The botched rollout of the health insurance exchange websites has commanded the bulk of the media’s attention over the past few weeks. But a Talking Points Memo investigation shows that there are other important problems with the advent of the Affordable Care Act.
Talking Points Memo reporter Dylan Scott found that health insurance companies are attempting to hold on to customers by sending them misleading letters encouraging them to stay with the companies’ own health plan. The missives sent to customers state that their current health plan is being axed to comply with Obamacare, but that a new health plan offered by the company would be similar to their old ones. The letters sent to customers don’t mention the health care exchanges they could look into to get cheap health plans. The insurance offers Scott investigated were considerably more expensive than what customers would obtain under Obamacare. While it’s unclear how many of these letters have been sent out, the media outlet has confirmed the existence of misleading letters in at least two cases.
“If you're an insurance company, you're trying to hang onto the consumers you have at the highest price you can get them,” health policy analyst Laura Etherton told TPM. “You can take advantage of the confusion about what people get to have now. It's a new world. It's disappointing that insurance companies are sending confusing letters to consumers to take advantage of that confusion. The reality is that this could do real harm.”
Take the case of Donna, who didn’t share her last name because she was publicizing personal financial information. In September, LifeWise, a Washington health care company, sent her a letter canceling her insurance plan but also offering a new, ostensibly similar one. But under the new plan, she would have paid an extra $1,000 a month. There was no mention of an Obamacare plan that would have saved her money, even though such plans were being offered by the same company.
“The info that we were sent by LifeWise was totally bogus. Why the heck did they try to screw us?" she said. “People who are afraid of the ACA should be much more afraid of the insurance companies who will exploit their fear and end up overcharging them.”
The practice of sending out these misleading letters has been brought to the attention of the state insurance regulator in Washington. Officials issued a letter stating, “Don't just take what your insurance company says, make sure you shop around. You have the right to buy any plan inside the new exchange or in the outside market.” The insurance companies say it’s just the market at work.
Washington isn’t the only state where this is happening. Kentucky officials have fined the insurance company Humana for sending out misleading letters that say that rates could increase under Obamacare plans, and that they should renew their company plans. And regulators in Colorado and Missouri have seen similar letters from health insurance companies.