Barbara Neff of Santa Monica is one of the roughly 1 million Californians who recently got word that their health insurance coverage would be expiring soon. The canceled plans sparked a political firestorm as people realized President Barack Obama’s promise – “If you like your plan, you can keep it” — didn’t apply to everyone.
But Neff, a 46-year-old self-employed writer, isn’t outraged. She’s relieved. Even though she makes too much money to receive a subsidy to buy insurance under the Affordable Care Act, the policy cancellation was good news for her.
Neff says she’s been stuck in a bad plan because treatment for a back problem years ago red-flagged her with a preexisting condition.
“The deductible has ranged anywhere from $3,000 to as high as $5,000, which means I have to spend that much each year before the insurance even kicks in,” she says. “I was rejected [from a more affordable policy] because I’d had a bout of sciatica five years previously that has never returned.”
On Jan. 1, the federal health law prohibits insurers from denying coverage or charging more for such preexisting problems. That’s opened an array of options for Neff, who has enrolled in a new plan through California’s state-run insurance marketplace, Covered California. On Thursday, the exchange board voted unanimously that it would not extend canceled policies, rejecting the president’s proposed fix for the problem.
Neff’s policy has a $2,000 deductible and her premium will go up by $24 a month. Under the federal law, she’ll no longer have to pay for preventive care, and she figures that alone will more than make up for the additional premium costs.
“I’ve been paying for my mammograms out of pocket and that’s $400 to $450 per year,” says Neff. “That type of care is 100 percent covered under this new policy.”
Huge deductibles have been the norm for Tim Wilsbach, a 40-year-old TV editor who lives in Culver City with his family. Like Neff, Wilsbach also makes too much to qualify for federal subsidies, so when he received his cancellation notice a few weeks ago, he was worried his premium would go up.
Wilsbach has two plans for his family. The one being cancelled is a bare bones policy with an $11,000 deductible that he has for himself and his four-year-old son.
“It was not a great policy,” he says, “which is essentially why we had a second plan for my wife which we paid a little more for.”
Wilsbach and his wife are planning to have a second baby, so they bought a policy for her with better coverage and a $5,000 deductible.
After getting the cancellation notice, Wilsbach checked out plans on the Covered California website and he was pleasantly surprised. He found a plan for the whole family that offers broader coverage, a much lower $4,000 deductible and a more affordable monthly premium.
“Our premium went down, not quite 100 bucks, and just looking through what the plan covers versus what used to be covered, yeah, I’m quite happy about it,” Wilsbach says.
Jane Bradford, 52, is a stay-at-home mom in Pasadena. She’s losing the HMO insurance she has for herself and her three kids, who are 16, 21 and 23. Her policy offers low co-pays for doctor visits and a relatively low $3,000 family deductible, but she’ll shed no tears to see it go. Bradford says that’s because she’s found several plans that will cost hundreds less in monthly premiums – even though her husband’s income is too high for the family to qualify for a federal subsidy.
“Saving possibly $400 or more a month is awesome, so I’m not sad at all,” Bradford says.
None of this comes as a surprise to Micah Weinberg, a senior researcher at the Bay Area Council Economic Institute in San Francisco.
“A lot of the anecdotes about people having policies cancelled and gigantic increases are real but not representative of what’s happening more broadly in the marketplace,” Weinberg says.
Weinberg predicts many people who are losing their policies will come out ahead — even if their premiums go up — because of lower deductibles, full coverage of preventive care and no penalties for preexisting conditions. What’s more, he says, health insurance will almost certainly be cheaper for those who qualify for subsidies – in California, that’s an estimated 1.9 million people.