Covered California Mulls Extending Cancelled Health Policies
November 19, 2013 1:20 p.m.
David White, health insurance broker
Linda Keller, executive vice president, Intercare
Related Story: Covered California Mulls Extending Cancelled Health Policies
MAUREEN CAVANAUGH: I am Maureen Cavanaugh, this is KPBS Midday Edition. On the one hand, California's health exchanges to edit that the national website. On the other hand, the president's new plan to allow insurers to extend substandard health policies through next year is adding extra level of confusion into the process. Covered California has yet to decide if it will allow consumers to hold onto these policies, and it's not clear that insurance companies would extend the coverage in any case. Meanwhile, despite uncertainties uncertainties for some, San Diegans are rolling in Obama carried a rate that exceeds the average. Linda Keller and David are here. Welcome back to the program. Linda, who is affected by these cancellations?
LINDA KELLER: The cancellations are targeted at individuals who are just their coverage directly from carriers. Those are the ones who've received the cancellations.
MAUREEN CAVANAUGH: People who purchase it between 2010 and now?
LINDA KELLER: Yes. Since the reform was passed to present his or the ones that are affected check
MAUREEN CAVANAUGH: These policies were canceled because they do not meet all of the guidelines of think affordable care act?
LINDA KELLER: That is correct. You must have essential health benefits in many plans offer today to not cover all of the essential health benefits. Things like maternity care or pediatric care or things like that they your plan may not cover today are required.
MAUREEN CAVANAUGH: These policies might be does extended, where people expected to just go on California connected in the state court and get new policies?
LINDA KELLER: Yes or they could renew the policy but they did not have to go through covered California. They can go to the carriers directly but they have to get a new policy with all of the required benefits.
MAUREEN CAVANAUGH: If they decided all of this had not happened and they find that they that their experience pain is not going to continue the good to Covered California to deal policy. Will they always find that insurance will be more expensive?
LINDA KELLER: Now the way that the new plans work is that those who are younger and healthier were more likely to go to find that plans were more expensive but older unhealthier pauper population may have have found that there is some reduction in price. Biggest difference is that there is not just the age of the individual but what their coverage they have versus what is need to cover.
MAUREEN CAVANAUGH: A lot of the people involved in providing insurance try to get their own websites is said that these policies should be reinstated. Why would someone want to keep something that was not as good as what they could get on covered California?
LINDA KELLER: That's a good question. Some of the stuff that the benefits cover are items that we may not need. Maternity care for example. I'm past that stage I don't need that. Your twenty-seven-year-old male and you don't need that. At the rates are the same for male and female so there sometimes when you're paying for coverage that includes things that I don't need, where I can purchase the coverage that had today is going to be less expensive and I don't need all of those additional benefits.
MAUREEN CAVANAUGH: What are some of the challenges to reinstate plans that they have already canceled?
DAVID WHITE: That is a great question. I don't know how to do it. I thought of an analogy, you are a manufacturer and what you do is manufacture cars. All of the cars they have paid and all the sudden you have to make a new car with a bunch of other things involved. What you do feel like work you Field line in the anyone. Discussed the old program and made anyone. How you take the old one back and restored? I don't know that they can. I non-technical enough to know, but when I talk to companies they say they can do it. They do not know how to do it. They all agreed that they opted in to be eligible for coverage covered California they signed contracts and said that we will not offer these plants. They will be discontinued and we will be offered plans on the exchange. Help convert California be cooperative to make it work. I don't know how this could work right now. I do now know how to work for your people as they exceed the biggest increases. My clients thirty-five and under a seeing increases from $100.50 percent. A lot of them are young and in great shape at a very high deductibles. They do not get sick pics so why should they play a lot of money for insurance? Now they have to have all of these benefits in the policies and it goes up to.
MAUREEN CAVANAUGH: And knowledge argument could be made your one traffic accident away from even the coverage. One life is that I need away from eating all that coverage. That is part of all this.
DAVID WHITE: Absolutely. I had cancer twice and when I went in for my last operation. 95% of all bankruptcies are from medical accidents is. It would behoove people to pay a little bit. Young people get a lot more absences than older people. Everybody gets in active accidents. They get hurt. They need coverage. It's very difficult for many of them because they can afford it.
MAUREEN CAVANAUGH: It seems a part of this problem has been the fact that this whole process is not been communicated effectively to the general public. I wonder where you see those gaps. Can all come from those the federal government? Other Said that the insurance companies could've told people? Where you see the gaps in?
LINDA KELLER: A big case of the gap was the government say that you could keep your plants. From day one people simply could keep all of the plants. Insurance companies could've done a better job of making sure that individuals would coverage figure that this is going to be terminating and giving a more advanced notice in explaining the process as opposed to sitting out 900,000 cancellation notices. I think because of the fact that most people assumed that under healthcare reform the cost of the plans were going to go down, initially the thought was that my plan gets canceled all just get another plant and it will be better and cost less. When it did happen, that is what raised a lot of the concerns from individuals.
