Obamacare & the Affordable Care Act
There have been a few letters printed recently complaining about the Affordable Care Act otherwise known as “Obamacare”. Where others see socialist or evil conspiracies I simply see bureaucratic ineptitude. Where some are not willing to admit any problems, I see many. My insurance agency, HIQS Group located in Bethel, has placed around 400 people in the exchange. The fact is many of my clients have saved a huge amount of money. I have one client who was paying $2,100 monthly and is now paying about $100.
Fact. During open enrollment Access Health CT and the 3 participating carriers did not make it clear that the network for exchange plans was smaller. One carrier, Connecticare, sent out a memo to agents near the end of open enrollment saying that the search tool for looking up providers was not accurate and that clients should call providers directly to check. This information was NOT posted on the exchange for those who did not use a broker. I have quite a few clients who signed up for Connecticare who cannot use their doctors.
This is my perception of what is currently happening at Access Health. Access Health has about 40 employees, and they are in charge of sales, marketing and technology. They outsource most of their work to 2 other organizations namely Maximus & Zerox. Maximus is responsible for most customer support and help desk activity. Xerox is responsible for verification of documents, proving such things as income, citizenship, and special enrollment events like marriage, divorce, loss of jobs, etc.. Even though Access Health hires them, they don’t control everything that they do. When the agents in our agency call customer service on behalf of our clients for updates or help, we are told often that we are not authorized to talk to them because they cannot verify that we are the agent! When the system was designed it was simply never included on the screens that these customer service reps can view. Eventually we can talk to them, but how long this takes and how much hassle it takes, sometimes transferring to a supervisor, varies with each call. We are falling way behind in solving of clients issues because of this and Access Health, I am sure, pays for this help by the hour. The longer it takes the more costly it is. Access Health does not have control of this process even though they are paying for it. Maximus defends their actions by saying that their legal team blocks them from disclosing customer information until they can prove who we are. There is currently no simple system in place to accomplish this.
The other actor on this stage is the company who verifies income. I will refer to them as Xerox. When agents were trained we were told that during open enrollment we could sign clients up, they would estimate their 2014 income and if they qualified for a subsidy they would sign up for an exchange plan. As agents we were asked to provide the most recent income tax return for the client as sufficient income documentation. However in the spring of 2014 Xerox has looked at updated “clarification” rules from the federal government and has said that tax returns are not enough. They are now requiring 1 month of payroll stubs or, if someone is self-employed, a profit and loss statement for the first quarter signed by an accountant. About half of my clients (200 or so) now have their subsidies in jeopardy because of this change, and many have been given a window of 90 days to comply. It is not always clear exactly what documentation is acceptable, and if they submit an inadequate document, the 90 day window could close and then it is too late. This is happening to so many clients that the turnaround time to process all of this paperwork only to find out if they qualify for their subsidy is putting many of them at risk of losing both their subsidy. Our agency is overwhelmed in trying to keep up and so is Access Health. If half of our clients have this happening I would estimate that statewide there must be about 20,000 people affected. The fact is many of my clients don’t use an accountant during the year, or sometimes ever. Many are simple, honest people who work and do their taxes in the spring using their own business records, and they need the subsidy to be able to afford insurance, since the average policy premium has now doubled since the passage of the Affordable Care Act. This system of income verification also does not account for those who have seasonal work where most of their income is made between April and September. Those who fail income verification in the spring lose their subsidy because Access Health forces them to be on husky or pay full price for insurance until they can “prove” they are now making enough income to get a subsidy. (If you earn at or below the Federal Poverty level, then you must enroll in the State Medicaid plan or purchase a full priced health plan). This can interrupt continuity of health care for clients because their doctor network can suddenly change. This verification is a time consuming process and what constitutes “proof” has not been clearly defined. Even though Access Health pays Xerox they can’t control how they do it, as Xerox “interprets” the government regulation on their own terms. The more work they do the more they can bill Access Health. Ultimately either the State or the consumer pays for this.
