Why Losing Your Junk Insurance is a Good Thing

For the past week or so, the media has been replete with stories about people getting letters from their insurance companies that cancel their current coverage and replace it with a more expensive health insurance plan, providing the insured the option to look into their state's exchange for coverage. Insurance companies are doing their damnest to blame the Affordable Care Act and President Obama for this, but the truth is that the policies that are being canceled are being canceled for one reason and one reason alone: they do not meet the minimum coverage requirements under the Affordable Care Act.

So what are these minimum coverage requirements? They are simple and essential:
  • Ambulatory patient services (outpatient care you get without being admitted to a hospital)
  • Emergency services
  • Hospitalization (such as surgery)
  • Maternity and newborn care (care before and after your baby is born)
  • Mental health and substance use disorder services, including behavioral health treatment (this includes counseling and psychotherapy)
  • Prescription drugs
  • Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services
A letter from an insurance company telling a subscriber that due to changes affected by the health care law, a policy will no longer be available simply means that the plan does not provide coverage for one or more of the above. If someone has any objection to the idea that these services are essential and should be included in any health insurance plan, please explain to me why you would like to do without emergency services, hospital care, or prescription drugs in your plan. Then explain why, when you need a lifesaving surgery and your insurance refuses to cover it, the rest of us should foot the bill.

But that's not the problem. The problem isn't that individuals who already buy coverage in the individual market don't want their health insurance to cover these minimum standards. The problem - likely created intentionally by the insurance companies angry at the president for making them play by the rules of the road - is that people who are getting these letters by and large are unaware that their existing insurance policy could leave them high and dry should they ever need to use that insurance in any serious way. Some 80% of plans offered by some insurers in the individual markets have ripped off consumers in this way.

Insurance companies of course aren't telling their subscribers about why the law no longer allows the junk insurance they were selling you - if they did, they'd have to admit to not providing things like emergency services, hospitalization, lab tests, or rehabilitation from injuries. After all, you may not take out all your anger at the black man in the White House if your insurance company came right out and told you that your insurance plan will no longer be available because as it stands now, if you get hit by a bus and lose a leg, they don't have to pay for either your prosthetic or the therapy you need to learn to walk with that prosthetic. See, makes insurance companies sound like heartless bastards who are now being stopped by the law from abandoning their members at the moment they'd need them the most.

But but but.. what about the president's promise that you could keep your coverage if you liked it, huh? Choice without information is not a choice at all. Chances are, those who "like" the plans being canceled are either devastatingly unaware of the policy costing them good money every month, or simply willful liars who see this as a way to go after the president. For those in the former camp, a virtual trip to their state's exchange will prove to be a pleasant surprise (Healthcare.gov can direct to the right place). For those in the latter camp, I paraphrase the governor of Kentucky: you don't have to like me, or "Obamacare" or even the president. See what you can do for you and your family.

As individuals are transitioned from their current plans to plans in exchanges that offer a much broader range of coverage along with a subsidy for most everyone who is currently in a plan that doesn't cover one or more of the essential services, it will become obvious that losing junk insurance in favor of gaining good coverage at a subsidized price is beneficial. It is also a primary goal of the Affordable Care Act - for everyone to have access to coverage that is not just affordable but also comprehensive.