There's been a lot of media focus on people who have been getting letters from their health insurance companies telling them that their plans are being cancelled and they'll have to pay a lot more for the equivalent plan that the insurer will happily roll them into. What's missing in at least some of these letters, a
new TPM investigation finds, is that the customer has many more choices and might be eligible for subsidies if they shop on the new health insurance exchange. Some of the letters don't even mention that there
is a health insurance exchange.
One of the people featured is Donna, a 56-year-old Seattle resident with a 57-year-old husband and 15-year-old daughter. Her insurer, LifeWise of Washington, sent her a letter that said nothing about the exchange, telling her she'd be rolled into a new plan that would cost her about $300 more a month. Donna knew about the new marketplace, so she shopped there, and found a plan that would save her family more than $1,000 a month with her subsidy. Donna knew about the exchange and was able to shop around. Some of these health insurers are banking on finding customers who aren't as knowledgable, and will take the bad deal offered to them.
TPM has confirmed two specific examples where companies contacted their customers prior to the marketplace's Oct. 1 opening and pushed them to renew their health coverage at a higher price than they would pay through the marketplace. State regulators identified the schemes, but they weren't necessarily able to stop them.
It's not yet clear how widespread this practice became in the months leading up to the marketplace's opening -- or how many Americans will end up paying more than they should be for health coverage. But misleading letters have been sent out in at least four states across the country, and one offending carrier, Humana, is a company with a national reach.
Those four states are Washington, Colorado, Kentucky and Missouri, but those probably aren't the only states. In the case of Donna, the insurer told TPM that their "experience is that our customers are already aware that they have other options in the market and that we've never had to tell them in the past that we have competitor." What he's not saying that his own company had a plan that would have offered Donna a much better deal on the marketplace, but that here was an opportunity to try to dupe the customer in to a more expensive one.
In Kentucky, Humana did dupe 2,200 people into taking that bad deal, but a proactive insurance commissioner heard about the scam and put an end to it. The result was that those 2,200 were released from their obligation to Humana, and allowed to shop on the exchange for a better deal. They also gave Humana a whopping $65,000 fine for misleading practices.
That's what happens when there's an insurance commissioner who is proactive and in a state that is trying to make Obamacare work. In the 36 states that didn't set up their own exchanges, where state government is hostile to Obamacare, who knows how many people are being taken in by their insurers?
