Rise in health care costs for some tied to more benefits

By Guy Boulton

Milwaukee Journal Sentinel (MCT)

Published: Thursday, Nov. 7 2013 10:30 a.m. MST

Associates at Community Health Center wear buttons reading "Get Obamacare" during a session to enroll people in the nation’s new health insurance system at the Community Health Center, Tuesday, Oct. 1, 2013, in New Britain, Conn. The law's implementation has suffered from glitches in the website, as well as the realization that contrary to President Obama's promises, some would be forced to give up their current plans under the Affordable Care Act.

Jessica Hill, Associated Press

Enlarge photo»

MILWAUKEE — If you like your health plan, President Barack Obama said repeatedly and emphatically, you will be able to keep it.

It was a perfect sound bite as he extolled the benefits of health care reform, and it held true for most people — but not everyone.

A small percentage of Americans — particularly those who get health insurance on their own, rather than through their employer — are now learning that the Affordable Care Act requires them to buy new health plans that provide additional benefits at a higher cost.

The situation was well-known all along, at least in the insurance industry and in health policy circles.

“It was an inevitable shoe that was going to drop,” said Tom Miller, a resident fellow at the American Enterprise Institute, a policy research organization. “That doesn’t mean that it was widely understood or perceived.

“Things are only real to people when they happen — when they get a letter in the mailbox.”

That is beginning to happen.

WPS Health Insurance in Madison, Wis., for instance, is starting to send cancellation notices to 9,000 customers who are not in so-called “grandfathered” plans exempt from the new regulations or who have not opted to renew their existing health plan early.

Those customers have the option of buying new plans with WPS or one of its competitors.

About 180,000 people in Wisconsin who buy insurance on their own, as opposed to getting coverage through an employer, eventually could be in the same situation.

For now, many are being given the option of renewing their existing policies early, keeping them in effect through most of next year. Some insurers are avoiding using the word cancel altogether.

Golden Rule Insurance Co., part of UnitedHealth Group Inc., is “not canceling coverage for any of our customers who have our individual and family health plans in Wisconsin,” Ellen Laden, a company spokeswoman, said in an email.

In a letter to customers, the company said they can keep their existing plans, giving them additional time to understand how the Affordable Care Act will work.

The Affordable Care Act, commonly known as “Obamacare,” imposes an array of new regulations on the market for health insurance sold directly to individuals and families.

“The entire individual insurance market is being changed,” said William Custer, an associate professor and director of the Center for Health Services Research at Georgia State University.

Under the new requirements:

—Health plans must provide a package of essential benefits, including preventive care, maternity care and mental health coverage.

—Out-of-pocket expenses, such as deductibles and co-pays, are capped.

—Health insurers are barred from charging women higher rates than men.

—Annual and lifetime caps on benefits are eliminated.

“One of the purposes of the Affordable Care Act was to try to improve the quality of insurance that people buy,” said Henry Aaron, a senior fellow at the Brookings Institution.

Estimates on the size of the individual market nationally vary widely. A common estimate is 15 million, but the U.S. Census Bureau puts it at 19.4 million people.

An estimated 156 million people, in contrast, get health insurance through an employer. For them, the only changes they will notice next year are those made by their employer.

How many people in the individual market will be significantly affected by the changes is a question.

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