Why has my health insurance policy been canceled?

Insurance companies canceling individual plans because they don’t comply with ACA.

Many individuals who have been purchasing their own insurance (an estimated 14 million in the United States) are finding that their insurance companies are canceling their policies. The companies are pointing out that they are not dropping their customers but they are instead dropping certain policies. That’s because the policies do not meet the requirements of the Affordable Care Act (ACA). In particular, these policies do not provide all of the required “10 essential benefits” that all policies must now provide, as a result of the ACA.

Michigan State University Extension points out that there are other reasons for policy cancelation as well. Many policies that individuals purchased in the past have had a cap on how much the plan will pay for individual medical bills. They may have also exceeded the out-of-pocket maximums for individuals that are now in place under the ACA. Most have denied coverage to people with pre-existing conditions or have charged individuals with such conditions much more for coverage. Beginning in January 2014, these limitations will no longer be allowed, under the ACA.

Individuals who are told that their policies are being discontinued can purchase new policies on the Health Insurance Marketplace. They also have the option of purchasing insurance outside of the Marketplace. Those who choose to purchase their insurance outside the Marketplace, direct from an insurance company or from an insurance broker, for example, will not be eligible for federal subsidies that may offset the cost of the plans.

For some consumers the new plans that are available to them may actually be more affordable. This is especially true for those who have pre-existing conditions or for those who are frequent users of healthcare services. The new plans may also include coverage that was previously unavailable to these customers.

For others the new plans may simply cost more. Some may find that the plans cover services they simply don’t need. For example, not everyone may need maternity care or pediatric dental care. On the other hand, someone with no need for maternity care may need cancer or diabetes treatment. The cost for everyone’s coverage is being shared by all of the insured.

Any consumers who are concerned about increased costs for health insurance can check to see if they qualify for a federal subsidy that will offset the cost of the insurance. These federal subsidies cover individuals and families. An individual whose income falls between $11,490 and $45,960 should be eligible for a subsidy. A family of four, for example with an income between $23,550 and $94,200 will likely be eligible for a subsidy. The lower the income within the given range, the greater the subsidy. The income ranges for other family sizes can be found at www.healthcare.gov. A health insurance cost and savings calculator tool has also been developed by the Kaiser Family Foundation.

MSU Extension is offering consumer education about making healthcare choices in the Marketplace. Through Smart Choice participants will determine what they want from health care providers, compare healthcare plans, determine the cost of the plans and will apply what they learn to make the right choice in healthcare plans for them. Both face-to-face and online workshops will be offered. To find a workshop visit www.msue.msu.edu.

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