If your current health insurance plan is being canceled because of Obamacare, you aren't alone.
At least 2 million people, and perhaps as many as 7 million, will not be able to renew their current insurance policies.
Multiple media outlets are characterizing the news as a major political blunder, but industry experts are clarifying the situation and explaining the real reason behind the massive coverage cancellations.
Failure to Meet Minimum ACA Standards
The Affordable Care Act requires insurance plans to meet the law's 10 minimum standards, such as maternity care, emergency visits, and mental health treatment, reports The Christian Science Monitor. Plans that don't meet those requirements are being dropped.
Many of the affected plans are quite cheap, but come with high deductibles or offer coverage only for catastrophic events. If it's not exempted as a grandfathered-in plan, such a plan may not meet these new rules and may be cancelled.
As a result, health insurance companies are sending scores of cancellation letters to people who buy their own coverage under plans that aren't up to snuff under the minimum ACA standards.
Obamacare aims to promote preventative care and prevent medical bankruptcies. In order to advance those goals, the law says c'est la vie to skimpy low-cost coverage.
This is frustrating news for those who either don't want or don't think they need more comprehensive coverage -- particularly younger, healthier people who are now facing premium increases to offset the costs of older and sicker enrollees.
The decision is driven by a utilitarian rationale: The greatest benefit to the greatest number of people should prevail. In the ACA context, about half the people receiving cancellation letters will pay more and half will pay less. Many will receive federal subsidies, but others will indeed pay more in the long haul, reports the Monitor.
President Obama is now facing criticism for his assurances that "if you like your doctor or health plan, you can keep it," because that mantra turned out to oversimplify the process.
As Jonathan Chait observed in New York Magazine, "In the current moment, with cancellation notices going out and alternatives not yet available, [...] a promise that felt like a mere oversimplification at the time, and may eventually feel like one in retrospect, currently feels like a lie."
- Here's Why So Many Americans Are Getting Letters Saying Their Health Insurance Is Canceled (Business Insider)
- What Is a Health Insurance Exchange? (FindLaw's Law and Daily Life)
- Does Obamacare's Medicaid Expansion Affect You? (FindLaw's Law and Daily Life)
- Heath Care: What is the Individual Mandate? (FindLaw's Law and Daily Life)