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The Real Story Behind the Phony Cancelled Health Ins Scandal

by Ziks511 / November 5, 2013 3:20 AM PST

Most plans were cancelled because they didn't meet Obamacare's minimum requirements.

"Over the past few weeks, insurers have been sending out hundreds of thousands of notices alerting customers that their current plans won't comply with the ACA as of January 1 and that the owners of these plans need to find alternatives."

And it's not like this is news. "In 2008, Sen. Charles Grassley (R-Iowa) launched an investigation into AARP's limited benefit health plans and held a hearing on junk insurance plans. He was inspired by a Wall Street Journal article about a Texas woman, Lisa Kelly, who was diagnosed with leukemia and required cancer treatment. She was referred to the M.D. Anderson Center in Houston. When she called to schedule her first chemo appointment, the hospital told her to bring with her a check for $45,000. Kelly had a limited-benefit policy sold by AARP that required her to pay all of the medical costs up front. Then it would reimburse her $7,500 per procedure, which didn't cover the treatment cost.

"Grassley's staff investigated the AARP's plan and discovered that the insurance company was using highly deceptive marketing practices. When he made the results public, Grassley decried the evils of the individual health insurance marketplace saying, "It's not better than nothing to encourage people to buy something described as 'health security' when there's no basic protection against high medical costs." "

There's that noted Left Winger, Charles Grassley trying to ensure that Insurance Companies aren't just running a scam on you, except that most of them were.

I highly recommend the article which covers all the issues very thoroughly

Geez, you'd think that AARP would have offered decent insurance.

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About those minimum requirements
by Steven Haninger / November 5, 2013 3:39 AM PST

Unless they were parked in the back of the president's head to be released later, there were no minimum standards when his promise was made.

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Not to mention
by TONI H / November 6, 2013 5:26 AM PST

the fact that it was discovered after Obamacare passed that AARP was promoting it heavily because it was going to be a 'recommended' insurance coverer for Obamacare. A deal was made ahead of time to get AARP to promote it to their senior citizens that weren't on Medicare since their policies are for those over 50. So senior citizens, because of their age and their risk factors will pay more for their insurance with premium increases for stupid crap they don't need like maternity benefits.

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There's no relationship
by James Denison / November 6, 2013 7:38 AM PST
In reply to: Not to mention

and I think Ziks knows it.

Nothing changed in what he referenced. I guess he's hoping enough smoke over something unrelated to all the REAL stories about how Obamacare has hurt the previously insured will disappear in the smoke he's blowing? This is an apples and oranges comparison in hopes everyone will just label it all fruit and follow the pied pipers of Obamacare which are currently in ads all over TV.

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Not the faintest clue. There is a sensible minimum coverage
by Ziks511 / November 6, 2013 10:01 AM PST

but I had no idea about AARP or that so many schemes didn't meet the minimums which were established.

Note that Grassley's inquiry was about what was a sensible safe level of coverage. I didn't make up that standard. Obama didn't make up that standard, neither did Grassley, it was probably a consortium of advisers and maybe insurance coverage wonks.

You always approach things as if I have an agenda. Sometimes I do, but remember that I've been away from the US for 33 years now, and my concerns have been more about what coverage was available here, which is total. I did realize that things were better here, and that the costs were manageable, and that eventually that I thought that this system was better than where I'd come from. That's it.

I may have remembered the various levels and costs had I been reminded, but when you don't worry about something, it slides into the background and no longer becomes an automatic piece of reference.

But if anyone is blowing smoke its the Insurance companies regarding what minimal cost coverage actually covers. Don't blame me if the coverage was crap, or if the Insurance Companies baled after stealing their clients money. It's capitalism.


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there has always been
by James Denison / November 6, 2013 12:08 PM PST

what's called "catastrophic insurance" which isn't health care, but basically insurance against your body parts and life. What's related above seems a conglomeration of that with some emergency healthcare provisions, but not real healthcare and I doubt would have been sold as if it was standard healthcare policy.

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by James Denison / November 6, 2013 7:40 AM PST

Obama, always big on the promise, short on the details, failure on the delivery. The most truthful thing he could have said about Obamacare would have been "Bend over, this may hurt a bit..."

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what has that to do
by James Denison / November 6, 2013 7:34 AM PST

....with the story actually referenced. What's the phony story? You give NOT a clue.

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The real story was that the ACA was a deliberate
by Ziks511 / November 6, 2013 10:13 AM PST
In reply to: what has that to do

trick to force Insurance Companies to drop their clients some of whom had maintained coverage for decades or that the surprising massive cancellations were expected. Perhaps the Health Care plan hadn't been well studied by Obama's people, but most likely they had taken an average of the costs of various plans in various countries, not realizing that a single payer system is vastly more efficient and less costly, or that the American Health Care Industry overcharges to the extent it does.

I've said it before, and been ignored, but you can research the % of GDP for each country with a centrally administered system and you'll find that the US is paying from more than twice the amount spent in other countries for the same treatment, to about 35% more than Canada pays per person to cover 100% of its people.

The figures are available, You can do your own research if you don't believe me, but don't pretend that I'm fudging the figures, because the coverage has been extensive in American publications. Selective vision isn't an uncommon problem when you are philosophically wedded to contrary idea.


