3 Reasons Why You May Not Find Your Insurance Company In The Obamacare Marketplace (Exchange)


CrystalI have heard so much about the plight of the uninsured since 2008, that I am tired of hearing about them.  No, I am not heartless.  I am just sick of rich politicians using the misfortunes of others as political Ping-Pong balls.  I am convinced that at some point in 2009 politicians stopped caring about uninsured Americans and made politics their priority.

In this post I want to address a concern that I find is weighing on the minds of people who have elected to pay for individual health insurance through-out this entire “Health Care Reform” debate.

Mr. Obama, Mr. Reid and Ms. Pelosi bet their political reputations on the success of Obamacare.  It does not surprise me that Mr. Obama and Mr. Reid want to see the success of Obamacare.  They have seen the ousting of Ms. Pelosi from power.

The funny thing is that with all the hub-bub about the concerns for the uninsured, I am not aware of any instance when any of the wealthy politicians, who were “fighting” for the uninsured, offered to pay the premiums for health insurance for even one person or family, out of their own money.

However, I have seen pictures of the $5,000,000 mansion, outside of Chicago,  that Barack and Michele will move into when they leave the White House.

Never-the-less, regardless of the political motives behind Obamacare, the health insurance marketplaces, formerly known as exchanges, are coming.

While most exchanges will offer coverage from Blue Cross Blue Shield, the larger “for-profit” insurance companies will be harder to find.

United Health Care is expected to be in only a dozen of the exchanges.  Aetna has applied to participate in just 14 states and CIGNA has committed to offer insurance on just 5 state exchanges.

If private insurance companies follow the lead of CIGNA, do not be surprised if your insurance company offers policies outside of the exchange in your state.

While you may have just as many options for individual health insurance as you have now, there is no guarantee that you will be able to buy coverage from all insurance companies through the new health insurance exchanges for a couple of reasons.

HISTORY

The Spanish/American philosopher, George Santayana, wrote in 1905, “Those who cannot remember the past are condemned to repeat it.”

I am not certain that George Santayana was foremost in the minds of the CEOs of the larger private insurance companies when they decided not to commit to the new health insurance exchanges in every state.   However, I do know that they have reviewed the short history of Obamacare and it has scared them.

Since the “Affordable Care Act” ceded much of congress’ rights and responsibilities to make law to the Secretary of Health and Human Services, about a quarter of deadlines have been missed or postponed and rules changed.  Private insurance companies need to be concerned that the rules are not going to be changed on them again because of the whims or incompetence of the White House and Secretary of Health and Human Services.

For example, in March, 2010, the ACA authorized $5,000,000,000 for the Department of Health and Human Services to set up High Risk Pools to serve the health insurance needs of Americans with pre-existing conditions who had gone for at least 6 months with no health insurance.

The politicians insisted that the high risk pools charge premiums equivalent to what healthy people paid in each state.

The program was supposed to only be a bridge to help people until the Health Insurance Exchanges started to operate in 2014.

The program turned out to be less than desired for 2 reasons…

  1. Fewer Americans than anticipated enrolled in the program.
  2. In less than 3 years both the $5 Billion that congress authorized in 2010 along with the premiums that people paid were gone.  In March, 2013, Mr. Obama closed the program to new enrollees.  In June, 2013 Mr. Obama’s Department of HHS reduced the amount that would be paid for claims from what the hospital charged to what Medicare would pay.

In May, the CEO of United Health Group, Steven Hemsley, told a gathering of investors that United Health Care was going to take a “wait and see” position regarding the new health insurance exchanges.

UNINSURED

Not only are private insurance companies concerned about the pattern of delays and incompetence by the department of government that is responsible for running the Federally Facilitated Exchanges, they are concerned about those who will participate.

Just a reminder, the health insurance exchanges are not designed to help everyone.  They are designed primarily for low-income Americans.  The “Marketplaces” are not the only option for people who want to buy health insurance.  However, the marketplaces are the only option for those Americans who want to claim a “subsidy” to help pay their premiums.

The larger private insurance companies are afraid that those people who will register for health insurance through the new health insurance exchanges will have ignored their health problems for a long time and will spend more than expected in health care with their new-found health insurance.

If they are correct, I anticipate them to offer plans on the exchanges in future years, after the initial wave of high health care claims.

COMPUTER PROBLEMS

When the Affordable Care Act was being debated, Obama, Reid and Pelosi, figured that once the bill became law, they would be able to secure the cooperation of the states in establishing health insurance exchanges.

That did not happen.

When the bill passed, it was anticipated that only 5-6 states would refuse to build exchanges.  HHS would only be responsible to build 5-6 computer networks.

What happened is that 34 states have told HHS that they want them to build the computer network to allow citizens to buy health insurance and coordinate their premiums with government programs.

When it became apparent that the majority of states were going to rely on HHS to build the computer networks in December of 2012, HHS extended the deadlines for states to “buy-in” to the program and build their own exchanges for a few weeks.

Few, if any, states changed their minds during the extension.  The only thing the delay did was compress an already tighter window of time even further.  HHS still must build 34 different computer “exchanges” by October 1, 2013.

Even if the computer systems from HHS are ready to go on October 1, 2013 there are certain to be problems.

One IT professional I read said this about the new computerized health insurance exchanges.  “… they should have been running tests to work out the bugs in August 2012 rather than August 2013.”

Insurance companies are afraid that those companies that participate in the new health insurance exchanges will be blamed by the public for the computer problems and glitches that are inevitable with the new health insurance exchanges.

Many companies have taken steps to give HHS an extra year to work out the bugs and glitches before their customers enroll through the exchanges.

REVIEW

To summarize, even though there will be a new health insurance exchange in each state to help individuals buy health insurance, you may not be able to find your favorite insurance company on the exchange.

It is not so much that they have pooh-poohed the idea of a health insurance exchange.  In many cases it is because they, like I, want to avoid as many customer problems as possible.

When I look at the history of Obamacare combined with the technical challenges that HHS faces in building 34 health insurance exchanges, I must admit that I am not overwhelmed with confidence.

If I were CEO of a large, national health insurance company, I would want to avoid as many customer and investor complaints as possible.  I find it rather ironic that many of the same politicians who vilified the executives of private health insurance companies in 2009 want their cooperation in 2013.

If the absence of the large health insurance companies from the new health insurance exchanges concerns you, don’t panic.  Just because you cannot buy health insurance from them on the exchanges, does not mean that you cannot buy health insurance from them someplace else.

If you already have a Qualifying Health Plan with a private insurance company, you can keep that until it renews in 2014.  Only then are you required to purchase one of Obamacare’s Essential Benefit Plans.

Many private insurance companies have made arrangements with the states to adjust the renewal date to the last day of the year.  If that is the case with your insurance company, you are not required to enroll in Obama’s Essential Benefit Plan until October, 2014.

That delay will give HHS an extra year to identify computer problems and fix them.

If you do not already have insurance through one of the larger health insurance companies but want it, many of the companies will continue to sell plans outside of the new exchanges.

If that is what you elect to do, the only difference is that you will not be able to get government help to pay for your premium.

The book below will give you an idea of things that you can do in 2013 to plan for Obamacare in 2014 if things are turning out differently from what you expected.

Alternatives 2

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