Beware of ‘health plan nostalgia’ in reporting on insurance cancellations

Image by Enokson via flickr.

Image by Enokson via flickr.

Michael Hiltzik (@hiltzikm) of the Los Angeles Times has done some fine reporting about the bottom line on the health insurance cancellations.

In this piece, he reminds us that, until this wave of headlines about people losing their beloved individual health policies, people hated their individual health policies. Prices rose every year, benefits were skimpier than employer-sponsored coverage, there were lots of out-of-pocket costs, people got dropped from plans – and people who had pre-existing conditions couldn’t get plans.

“It’s time to retire the threadbare meme that the cancellation notices are depriving people of something they love, as though their health plans are as much as part of the family as the dog,” he wrote in what may be my single favorite sentence in a health care story of the past few weeks.

In this one he gently but clearly points to the holes in a widely cited op-ed in The Wall Street Journal by a cancer patient whose plan is being cancelled. Edie Littlefield Sundby is understandably worried about what other kind of coverage she’ll be able to get, and whether it will it allow her to see the doctors who have been handling her complex and life-prolonging treatment. Hiltzik doesn’t ignore her concern about continuity of care with physicians she trusts – but he notes that United Health, her carrier, had said it was leaving the California individual market anyway. Regardless of the Affordable Care Act. And that without the president’s health law and its protection for pre-existing conditions, getting coverage in the future would be a formidable challenge. He writes:

“UnitedHealth alerted Sundby way back in January that it was pulling out of the California individual insurance market entirely. An inescapable question is whether it did so because of Obamacare, or whether it’s just using Obamacare as an excuse to do something it was itching to do anyway. UnitedHealth’s own statements point to the latter.

The firm informed investors of its decision in May, when it announced it would exit the individual market in all but a dozen states. Since Obamacare’s coverage standards are the same in all states, plainly it wasn’t Obamacare – or Obamacare alone – that prompted its departure from California.

The more likely explanation is that UnitedHealth simply couldn’t compete in California’s individual market and no longer wished to try.”

The third is about Deborah Cavallaro, a southern California real estate agent who had become a media poster child for how terrible and costly her Obamacare choices would be now that her current plan is being cancelled. But she had been looking at the “sticker” price, without realizing she was eligible for a subsidy. And she hadn’t understood the difference in coverage until Hiltzik went over the details of the two policies with her (which the other reporters who cited her story did not do.)

“Her current plan, from Anthem Blue Cross, is a catastrophic coverage plan for which she pays $293 a month as an individual policyholder. It requires her to pay a deductible of $5,000 a year and limits her out-of-pocket costs to $8,500 a year. Her plan also limits her to two doctor visits a year, for which she shoulders a copay of $40 each. After that, she pays the whole cost of subsequent visits.”

In the California exchange, she has a few options. She can get a “silver” plan for $333 a month after the subsidy – $40 a month more in than this year’s Anthem cost (which is a 2013 cost – we don’t know what it would have been in 2014 had been continued.) He writes “But the plan is much better than her current plan – the deductible is $2,000, not $5,000. The maximum out-of-pocket expense is $6,350, not $8,500. Her co-pays would be $45 for a primary care visit and $65 for a specialty visit – but all visits would be covered, not just two.”

“Is that better than her current plan?” he asks. “Yes, by a mile.”

She could spend less in premiums if she bought a bronze plan, but that could mean more out-of-pocket costs.

There are other concerns – breadth of network, choice of doctors, etc. That’s legitimate and he addresses those concerns. But his column illustrates not only that brokers, insurers, the California exchanges and the federal government have failed to explain the options to people but also the questions that reporters have failed to ask.