Friday, March 21, 2014

Yes, Mitt, it's good to be able to fire "people"

One more outtake from my article about the satisfied unsubsidized -- those who were already buying health insurance in the pre-ACA individual market, earn too much tot qualify for subsidies, but still benefit because they or a family member have a pre-existing condition.

One person featured was Karen, a self-employed artist whose preexisting condition did not lock her out of the market but did lock her into one plan for ten years. The condition stemmed from a rare, benign tumor that required complicated treatment. Initially, that condition did not shut Karen and her husband out from affordable coverage.  But the full tale of how she was locked in by one insurer, what it meant to be locked in, and how the ACA provided relief is worth some elaboration.

Working through a broker many years ago, Karen and her found a plan from Blue Shield for a few hundred dollars per month. "But the rates went up 20 to 30 percent every year," Karen recalls. "I kept renewing -- I was terrified to change anything -- I thought even changing to a different policy with the same company might result in rescission." By 2013, the couple was paying $1,200 a month.

Larry Levitt, a senior vice president at the Kaiser Family Foundation, shed some light on the probable cause of those rate hikes.  Before the ACA took full effect, "It was uncommon (and arguably illegal) for insurers to raise an individual’s premium because of their health status. What was more common was for insurers to close certain product lines to new sales. People in those products who were healthy could get other coverage, often with the same carrier. People who were sick were stuck there and faced big premium increases, which applied uniformly to everyone in the product. The big premium increases you used to see in the individual market were often in these closed blocks of business."

This year, a Kaiser Permanente plan Karen found on ConnectForHealthColorado, the state's ACA exchange, is saving her and her husband $657 per month in premiums, with policy terms roughly comparable to their past plan.

As a bonus, the application process was also a lot easier than in the past, when insurers required detailed medical histories (they bought off-exchange, knowing they were ineligible for subsidies). "You just have to give them your credit card, your ages and location, and boom -- you're done."

An added bonus of dealing directly with insurers was getting a foretaste of the way they interacted with customers.  That gave Kaiser an edge. "So far, just from speaking on the phone, I'm really happy with them. They were incredible throughout the choosing and shopping process. They take questions seriously and answer fully. The other company I checked with, I felt they were complaining about the ACA -- the attitude seemed to be, if it weren't for the law, we wouldn't have to answer these questions."

Over the years, Blue Cross was often difficult to deal with, Karen said. "My experience was that they would routinely deny coverage."  She appealed repeatedly, and usually won. "For example, last year I had an accident that required an ambulance ride. The ambulance was technically covered, but they denied it, and I had to go through appeal.  That regularly happens here, because  the ambulance company in our area, the one that comes when you call 911, is not in-network.  It appeared to be a standard practice."  She hopes that Kaiser's excellent customer service pre-purchase foretells better claims handling.

So, as Mitt Romney famously intoned to a clutch of prospective voters, it's good to be able to fire "people" -- i.e., service providers who don't provide satisfactory service. What Romney relentlessly obfuscated, however, is the fact that the ACA enables customers to do that. Perhaps conservatives are right that the essential health benefits are too tightly defined and that the individual market should allow more choice of benefit design.  But since all insurers have to take all paying comers, they are under more pressure to keep the customer satisfied.  No one in the QHP market is locked into one insurer for more than a year.

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