It’s been a consistent talking point for supporters of the federal health reform law: If you like your health plan, you’ll be able to keep it when the major provisions of the law take effect.
But for many people in Connecticut who buy their own insurance, that’s not the case.
Instead, many customers in the state’s individual market will have to find new plans because insurance carriers are discontinuing current policies and creating new ones that fit the requirements of the health law.
“The majority of our membership has to change their plan,” ConnectiCare President Michael Wise said. “Most of the plans [currently offered] won’t be there anymore.”
Aetna is discontinuing nearly all of its plans and replacing them with redesigned options for both its individual-market and small-group customers. Anthem Blue Cross and Blue Shield, the state’s largest insurer, is retiring some individual-market plans at the end of the year and introducing new ones. CIGNA stopped selling plans that don’t meet the health law’s standards earlier in the year, and people currently covered by them will need to get new plans when their policies end. (A spokesman for UnitedHealthcare did not provide information on the carrier's plans.)
How big of a change that is for each customer depends on his or her existing plan.
For people whose plans are close to meeting the health law’s requirements, the new options are likely to be relatively similar in design.
But for others, like those with high deductibles or plans that cover a relatively low percentage of medical costs, the new options could be significantly different. They’ll cover a more comprehensive set of benefits and a bigger share of medical costs, but they could cost more, too.
For people getting notices that their health plans are being discontinued, it can be a challenge to figure out what the changes will mean, said Dean Aita, president of Aita Financial Group in Washington Depot.
“They’re being told they will be migrated to a similar plan that is [Affordable Care Act] compliant, but we don’t have those details yet, and so people are saying, ‘Huh? Where does that leave us?’” he said.
There is an exception: People who had plans before the health law took effect in 2010 can keep those plans, as long as the carriers still offer them. Such plans are called “grandfathered,” a status that allows them to continue despite not complying with the requirements of the law commonly known as Obamacare. Plans lose grandfathered status if the benefits or costs to members change significantly. And grandfathered plans are not for sale to new members.
Some insurance brokers are advising their clients to consider another option to temporarily avoid bigger changes: Getting or renewing a plan that takes effect before the end of this year. That would give them another 12 months with a policy they’re more accustomed to.
What are the changes?
The health law requires that, starting in 2014, non-grandfathered plans sold in the individual and small-group markets cover “essential health benefits.” That includes benefits that few, if any, individual-market plans currently cover, such as maternity coverage and pediatric dental and vision care.
The amount of money customers spend out-of-pocket -- on deductibles, copays and coinsurance -- can’t exceed $6,350 for individual coverage and $12,700 for a family plan. (Premiums don’t count toward that limit.) So plans with higher deductibles, which tend to come with lower premiums, won’t be available.
And, starting in 2014, health plans must be designed to cover, on average, at least 60 percent of members’ medical costs. For many customers in Connecticut, that could be a significant change. A 2011 study by the consulting firm Mercer found that the coverage in nearly three-quarters of individual-market plans bought in the state fell below that level, as did half the plans purchased by employers with fewer than 50 workers.
Even insurance plans that would seem to meet most of those requirements need to be replaced, brokers and insurers said, because the law requires that insurance policies meet certain targets in the percentage of medical care they cover -- either 60, 70, 80, or 90 percent, with only a small variation from those levels. So a plan designed to cover, say 76 percent of members’ costs wouldn’t meet the new standards, said Marta Maciuba, small group head of sales for Aetna. Instead, it would need to be redesigned to cover either 70 or 80 percent.
Jesse D. McDonald, a broker with Modern Insurance in Milford, said he’s been preparing his clients for the need to change plans since the law was passed. “We all kind of knew this was coming,” he said.
The good news, McDonald said, is that because the health law prohibits insurers from denying anyone coverage based on their medical history, “They can transition into any plan they want very seamlessly, either with the carrier that they’re already with, or they can shop on the open market and just move into any other health insurance plan they might like better.”
McDonald doesn't consider the claim that people who like their plans can keep them to be inaccurate, because it originated before the Affordable Care Act passed, and people who've held onto their plans since then -- those with grandfathered policies -- are being allowed to keep them.
Rick Willard, a broker with The Health Consultants Group in Plainville, said he’s advising his clients to get new or renewed policies now, so they can get “well into 2014 without having to lose the kind of coverage that they’re used to.” Tongue-in-cheek, he calls it “ACA insurance.”
But Willard noted that that approach only works for people who could be approved for coverage based on their health, since insurers can still choose whether to cover people until the end of the year.
How different will new policies be?
Wise, Connecticare’s president, said the company will try to point people to a plan that would be comparable to what they have now.
“In some cases, it’s going to be closer. In other cases, it’s going to be further away,” he said. “If they were in a $10,000 deductible plan, there’s really nothing that’s comparable.”
Fewer than 10 percent of ConnectiCare customers currently have plans that are designed to cover less than 60 percent of medical costs, the minimum required by the health law, Wise said.
“But, of course, if you’re in one of those plans, then it’s not there anymore, and the alternatives that are going to be in the market are going to be substantially higher in cost,” he said.
Aetna has only one plan that doesn’t meet the 60 percent mark, and it covers less than 3 percent of the company’s Connecticut membership, Maciuba said.
Maciuba said her top-selling plan has a $2,500 deductible with a health-savings account. “I will still have a $2,500 high-deductible health plan. It just looks a little bit different,” she said.
Anthem plans to send members whose plans are being discontinued information on replacement options, spokesman Chris Dugan said. He added that it’s important for members to understand that their coverage remains in effect through the end of the year and plan changes won’t take effect until January.
Effects on prices
It’s hard to determine whether people will pay more or less for the new plans, brokers and insurers say, because in addition to changes in plan design, the way prices are set is also changing.
“There’s significant benefits that are being added to the plans,” CIGNA spokesman Joe Mondy said. “And for some people, they will cost more, and for some people they will cost less.”
Starting Jan. 1, Obamacare will limit how much variation there can be in premiums based on a person’s age. After that point, a 64-year-old will pay at most three times what his 21-year-old neighbor would for the same coverage. Currently, older members might be charged as much as six times more.
In addition, women and men must be charged the same premiums as of Jan.1. Currently, younger women and older men tend to pay more than their opposite-sex counterparts.
And while the state's individual market now is limited to people the insurance companies have deemed healthy enough to cover, as of Jan. 1, anyone will be allowed to buy coverage, and the insurance carriers won’t be allowed to charge more based on a person’s medical history.
In some cases, people who are older or less healthy could see lower costs than in 2013, Mondy, of Cigna, said. “But for younger, healthier folks, they’re going to be getting more benefits, and there’s a cost attached to that,” he said.
For some people, higher costs could be offset by another piece of Obamacare: subsidies that will be available to discount premiums. They’ll be available to people who earn up to four times the poverty level, as long as they buy coverage through Access Health CT, the state’s health insurance exchange.
But the extent to which all those factors affect price of new plans will depend on each person’s age, county, and income.
“Everybody’s situation is going to be different,” McDonald said.
Mercer report (back to story)