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Notices Canceling Health Insurance Leave Many On Edge

One person who got a letter canceling his health insurance was Rep. Cory Gardner, R-Colo. He holds up the letter during a congressional hearing Wednesday on insurance problems. He says his family chose to buy private insurance rather than use the congressional plan.
J. Scott Applewhite
One person who got a letter canceling his health insurance was Rep. Cory Gardner, R-Colo. He holds up the letter during a congressional hearing Wednesday on insurance problems. He says his family chose to buy private insurance rather than use the congressional plan.

President Obama repeated this line or a variation of it many times during the campaign to pass his landmark health care bill: "If you like your health care plan, you'll be able to keep your health care plan, period."

But while that might be true for people who get health insurance through their employer, it's not true for many people who buy their policies in the individual market — about 5 percent of the nation's policyholders.

At a congressional hearing on Capitol Hill Wednesday, Health and Human Services Secretary Kathleen Sebelius said the president had not broken his promise. But that claim has been called into question by the hundreds of thousands of cancellation notices sent to policyholders across the country.

Blue Shield of California recently sent out those notices to more than half of its individual customers, telling them they need to buy more comprehensive policies because of the Affordable Care Act.

"As a result of introducing those new health plans, we could no longer offer the plan that they were currently in," says Steve Shivinsky, a Blue Shield California spokesman. He says those plans will end Dec. 31.

Jamie Walters, who grows corn on 3,000 acres west of Chicago, got a similar letter from his insurer, Blue Cross Blue Shield of Illinois. His old policy, Walters says, covered him and his wife and three young children for $585 a month with a $5,200 family deductible.

He says he got a rude surprise when he went shopping for a new plan on HealthCare.gov: The cheapest plan will cost him $902 a month.

"That plan, that costs us over 50 percent more a month, changes our deductible from $5,200 to $12,700," Walters says.

Part of the reason it's so expensive is that Walters makes too much money to qualify for any government subsidies. For a family of four, the subsidies cut off at $96,000 per year in modified adjusted gross income.

"I think you'll find that many small business owners, young professional families, families with dual incomes, etc., will not qualify for subsidies, because the income limits really are very much smack in the middle of the middle class," Walters says.

As for his thoughts on Obama's claim that those who liked their plan could keep it, Walter says, "I don't know how you can call it anything but untruthful."

Sebelius defended the president at Wednesday's hearing. Most consumers in the individual market, she said, will end up better off.

"A lot of people will have a much better plan at a similar or lower cost," Sebelius said. "Fifty percent of these 11 to 12 million people qualify for a subsidy, qualify for financial help purchasing insurance, for the first time ever."

Johanna Humbert of Galien, Mich., is one of those people. She recently got a letter from her insurance carrier, Aetna, saying her coverage was being cancelled. So she went shopping on HealthCare.gov.

"And once I got through the few glitches that everyone is experiencing, I was pleased to see that I could get a subsidy to help pay for my insurance," Humbert says.

Humbert, who makes between $30,000 and $40,000 a year as a freelance fundraiser for non-profits, found a policy similar to her old one. The deductible is about the same, but the monthly premium of approximately $275 a month is about half what she paid before. And, she says, "I am very pleased with it."

As for that claim — that nobody with insurance would have to give it up — Humbert says she thinks the president was not fully informed.

Copyright 2020 NPR. To see more, visit https://www.npr.org.

John Ydstie has covered the economy, Wall Street, and the Federal Reserve at NPR for nearly three decades. Over the years, NPR has also employed Ydstie's reporting skills to cover major stories like the aftermath of Sept. 11, Hurricane Katrina, the Jack Abramoff lobbying scandal, and the implementation of the Affordable Care Act. He was a lead reporter in NPR's coverage of the global financial crisis and the Great Recession, as well as the network's coverage of President Trump's economic policies. Ydstie has also been a guest host on the NPR news programs Morning Edition, All Things Considered, and Weekend Edition. Ydstie stepped back from full-time reporting in late 2018, but plans to continue to contribute to NPR through part-time assignments and work on special projects.
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  • No one knows for sure right now how many of the estimated 14 million people who buy their own coverage are getting cancellation notices, but the numbers appear to be big. Some insurers report discontinuing 20 percent of their individual business, while other insurers have notified up to 80 percent of policyholders that they will have to change plans.
  • The Health and Human Services secretary was on the hot seat at a House hearing. Her testimony followed another hearing Tuesday at which an Obama aide apologized for HealthCare.gov's troubles and was peppered with questions about Americans who have had their health insurance canceled.
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  • One of the president's most famous promises — "if you like your health care plan, you can keep your health care plan" — isn't true for everyone now that the Affordable Care Act is going into effect, say nonpartisan truth squads.