Why is my individual health insurance plan getting cancelled in 2014?

The law of consequences unintended it is.    When messing with a complex system, something will happen, and it's hardly ever what you think is going to happen.   Increase this by a factor of 10 when messing with 1/8th of the US economy. Susan's answer is right on.   Stay tuned for more consequences such as: - Work force 29'ers - employees that can't work more than 29 hours a week due to insurance requirements if they work more. - Temp workers - employers getting around insurance requirements by hiring temps. - Employer 49'ers - employers that keep employee counts under 50 to avoid complying with the ACA. The parade will certainly continue.   You're in your 30s and I presume healthy, you and people like you will likely see a dramatic increase in your premiums to fund older, sicker members of society.  Thanks, just another way our policy choices cheat the young while subsidizing the old.  See Social Security.  I'd suggest voting.

The problem (and frustration) is that your plan is being cancelled because of conditions not related to your own personal medical history. You are healthy and have no dependents. So why should you have to get a new plan? It may be that your current plan is 90% compliant but doesn't include mental health provisions so it was cancelled and you will have to change your policy to comply with Obamacare's more comprehensive coverage. Or you may have being paying a lot less for your insurance because you were willing to take on more risk in case you had a medical crisis. Obamacare doesn't let people save money by buying insurance policies with large gaps. I don't know about what you pay for and what you want, so I can't say much more about your personal plan. Keep in mind that health insurance isn't highly personalized and is designed to make sure that people can afford all types of healthcare (maternity to mental health) and don't live the rest of their lives in debt. For more information, I recommend reading Jon Cohn's http://www.newrepublic.com/article/115661/obamacare-plan-cancellations-faq-about-what-do-next For background, Jon Cohn wrote http://www.amazon.com/Sick-Untold-Americas-Health-Crisis/dp/0060580461 Here are some of the highlights: (1) Your insurance company doesn't have to cancel your current plan in 2014. Cohn writes (emphasis added): The president told insurers they had the option to renew existing plans, even those expiring sometime in calendar 2014, for one more year. And he told state regulators they had the option to allow plans to take that step. But notice the key word in both sentences: "Option." It's entirely at the discretion of the insurers and the state authorities. Some plans, like Florida Blue, have announced they will be offering customers the right to renew expiring policies. But the state insurance commissioner of Washington has already said he's sticking with the original policy: In his state, insurers can't renew plans expiring after December unless those plans qualify for the law's original "grandfather" clause. (That clause allowed plans in place as of March, 2010, to remain in effect indefinitely.) (2) If your insurance company does decide to cancel your plan, it is likely that your current plan has gaps. When you rent a car, do you spring for insurance? Unfortunately, many existing healthcare plans are similar to having little to no insurance at all. Obamacare aims to remedy this so old plans are being cancelled. Cohn writes: In the past, if you got sick, insurance companies would frequently scour your records all over again, just to see if they could find something—anything—that was an early sign of illness. If they found one, they’d refuse to cover your bills and you’d be stuck with tens or even hundreds of thousands of dollars of medical bills. That was called “rescission.” Pretty much everybody thought that was awful. It was a big scandal. Obamacare prohibited that practice. and it isn't just about recission The other big problem with the non-group market is that insurers frequently sell policies that have really big gaps in coverage. The worst of these are so-called “mini-med” plans. You pay some absurdly low monthly fee—$25 or maybe $50—so it sounds like a great deal. But the benefit might consist of covering just a few doctor visits, or maybe a few hundred dollars a year. Then you’re on your own. (3) So what should I expect in my new plan? You won't be billed 6 figure out of pocket expenses by your insurance company. The law sets a broad standard for how much coverage all policies must provide. At a minimum, they must provide an “http://kff.org/health-reform/issue-brief/what-the-actuarial-values-in-the-affordable/” of 60, which is like saying the policy must cover 60 percent of the typical person’s medical expenses. There’s a limit on out-of-pocket expenses: If you have an Obamacare policy, and over the course of a year you end up spending more than $6,350 in co-payments, deductibles and so on, the policy must pick up additional charges completely, as long as they are part of your covered services. (For a family, the out-of-pocket maximum is twice that—$12,700.) And you will have coverage for new benefits covering mental health, rehab, maternity. The law also http://www.cms.gov/CCIIO/Resources/Data-Resources/ehb.html a set of “http://www.washingtonpost.com/blogs/wonkblog/post/what-counts-as-essential-health-care-white-house-tells-states-to-decide/2011/12/16/gIQAzOAmyO_blog.html” that all policies must cover. The standard is a little complicated to explain, but it’s more or less like the requirements now in place for most small business policies—with specific guarantees of prescriptions, mental health, rehabilitative services, and maternity, among other things.

