This post won't go into whether the Affordable Care Act (known in some quarters as "Obamacare") was good or bad public policy. This post is about misleading communications by insurance companies. Our firm knows about insurance company deception and we think the situation calls for some clarification:
Donna received the letter canceling her insurance plan on Sept. 16. Her insurance company, LifeWise of Washington, told her that they'd identified a new plan for her. If she did nothing, she'd be covered.
A 56-year-old Seattle resident with a 57-year-old husband and 15-year-old daughter, Donna had been looking forward to the savings that the Affordable Care Act had to offer.
But that's not what she found. Instead, she'd be paying an additional $300 a month for coverage. The letter made no mention of the health insurance marketplace that would soon open in Washington, where she could shop for competitive plans, and only an oblique reference to financial help that she might qualify for, if she made the effort to call and find out.
Otherwise, she'd be automatically rolled over to a new plan -- and, as the letter said, "If you're happy with this plan, do nothing."
If Donna had done nothing, she would have ended up spending about $1,000 more a month for insurance than she will now that she went to the marketplace, picked the best plan for her family and accessed tax credits at the heart of the health care reform law.
Under the old health insurance system, you had every reason to stay with your current health insurance company because if you tried to go anywhere else, the new company could exclude any "pre-existing conditions" you had. That isn't the law anymore. Now health insurance is just another product that some other company may be able to sell you for less money, and they have to do it without excluding pre-existing conditions. So if you get notification that your existing plan is going to be canceled or "automatically" replaced with some other plan that will be more expensive, you don't have to take it lying down. But your existing insurance company has no incentive to tell you that its competitors might beat its price. You are only going to find out by gritting your teeth and checking it out for yourself.