MAUREEN CAVANAUGH: David, what you see that this could've been done better?
DAVID WHITE: One of the things we been talking about is that there is nothing that you've heard them ask about a broker or someone who knows about this. These are brand-new employees that have no experience with this business. I appreciate what they're trying to do, but when someone finds me I can sit there with a lot of experience with knowing Understanding their philosophy and now the questions that I asked surprised my clients because I've been in this business for a while. The people are not getting the information that they need. You cannot find this out on the exchange. If you want this plan, it's a bronze plan and as such and such a one, where the doctors can't tell you how to do this.
MAUREEN CAVANAUGH: One of the crucial acts aspects left out of this puzzle is consulting people within the media business for a while. We can go on but enough notice but not enough credit to people are left with this. They are not going to extend these policies that have been canceled. Covered California is still on the fence about that. One of the concerns is that the impact of extending these plans on the risk pool, can you explain to us but that conservatives?
LINDA KELLER: I chatted with several of the carriers to ask if the state says that we will allow you to stay, are you as carriers even going to allow this. All of them came back and said they doubted. It becomes a because of this judge a school. When they looked at the rates they assumed that all of the individuals and policy today would be moved into this pool. In addition we have people coming up to short. We do that this was going to be people that cannot get coverage before or heard issues. We take into consideration. Now we say okay, let's assume that younger and healthier folks where rates are going to be cheaper if they keep the policies. What happens to that risk all of those people who go on to new plants? It is only those who are currently covered that are unhealthier and older, and those who come into the pool new which are ones that could not get coverage before who are taking it because they have pre-existing conditions, so the risk in this pool is going to be very poor risk and the concern is that it was priced assuming that the good drivers pay for the bad drivers. This case you may have bad drivers going to the pool, and what ends up happening is next year's rates are going up significantly because we did not get the right risk pool.
MAUREEN CAVANAUGH: What if color California decides to go along with the state of Washington in Massachusetts until going to go along with these extended policies. People had to find different kinds of insurance. Does the risk is assumed by other states going to be allowing the continuation of continue policies, does that fall down on covered California? Is a state-by-state?
DAVID WHITE: This is state-by-state it would not be affected by other states. If the other states have only the federal exchange, that could happen. But we're father had been the federal government or Cleo for people involved in the federal government does. As of Friday we had 33,000. Federal governments as they has 160,000 but 32,000 is from us. Kentucky had the most enrolled. I do not know. I think that this mucks up the lottery for more. We said we would go one way, and now we're saying wait a second. They should at higher deductibles for those people so they can get it catastrophic plan., They do not have catastrophic plants anymore. He had to qualify for the peer why can't you just choose the plant? Young people are basically good they always thought they were bulletproof we need is people are there. They have to offer something to get the bond or the system will collapse. With the 33,000 we have heard all the California are very sick. Those are the ones that have taken the time to get on federal government. The federal plan is the same way. Who pays for this court to one window, what do you think it will take? What kind of someone you to take be a viable thing that people want to be a part of?
LINDA KELLER: I don't think that a lot of people will look at this year are jumping to get onto the exchange. You take a look at it and look at the cost of plans and what you're offering the plan versus the potential tells you that you would play which is so small, the only individuals who will jump on are the ones who will be to pick is going to take 3 to 5 years before we're getting enough of a penalty in the rates are at a point where they start to stabilize and you will actually see that is something that is viable.
MAUREEN CAVANAUGH: Three to five years?
DAVID WHITE: Maybe three I don't think before that. Things are going on. It penalty does not been effective except for to three years. If you make a lot of money you can choose different things. So it's really the people who don't make a lot of money who did the sport. That is the problem.
MAUREEN CAVANAUGH: Summit Washington are calling ObamaCare a failed policy already. I barely do think these issues are hurting the Affordable Care Act?
LINDA KELLER: When people first heard about it you saw individuals who thought it was wonderful. They thought it was going to be free and more concert brands of coverage. The fact is that it's not actually turning out to be that way. I think that you have a very disillusioned population with healthcare reform.
DAVID WHITE: What I'm hearing from the letter the younger clients they are tired of it. They're tired of the politics that have nothing to do with people. Everything that you listen to motion to has nothing to do with making this better. The reason we brought this system in is because the system was broken. This is the first step to make it better and as you see in California we've had some corporation that is better. Washington is all about politics.
MAUREEN CAVANAUGH: Is there anything that we could do here in California overall to try to get the message out and try to make them really put up brand name for what they're doing the try to put this out of the fire?
LINDA KELLER: They need to make sure, you hear about the charges with the exchange. Individuals to understand that. They're not necessarily going on covered California and actually trying to go through the application process, which I have done and it is a long process. We need to shorten this up. We need to really push to say that these issues are not what covered California. We've got 35,000 people are enrolled in our plant out of 106,000. California's doing something right. We need to get that message out there that we're encouraging individuals to at least try and see if they can get on and enrolled in the exchange.
MAUREEN CAVANAUGH: I would like to thank you both so much.