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I agree partly
by James Denison / November 6, 2013 12:11 PM PST

You are definitely right about the ACA being intended to shove people off some health care policies and forcing them onto ACA approved plans. You even admitted that earlier. That's what the conservatives have been saying since the beginning. As for the insurance companies, I'm fairly certain they'd have preferred the status quo, so can't see any connect to them supporting ACA.

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Rob, ther REAL story is that it's not 10 or 12 million...
by Paul C / November 6, 2013 5:57 PM PST

...people who buy insurance in the individual market who are affected by the ACA changes, it actually as many as 93 million people, most of whom get employer based plans.

On Wednesday, Secretary of Health and Human Services Kathleen Sebelius testified before Congress about the continuing issues with the rollout of Obamacare's health insurance exchanges. "Hold me accountable for the debacle," said Sebelius. "I'm responsible." I attended the hearing, and I was struck by the scope, scale, and depth of the health law's problems, problems that far exceed any one political appointee. But Obamacare's disruption of the existing health insurance market—a disruption codified in law, and known to the administration—is only just beginning. And it's far broader than recent media coverage has implied.

If you read the Affordable Care Act when it was passed, you knew that it was dishonest for President Obama to claim that "if you like your plan, you can keep your plan," as he did—and continues to do—on countless occasions. And we now know that the administration knew this all along. It turns out that in an obscure report buried in a June 2010 edition of the Federal Register, administration officials predicted massive disruption of the private insurance market....

On Tuesday, White House spokesman Jay Carney attempted to minimize the disruption issue, arguing that it only affected people who buy insurance on their own. "That's the universe we're talking about, 5 percent of the population," said Carney. "In some of the coverage of this issue in the last several days, you would think that you were talking about 75 percent or 80 percent or 60 percent of the American population." (5 percent of the population happens to be 15 million people, no small number, but let's leave that aside.)...

But Carney's dismissal of the media's concerns was wrong, on several fronts. Contrary to the reporting of NBC, the administration's commentary in the Federal Register did not only refer to the individual market, but also the market for employer-sponsored health insurance.

Section 1251 of the Affordable Care Act contains what's called a "grandfather" provision that, in theory, allows people to keep their existing plans if they like them. But subsequent regulations from the Obama administration interpreted that provision so narrowly as to prevent most plans from gaining this protection.

"The Departments' mid-range estimate is that 66 percent of small employer plans and 45 percent of large employer plans will relinquish their grandfather status by the end of 2013," wrote the administration on page 34,552 of the Register. All in all, more than half of employer-sponsored plans will lose their "grandfather status" and become illegal. According to the Congressional Budget Office, 156 million Americans—more than half the population—was covered by employer-sponsored insurance in 2013.

Another 25 million people, according to the CBO, have "nongroup and other" forms of insurance; that is to say, they participate in the market for individually-purchased insurance. In this market, the administration projected that "40 to 67 percent" of individually-purchased plans would lose their Obamacare-sanctioned "grandfather status" and become illegal, solely due to the fact that there is a high turnover of participants and insurance arrangements in this market. (Plans purchased after March 23, 2010 do not benefit from the "grandfather" clause.) The real turnover rate would be higher, because plans can lose their grandfather status for a number of other reasons.

How many people are exposed to these problems? 60 percent of Americans have private-sector health insurance—precisely the number that Jay Carney dismissed. As to the number of people facing cancellations, 51 percent of the employer-based market plus 53.5 percent of the non-group market (the middle of the administration's range) amounts to 93 million Americans.

Maybe the good folks at Mother Jones just didn't see that CBO report; it's more likely that they decided to ignore it, as it just doesn't fit the radical statist template - as truth so seldom does. They certainly can't claim that this a recent development, as the rule was written in 2010. If you want to plow through the rule, it's at http://www.gpo.gov/fdsys/pkg/FR-2010-06-17/pdf/2010-14488.pdf.

The cancellations aren't "phony", Rob, nor is the fact that ACA-compliant plans with the same deductibles and co-pays cost much more (almost $2,000/year more in my case).

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ARA spelled "minimum" coverage
by Willy / November 6, 2013 9:46 PM PST

As I see it, ARA more readily pointed out what minimum coverage was or should be. All those offering insurance that in many cases was below that standard had to get out or come-up to that level. Getting up to the new level simply meant you had to pay more in premiums. In light of what been offered in basic coverage but some type of health insurance that was affordable yet never really covered what was needed once that actual need came into existence. if you had any prior pre-conditions of health, that practically put into a high premium bracket, it no longer was really affordable as you're pushed out as insurance had to pay if you pay that premium and of course all along the lines of what was covered and even then you maybe denied, the horror stories are too numerous. It's too bad AARP main offers of insurers they promoted don't really provide what was needed but more of what could be affordable yet lacking. I read in Consumer's Report magazine that some of the insurance providers that AARP offered were low in the rating compared to others. Further, with the new ARA standards, it may have been also a means for insurers to dump more than likely unprofitable clients deemed too risky even if they were paying premiums, it was just too convenient not to pass-up. Since when does an insurer go out of it's way to help the insured/clients, come on. At the same time those insurers do have to abide to the new law. -----Willy Happy

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