct GoBlue 91 plan and the new BlueOptions Essential (HSA) 1419, the main advantages of the new plan are the $6,250 cap on out-of-pocket expenses in-network, free preventative care/screenings and immunizations, no charge or a $4 copay on some prescriptions and free eye exams and glasses for kids. The GoBlue plan offers a $50 discount on all in-network services, and the patient pays the difference between that and the rate "negotiated" between Florida Blue and the provider. There's also no out-of-pocket maximum under that plan.)
But Dianne Barrette's new plan is 10 times as expensive!
That's true, though we don't know how much her new plan will cost her after her subsidies. More importantly, in Barrette's case you can't really compare her old plan to the new plan. Under her old limited liability plan Barrette wouldn't have been covered if she was admitted to the hospital, for instance. Limited liability plans have been controversial for years. In a 2011 USA Today article on the rise of limited liability plans, Julie Appleby wrote:
Proponents say the limited plans should not be considered the solution to the problem of the uninsured, but rather one option to help people get basic medical care. Some patient advocates disagree, saying many of the plans leave policyholders more vulnerable to devastating medical bills than they might think.
And in August, The Washington Post found that low-premium, high-deductible plans were most likely going extinct starting next year. "Plans with $10,000 deductibles won’t make the cut, experts say, nor will many other plans that require high cost-sharing or provide limited benefits — by excluding prescription drugs or doctor visits from coverage, for example," Michelle Andrews wrote in the Post.
That's not going to make Dianne feel any better.
Telling people like Dianne Barrette that their new more expensive, more comprehensive plan is better for them won't make the jump in price feel any better. Even with subsidies she has to pay for a higher quality product that she may not need, yet. And as Ross Douthat argued in The New York Times over the weekend, the new insurance plans may be better — both liberals and conservatives agree that the high risk plans left individuals financially vulnerable— but they're also taking money away from spending elsewhere. He wrote:
Yes, for some that money would ultimately get eaten up, and then some, by unexpected bills. But for others it might be money saved for retirement, money that pays for child care, money used to hire a contractor or buy a house. And for the public sector, it would be money for all the priorities — liberal as well as conservative — that are being undercut by rising health care costs.
So, in a few years Dianne might be grateful she had better insurance — if she's admitted to the hospital, if she ever needs to buy medicine that costs more than $15, if wants a plan that covers more that $50 per provider per day of service. Or, she might wish she could have put some of that money towards retirement.