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Barack Obama

Providers Forced to Cancel Some Insurance Plans

Buffalo, NY (WBEN) - As President Barack Obama pushed his Affordable Care Act, he often said : “If you like your doctor or health care plan, you can keep it.”  .  Some local policy holders are finding out otherwise

Blue Cross Blue Shield of Western New York is one of several providers nationwide that is sending cancelation letters to those who have current insurance plans, saying those plans will be terminated because of Obamacare

 "A small percentage of our customers are being impacted. and right now that's a little less than six percent," says Julie Snyder, a spokesperson with Blue Cross Blue Shield of Western New York

The president's health care law raises the standards for insurance policies and hundreds of thousands of Americans whose policies don't meet the new standards are being told that their health plans are being canceled.

"The first thing they are going to receive is a 90 day notice of a change or cancelation of their current plan or policy," Snyder says adding that the change does not mean a person is immediately canceled.

Meanwhile, Independent Health of Western New York will be changing most of their options for small businesses. "All of our small groups need to be in an affordable care act-compliant plan" said Nora McGuire, Chief Marketing Officer of Independent Health. "The benefits that they will have before and after are very similar." McGuire said that Independent Health also sent out notices to affected policy holders.

New plan prices vary depending on age and location. But nationwide, CBS News is reporting that younger people who currently have high deductible plans will likely pay higher premiums and people with health problems will pay lower premiums.

During testimony before the House Energy and Commerce Committee Wednesday, Health Secretary Kathleen Sebelius faced questions about problems with the website as well as a wave of cancelation notices hitting individuals and small businesses who buy their own insurance.

Citing sources "deep within the ACA," NBC News is reporting about 50% to 75% of 14 million consumers who buy health insurance individually will receive a "cancelation" letter or its equivalent in the next year because their current policies don't meet the standards laid out by the new law.

On Tuesday, Medicare chief Marilyn Tavenner was questioned for nearly three hours by members of the House Ways and Means Committee who wanted to know why so many of their constituents were getting cancellation notices from their insurance companies.

The cancellations problem goes to one of Obama's earliest promises about the health law: You can keep your plan if you like it. The promise dates back to June 2009, when Congress was starting to grapple with overhauling the health care system to cover uninsured Americans.

As early as last spring, state insurance commissioners started giving insurers the option of canceling existing individual plans for 2014, because the coverage required under Obama's law is significantly more robust. Some states directed insurers to issue cancellations. Large employer plans that cover most workers and their families are unlikely to be affected.

The law includes a complicated "grandfathering" system to try to make good on Obama's pledge. It shields plans from the law's requirements provided the plans themselves change very little. Insurers say it has proven impractical. The cancellation notices are now reaching policyholders.

Tavenner blamed insurance companies for cancelling the policies and said most people who lose coverage will be able to find better replacement plans in the health insurance exchanges, in some cases for less money. Change is a constant in the individual insurance market, she added, saying that about half of plans "churn" over in any given year.


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