How You CAN’T Keep Your Current Coverage

In case you hadn’t seen it, the Galen Institute yesterday released a new paper discussing the havoc Obamacare is wreaking on insurance markets, and specifically the insurance many Americans had – and liked – before the massive 2700 page law was passed.  The paper includes the most comprehensive collection I have seen of anecdotes regarding insurance carriers who have dropped out of some markets, or gotten out of the health insurance industry completely, since Obamacare passed.  Below are the relevant excerpts from the Galen paper that tell the tale of Obamacare’s woes (I’ve edited the below lightly for length and by replacing citations with hyperlinks).  The complete list of companies that have dropped out of the insurance market shows the breathtaking scope of the impact this massive reorganization of health care is having on Americans’ lives.

Three years ago, candidate Obama promised that “you will not have to change plans.  For those who have insurance now, nothing will change under the Obama plan – except that you will pay less.”  And President Obama followed with the same pledge: “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.  No one will take it away.  No matter what.”  The Galen report once again illustrates how hollow those pledges have proved.

 

The American Enterprise Group announced in October 2011 that it would stop offering non-group health insurance in more than 20 states.  As a result, 35,000 people will lose the health coverage they have now.  The company cited regulatory burdens, including the “medical loss ratio” (MLR) requirements (see page 4 for more), in explaining its decision to leave the markets.  This means there will be less competition in these 20 states, resulting in higher prices for consumers in many cases.

In New York, Empire BlueCross BlueShield said it will drop in the spring of 2012 health insurance plans covering about 20,000 businesses in the state. Mark Wagar, president and CEO of Empire, said that the company will eliminate seven of the 13 group plans it currently offers to businesses which have two to 50 employees.  The move is expected to have a great and potentially “catastrophic” impact on small businesses in New York, according to James L. Newhouse, president of Newhouse Financial and Insurance Brokers in Rye Brook, NY.  This loss of competition inevitably will lead to higher prices and fewer choices for businesses and their employees.

In Colorado, World Insurance Company/American Republic Insurance Company announced in October 2011 that it is leaving the individual market, citing the company’s inability to comply with insurance regulations.

In Indiana, nearly 10 percent of the state’s health insurance carriers have withdrawn from the market because they are unable to comply with the federal medical loss ratio requirement.  Indiana was hoping to bring the companies back by asking the Department of Health and Human Services (HHS) for a waiver from the rule, but Washington refused in late November 2011 to grant the waiver….

These are the latest in a series of announcements that health insurers are leaving the market as a result of ObamaCare’s edicts.  But there are many more.

The exodus continues

Citizens in states around the country have learned that carriers are leaving markets, largely as a consequence of the combined effect of the health law and state regulations that make it particularly difficult to offer coverage in the small group market.

Principal Financial Group, based in Iowa, announced in 2010 that it would stop selling health insurance, impacting 840,000 people who receive their insurance through employers served by the company.  The company assessed its ability to compete in the new environment created by PPACA and concluded its best course was to stop selling health insurance policies.

Another 42,000 employees of small and midsize employers learned in January 2011 they were losing their health coverage with Guardian Life Insurance Co. of America. The company announced it was leaving the group medical insurance market (it had reached an agreement with UnitedHealthcare to renew coverage for Guardian clients).  Guardian began withdrawing from the medical insurance market in specific states more than a decade ago, and says it would be leaving the market with or without PPACA.

Cigna announced that it is no longer offering health insurance coverage to small businesses in 16 states and the District of Columbia: California, Connecticut, Florida, Georgia, Hawaii, Illinois, Kansas, Missouri, New Hampshire, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, and Washington, D.C.

In Colorado, Aetna will stop selling new health insurance to small groups in the state and is moving existing clients off its plans this year, affecting 1,200 companies and 5,200 employees and their dependents.   Aetna also has pulled out of Colorado’s individual market because of concerns about its ability to compete there, dropping 22,000 members.  Aetna also has dropped out of the small-group market in Michigan and several other states.

Since June of 2010, 13 plans have left the health insurance market in Iowa, citing regulatory concerns.

In New Mexico, four insurersNational Health Insurance, Aetna, John Alden, and Principal — are no longer offering insurance to individuals or to small businesses — drying up the market and driving out competition.

In Utah, Humana is ending its participation in the Utah Health Exchange, leaving only three carriers participating in the exchange.

In Virginia, UniCare has eliminated its individual market coverage for about 3,000 policyholders.  And shortly after the health law was enacted in

2010, a new Virginia-based company, nHealth, announced it was closing its doors, saying that the regulatory burdens posed by the health law made it impossible to gain investor support to continue operating.