Virginia: Up to 240K policies may have to be replaced (but probably not), and even some Republicans are coming around...
Last week I noted that the "OMG!! GAZILLIONS OF POLICIES CANCELLED!!!" freakout over non-ACA compliant healthcare policies being sunsetted to be replaced by policies which are compliant with the law is about to raise its ugly head again this fall. Sure enough, we're off and running in Virginia:
After a year’s reprieve, up to 250,000 Virginians will receive notice by the end of November that their health insurance plans will be canceled because the plans do not comply with the Affordable Care Act and accompanying state law.
The affected policyholders were allowed to renew their old plans late last year, even though the plans did not provide all of the benefits required under the health care law, but they won’t have that option when the policies expire this year.
I went with 240K instead of 250K because later in the article it says:
Gray said 60 percent of policyholders in the individual market took advantage of the opportunity to re-enroll in their noncompliant plans last fall for another year. The market in Virginia covers an estimated 400,000 policyholders.
Of course, 60% of 400K is 240K, not 250K. That doesn't sound like a big difference, but that's 10,000 people after all. Granted, these are estimates, but I'm all about the numbers and it's important to be as accurate with those as possible given how wildly exaggerated they were last year.
Even so, 240,000 is still a lot of people...except, once again, they aren't losing access to being insured, they're just being required to replace their current policies with ones which are compliant with the law. As I noted last week:
between President Obama's "you can keep it" blunder and the endless litany of lies spewed by the GOP about the law ("death panels", etc.), it's not surprising that millions of people still don't have a clue about how the law works.
To his credit, someone in Virginia recognizes that this is making the issue out to be more significant than it is...
Doug Gray, executive director of the Virginia Association of Health Plans, said the notices will give policyholders the option to buy health plans with similar coverage that comply with federal and state insurance law.
“I don’t call that cancellation — I call that an adjustment to the new law,” Gray said Thursday.
...but of course, with the midterms approaching...
But the pending notices, revealed during a meeting of a new legislative commission, immediately rekindled partisan political debate over the effect of the health care law that President Barack Obama signed in 2010.
“This law is causing untold heartache and genuine hardships for thousands of Virginians,” Del. Kathy Byron, R-Campbell County, chairman of the Virginia Health Insurance Reform Commission, said Wednesday. “It is becoming increasingly clear that the best option would be to repeal this poorly crafted law and start over.”
However, there's one rather interesting snippet here as well:
Not so, said Sen. John Watkins, R-Powhatan, chairman of the Senate committee that oversees insurance laws.
“To go back to square one right now would be just insane,” said Watkins, saying that would result in the rollback of popular benefits for dependent children through age 26 and people with pre-existing health conditions.
Huh. Now that is interesting: A Republican state senator--one of the same Virginia state senators who's been fighting tooth and nail to prevent Medicaid from being expanded in the state--is now arguing that the ACA shouldn't be repealed.
As for the up to 240,000 policies which will have to be replaced with a new one, people should really quit having the vapors over it, since...
Under the law, insurance policies must include 10 essential health benefits, including mental health and maternity, and cannot deny coverage to people because of their health histories.
The good news is that anyone who goes insane over the thought of having to replace a noncompliant policy with a compliant one will be able to receive mental health treatment for it without going bankrupt in the process.
Oh, one more thing: The key phrase here is "up to" 240K. You see, the private individual health insurance market has a tremendous amount of churn anyway. According to an extensive study by Harvard professor Benjamin Sommers...
Relying on data from the Census Bureau's Survey of Income and Program Participation for his study, Sommers used a sample of 4,199 respondents under 65 years old with nongroup coverage in their first month in the survey.
Over one-third of those respondents no longer had nongroup insurance coverage after just four months, Sommers found. Just 42 percent had stable nongroup coverage after one year. After two years, just 27 percent had stable coverage.
Now, I don't know how representative this study is of Virginia in particular, and of course the 240,000 people who grandfathered their plans for 1 year may not be represented in that study either; it's possible that this group is more likely to stick with what they had as long as possible (after all, they already took the 1 year extension). However, Assuming that it is representative, that means that a good 58% of these people have already moved on to something else: Either a compliant plan, a job with benefits, aging into Medicare, moving out of state, marrying someone covered by a compliant plan and so on.
If that's true, then instead of 240,000, we may only be talking about 101,000 people. Still a large number, but a heck of a lot less than the 250,000 claimed in the article, although to their credit, they do note the churn factor (slightly):
Scott Golden, spokesman for Anthem Blue Cross and Blue Shield, the state’s largest health insurer, said he could not estimate how many of the company’s customers will receive the notices.
Plus, again, in some cases the switch from the old plan to the new one may not be that big of a deal:
Affected customers were allowed to renew their old policies last year up to Dec. 15. They will have until Nov. 30 to replace those policies with what Golden called “the closest plan to what they may have had that is ACA-compliant.”
Of course, the anti-ACA Republican quoted earlier tries to claim that the new plans will cost more...
However, Byron said the new plans will likely have higher premiums and deductibles.
...except that in most cases, those premiums will be considerably lower due to the tax credits which most people receive via the ACA exchanges.
In other words, as I noted last week:
It's not so much that this is false--some policies will be cancelled--as heavily exaggerated, along with the impact of those cancellations.
Remember that when you start seeing the campaign attack ads with absurdly ominous music playing over black-and-white footage of someone reaching into the mailbox and pulling out...a notice from their insurance company (DUN-dun-dunnnnn...).