Looking ahead to 2015 I would like to talk about the next open enrollment. First of all many people I talk to are unaware that they cannot purchase a health insurance plan that will take effect before 1/1/2015. Open enrollment for 2014 ended on March 31st, and the only way to purchase a health plan outside of open enrollment is through having a qualifying event. This is referred to as a Special Enrollment Periods (SEP), for people whose situations change through a life event such as marriage, divorce, birth, moving from one state to another or losing insurance from a job. Many people are also unaware that they do not have to purchase health insurance through an exchange. There are actually more companies to choose from off of the exchange, and the only reason to purchase on the exchange, since their networks are smaller, is if you qualify for a subsidy. The third thing that people are unaware of is that all of the individual Affordable Care Act (ACA) compatible policies end on Dec 31, 2014. There is an open enrollment period starting Nov 15, during which you can choose a new plan for Jan 1. Our agency is particularly concerned that the carriers will wait to release pricing until that date, thus blocking brokers and policyholders from doing their homework ahead of time to see which policy is the best value for next year. All policyholders can switch to any plan from any company for January 1, 2015. If you do nothing you keep the same plan at whatever the new price is set at. If a policyholder finds out after Jan 1 that they want to be enrolled in another plan they can change plans through the end of open enrollment on February 15, 2015.
This bring us to the final topic. Non-grandfathered plans. When the ACA was passed all individual health policies purchased before that date (3/23/2010) were considered grandfathered plans. These are the ones which president Obama so famously told us we could keep. As we now know this was only partially true. The State of Connecticut, with the Federal Governments blessing, let each carrier decide whether to allow policyholders currently enrolled in grandfathered plans to keep them. Anthem, Celtic and Cigna cancelled all their grandfathered plans, while United Health One/ Golden Rule, Connecticare and Aetna allowed policyholders to keep them. I would like to note that the largest carrier, Anthem, with almost 30,000 grandfathered policyholders, was solely blamed by the public for cancelling these plans. One of the main reasons they did this is that for a few years prior to 2014, the state insurance department scaled back or did not allow requested price increases for these grandfathered plans, often due to public outcry that they were becoming unaffordable. Perhaps Anthem did not trust the insurance regulators to allow them to charge a fair rate and took advantage of the new rules to walk away from these policyholders.
Many policyholders, when faced with a huge increase in premium starting 1/1/2014, purchased non-grandfathered plans before the end of 2013. These were less expensive plans because they could be only purchased by healthy policyholders. All of these plans, plus all other non-grandfathered plans, are ending this year; most of them on Dec 31. The Federal government announced that they would allow non-grandfathered policyholders to keep these policies for another 2 years; however, they also said that they were leaving it up to the States and the insurance carriers to decide if they would allow this. In Ct, officials, lobbied or “advised” by the carriers decided NOT to allow this. I have seen no articles or public mention of this decision, but if means that all of these policyholders will be faced with either paying more for their insurance, paying the same for a worse policy, or getting a subsidized plan (if they qualify) . Our agency has almost 700 policyholders who fit into this category. We will be hard pressed, as all advisors and brokers will be, to truly spend the time our policyholders deserve in reviewing and recommending new policies. One more note about this process. Each carrier has different rules about when polices will end. Last year for January 1st, the two largest insurers, Aetna and Anthem, “mapped” their policyholders onto their ACA compatible plan which most closely resembled their existing plan. This meant that those who did nothing would still be insured, even though most of the time the premium skyrocketed. There were lots of problems related to this because communication about plans and prices along with the billing were often severely delayed.
As plans begin to end in 2014, at least one carrier, Aetna, is not mapping their policyholders to a new plan. Our agency has 50 policies which are ending between August 1 and Sept 1. Although our agency will be proactive in working with our clients, there are many other policyholders who may not be so lucky and will find themselves uninsured. Aetna has sent one letter so far. I don’t know how diligent they will be to follow up, even though it represents potential preservation of existing business for them.