On Monday, Kaiser Health News reported that health insurers are sending thousands of cancellation notices to consumers who buy coverage through the individual market because of requirements imposed by Obamacare. While Affordable Care Act critics are certain to use the news as proof that the health law is unworkable, the reality is that the Americans who own these skimpy health policies will get far more robust plans through Obamacare’s marketplaces — and most will qualify for government assistance to pay for that insurance.
Many policies currently sold through the individual market do little to help people who actually get sick. These plans come with appealingly low monthly premiums to draw in consumers. But those supposedly “affordable” rates typically mask high deductibles, big gaps in coverage, and large co-pays for essential care like prescription drug services that consumers tend not to realize until they actually need to use their coverage. And if you have a pre-existing medical condition or get sick, your rates go up — if you’re even able to buy a plan in the first place.
Insurance companies have been able to get away with this because they were largely unregulated before the health reform law’s passage. Now, Obamacare is changing that.
Under the health reform law, insurers can’t discriminate against people with pre-existing conditions, or set lifetime or annual caps on people’s health services. And insurance plans must offer a broad range of ten “essential health benefits” including maternity care, prescription drug coverage, and mental health services. That explains why major individual policy sellers such as Florida Blue and Kaiser Permanente in California are discontinuing large swaths of their current health plans — they simply don’t offer a minimally acceptable level of health coverage.
