By GUY KOVNER
THE PRESS DEMOCRAT
Facing a big jump in the cost of her health insurance, Ellyn Moscowitz of Jenner said she was heartened by President Barack Obama’s decision Thursday, to allow some people to keep their health plans for one more year, but she worried about how it will play out.
“I think it’s great,” said Moscowitz, a semi-retired attorney who was among the nearly 220,000 Californians who received cancellation notices from two of the state’s largest insurers, compounded by sticker shock over the cost of a replacement policy.
The Blue Shield of California policy she bought two years ago cost $438 a month and covered all but $2,000 of $52,000 in charges for three days at Santa Rosa Memorial Hospital last month due to a sudden illness.
A comparable plan from Anthem Blue Cross — available through the state insurance exchange, Covered California — will cost $698 a month, a 60 percent increase, and would have left her with an obligation of more than $6,000 for the same hospital treatment.
Blue Shield agreed last week to extend 115,000 policy cancellations in California by three months, from Dec. 31 to March 31, and on Thursday Obama gave insurers the option of continuing current plans through 2014.
That’s where Moscowitz’s enthusiasm wavered.
“I’m still nervous until I hear from Blue Shield,” she said. “Companies can allow us to keep what we have, but they don’t necessarily have to.”
“I really want to keep the plan I’ve got,” Moscowitz said, echoing the sentiments of millions of Americans.
Mike Fitzpatrick, a Windsor general contractor, saw some political expediency in the president’s action.
“He put it off until after the election,” Fitzpatrick said. “You kick the can down the road.”
Fitzpatrick received a cancellation notice from Anthem Blue Cross in September on the plan for him and his wife that cost $588 a month.
Anthem suggested a plan with a premium of $945 a month, and Fitzpatrick said he found a plan at Covered California for $840 — an increase of more than $3,000 a year.
“That’s $3,000 that won’t stay in our local economy,” he said. “You have to have insurance.”
Anthem, which issued 104,000 year-end cancellations in California, had agreed to postpone them until Feb. 28.
Moscowitz and Fitzpatrick were by no means alone as a previously unpublicized economic consequence of the Affordable Care Act, Obama’s signature domestic legislation, punctured the president’s credibility and threatened Democratic Party prospects in the 2014 election.
About 60 percent of the people covered by individual or family health plans — as opposed to group plans — are going to see double-digit premium increases when they sign up for insurance mandated by the law, Santa Rosa insurance broker David Hodges said.
“You are not going to like the exchange at all,” Hodges said, noting two exceptions: low-income people who qualify for insurance subsidies and those who are paying a premium for a pre-existing condition.
Current insurance plans typically cap out-of-pocket payments at $3,000 to $4,000 for individuals and $6,000 to $8,000 for families, Hodges said.
The exchange offers policies with caps of $6,350 for individuals and $12,700 for families, in many cases doubling the out-of-pocket risk for a family with high medical bills, he said.
Hodges said the increased costs are a result of the Affordable Care Act’s requirement that health plans meet new standards, including pediatric dental and mental health care, free services for women such as mammograms and contraception, no coverage limits on essential benefits and no exclusion of pre-existing conditions.
That’s why Anthem Blue Cross and Blue Shield of California initially cancelled 219,000 policies statewide, effective Dec. 31.
Anthem provides 47 percent of the individual health plan enrollment in California, and Blue Shield accounts for 21 percent, according to a California Healthcare Foundation report this year.
Individual plans cover nearly 1.6 million people, or 12 percent of the state’s private insurance market, dwarfed by the 13 million people enrolled in group plans, the report said.
“Allowing consumers to stay in their existing plans longer is the right thing to do for policyholders, Insurance Commissioner Dave Jones said last week, after both companies granted the extensions.
Rep. Mike Thompson, D-St. Helena, hailed Obama’s decision to allow insurance companies a one-year extension on plans that do not meet Affordable Care Act standards.
“This was a promise that was made and it is a promise that should be kept,” Thompson, whose district includes Santa Rosa, said in a written statement.
“I’ve said from the beginning that the health care reform law isn’t perfect,” he said. “But instead of engaging in partisan bickering and playing blame games, I want to work to make health care reform better.”
Sen. Dianne Feinstein, D-Calif., said in a statement that Obama’s action recognized that “some people feel strongly about keeping their current plans,” while the option of buying a new plan through the exchange “remains available and viable.”
Feinstein is one of five co-sponsors of Louisiana Sen. Mary Landrieu’s bill titled Keeping the Affordable Care Act Promise Act.
The bill, which Feinstein described as a “simple fix to a complex problem,” requires insurance companies to maintain indefinitely all individual insurance plans on the market as of Dec. 31.
You can reach Staff Writer Guy Kovner at 521-5457 or firstname.lastname@example.org.