It’s downhill from here.
The next wave of Obamacare cancellations is on the way. Tens of millions could be affected:
Hundreds of thousands of Americans will soon receive cancellation letters affecting their 2015 health care plans — and that number may quickly rise into the millions. This wave of cancellations will fall into two categories. The first group hit will be in the individual market, the same group that suffered through at least 6.3 million cancellation letters last year. They will almost certainly be joined by millions of people in the small-employer market, which has 40 million plans and will be under Obamacare’s control starting next year.
That’s right: President Obama’s now-infamous promise, “If you like your health care plan, you can keep it” — Politifact’s 2013 “Lie of the Year” — is still being broken, potentially worse than before.
Most of the individual market cancellations will be for plans that were supposed to be canceled last year, when Obamacare first went into effect. After the fallout from last year’s fiasco became too politically toxic, President Obama unilaterally changed the law so that some non-compliant policies could continue for at least another year. That 12-month period is now up.
Virginia will be hit the hardest — up to 250,000 Virginians will receive a cancellation notice by the end of November. Another 30,000 New Mexicans will have their plans discontinued in 2015. In Kentucky, another 14,000 individuals will receive notices in the coming weeks. Elsewhere, Colorado, Alaska, North Carolina, Tennessee, and Maine are expecting thousands of cancellations — after almost half a million notices went out last year. Other states, some of which either don’t count or don’t publicly release details on discontinued plans, will likely add to the tally.
But that’s still only the tip of the cancellation iceberg. A far greater threat looms for the 40 million Americans who receive health insurance through small business employers, also known as small-group plans.
Premiums are going up. Bronze Plans are expected to see a 14% increase next year:
An examination of next year’s rates in the biggest city in 15 states and Washington, D.C., reveals that the cost of the cheapest bronze plan will jump an average of 13.9% for 40-year-old non-smokers earning 225% of the poverty level ($26,260).
In Seattle, the cost of the cheapest bronze plan, after subsidies, will soar 64%, from $60 to $98 per month, for individuals at this income level. Some other cities seeing notable gains include Providence (up 38%, from $72 to $99 per month); Los Angeles (up 27%, from $88 to $111); Las Vegas (up 22%, from $100 to $122); and New York (up 18%, from $97 to $114).
The surge in the cost of the cheapest subsidized bronze policy could negatively impact enrollment in 2015. This year, 39% of bronze plan choosers picked the lowest-price option. One might expect that share to rise in 2015, when millions of people who passed on ObamaCare exchanges this year are expected to enroll.
Obamacare may yet bend the cost curve down, not because it saves any money but because of the massive deductibles. It appears Obamacare’s deductibles will become a de facto death panel:
Patricia Wanderlich got insurance through the Affordable Care Act this year, and with good reason: She suffered a brain hemorrhage in 2011, spending weeks in a hospital intensive care unit, and has a second, smaller aneurysm that needs monitoring.
But her new plan has a $6,000 annual deductible, meaning that Ms. Wanderlich, who works part time at a landscaping company outside Chicago, has to pay for most of her medical services up to that amount. She is skipping this year’s brain scan and hoping for the best.
“To spend thousands of dollars just making sure it hasn’t grown?” said Ms. Wanderlich, 61. “I don’t have that money.”
High deductible plans cost less in premiums but are accompanied by a dark side:
While high-deductible plans cover most of the costs of severe illnesses and lengthy hospital stays, protecting against catastrophic debt, those plans may compel people to forgo routine care that could prevent bigger, longer-term health issues, according to experts and research.
“They will cause some people to not get care they should get,” Katherine Hempstead, who directs research on health insurance coverage at the Robert Wood Johnson Foundation, said of high-deductible marketplace plans. “Unfortunately, the people who are attracted to the lower premiums tend to be the ones who are going to have the most trouble coming up with all the cost-sharing if in fact they want to use their health insurance.”
Deductibles for the most popular health plans sold through the new marketplaces are higher than those commonly found in employer-sponsored health plans, according to Margaret A. Nowak, the research director of Breakaway Policy Strategies, a health care consulting company. A survey by the Kaiser Family Foundation found that the average deductible for individual coverage in employer-sponsored plans was $1,217 this year.
It wasn’t very long ago the Times editorial board was chest puffing about Obamacare:
Republicans of course haven’t embraced the Affordable Care Act. Now that it’s actually gone into effect, though, they seem to be slowly coming around the reality that it’s not at all the disaster they assumed it would be, and therefore may not draw voters to the polls.
For the less fortunate, however, the Affordable Care Act has already made a big positive difference. The usual suspects will keep crying failure, but the truth is that health reform is — gasp! — working.
Krugman might yet be shown to once again be suffering from premature bloviation. Whatever is working is working because the largest portion of Obamacare has yet to be implemented yet and the clouds are gathering.