Obamacare’s Losers

Oct 31 2013 @ 3:20pm

This post from Robert Laszweski, a health industry consultant, is making the rounds. His personal health insurance policy was cancelled thanks to Obamacare:

I have been in this business for 40 years. I know junk health insurance when I see it and I know “Cadillac” health insurance when I see it.

Right now I have “Cadillac” health insurance. I can access every provider in the national Blue Cross network––about every doc and hospital in America––without a referral and without higher deductibles and co-pays. I value that given my travels and my belief that who your provider is makes a big difference. Want to go to Mayo? No problem. Want to go to the Cleveland Clinic? No problem. Need to get to Queen’s in Honolulu? No problem.

So, I get this letter from my health plan. It says I can’t keep my current coverage because my plan isn’t good enough under Obamacare rules. It tells me to go to the exchange or their website and pick a new plan before January 1 or I will lose coverage.

His alternatives are worse than what he currently has:

Now, my plan covers about everything. Never had a procedure for either my wife or myself turned down. Wellness benefits are without a deductible. It covers mental health, drugs, maternity, anything I can think of. The new plan would have a deductible $500 higher than the one I now have and a lot more if I go “out-of-network” inside the rest of the Blue Cross national network. And, wait all you people telling me rate shock does not exist, the new far more restricted plan costs 66% more than our current monthly premium. Mr. Rate Shock got rate shocked––and benefit shocked to boot.

Frum had a similar experience:

It’s not only plutocrats and one-percenters who will find themselves worse off; not only the comparatively affluent retirees enrolled in Medicare Plus programs. Self-employed professionals who earn too much to qualify for ACA subsidies will soon discover what I have discovered: They are paying more for a worse product.

McArdle thinks supporters of Obamacare need to be careful about how they respond to these cancellation stories:

The law’s supporters have made some quite reasonable points in response — that rate shock was an unfortunate but necessary consequence of broadening coverage to people with pre-existing conditions, and it may not even affect that many people. You can’t make even the nicest of omelets without breaking eggs. And some of them did mention this at least once during the run-up to the law’s passage.

They’ve also, however, made some arguments that were, at the very least, extremely ill-considered, such as saying that the insurance people had before wasn’t “real insurance” and implying that they are too stupid to know what’s good for them. As product marketers will tell you, when customers complain about a product change, here’s what not to do: Declare that your customers are idiots who don’t understand that they didn’t actually want the thing you took away from them. If you don’t believe me, just ask the folks on the New Coke team.

There’s also a growing trend toward suggesting that either the people complaining about rate shock or their insurers are engaged in some sort of nefarious behavior. I’m pretty sure that David Frum and Bob Laszewski are neither lying nor too stupid to understand what is happening with their insurance policies, and David’s experience basically matches mine shopping on the Washington exchange — not shopping for some outside policy that might be more expensive than the marvelously cheap insurance that I’ve seen people insisting must be available on the exchanges.