A number insurers are declining to write individual policies and have chosen to leave the California market including United Healthcare and Aetna. Currently United Healthcare has 8,000 members with individual plans and Aetna has 50,000. The companies probably decided that they can't handle the risk of individuals with pre-existing conditions enrolling in 2014 without a drastic increase in rates that would force the healthy members to decline continued coverage. They could essentially end up with a smaller number of sicker patients and it doesn't make financial sense. As rates rise, more healthy individuals will decide to pay the much less expensive mandate "tax" and instead buy insurance later when they need medical care. This effect combined with sicker patients coming in with pre-existing health needs will require a significant rise in premiums (some estimate by a factor of 3 for some individuals with the cheaper high deductible plans) and the calculation will be more financially hazardous for insurance companies that have smaller numbers of enrollees. If your insurance isn't one of these two, then it could be that your high deductible plan isn't in compliance with the mandatory inclusion coverages required by Obamacare. http://www.latimes.com/business/la-fi-unitedhealth-insure-calif-20130702,0,4370321.story For both 25-year-olds and 40-year-olds, then, Californians under Obamacare who buy insurance for themselves will see their insurance premiums double. As you can see, Obamacare’s impact on 40-year-olds is steepest in the San Francisco Bay area, especially in the counties north of San Francisco, like Marin, Napa, and Sonoma. Also hard-hit are Orange and San Diego counties. http://www.forbes.com/sites/theapothecary/2013/05/30/rate-shock-in-california-obamacare-to-increase-individual-insurance-premiums-by-64-146/

The story you haven't heard (yet) in the press is that many very high quality plans are being cancelled because of an unintended consequence of Obamacare.  If you read the news, you likely believe the 10 million+ plans that are being cancelled are all lousy.  Some are, but most are actually quite good. Here's an example: A BlueCross BlueShield of GA plan with a $1000 deductible, 90% coverage, $2000 out of pocket maximum. Unlimited annual and lifetime coverage.  $25 copay's for everything.  Great drug card, huge PPO network.  That is the actuarial equivalent to a Gold or Platinum Obamacare plan but it's being cancelled.  The cost to replace it, by the way, with an Obamacare Gold plan is much higher. This plan is not compliant under Obamacare because of the list of "essential benefits" that every single plan must now adhere to.  There are 10 categories of essential benefits. This plan has 8 of them. The 2 benefits this plan doesn't offer are pediatric dental coverage and maternity coverage.  It doesn't matter that someone with this plan may be a 50 year-old man with no children, if the plan doesn't have maternity and pediatric dental then it doesn't qualify as acceptable under the law. This is the result of trying to enforce a one-size-fits-all program.  I personally have a plan similar to this and mine is also being cancelled.  I've been in the insurance industry for 20 years and I promise you that I carry as good a plan as is available.  My rate under Obamacare,by the way, is doubling if I get a new plan comparable to my current one.  My new plan of course will have maternity coverage which as we all know is essential for a guy pushing 50. The President has gotten himself into some deep water by promising something that couldn't possibly be true under this law.  He's compounding his problem by saying over and over that only lousy plans that don't offer real coverage are being cancelled. When cases like mine, and there are millions of them, start to hit the mainstream news, things are going to get even uglier for the administration.

Hi, The issue here is about the date that you enrolled in your current plan. The Affordable Care Act (Obamacare or ACA) created a new minimum benefit standard for plans bought after the law went into effect in 2010. If you bought a plan before March 23, 2010 with coverage in effect before that date, your plan is grandfathered and does not necessarily need to change next year. If you bought after that, your plan may indeed need to change if it doesn't meet the new ACA standards. But when that change must occur will differ from insurer to insurer and state to state. In some states, the Department of Insurance (DOI) will allow insurers to renew your policy before the end of 2013 and keep it through its renewal date in 2014. If you live in a state where the DOI is allowing this, then your insurer has the choice to renew you or move you to a new "ACA-Compliant" plan. We did also produce a video on this topic, which I'd encourage you to watch. In it we outline how and when these changes might take place.

The old policy was non-compliant and Insurance companies prefer to eliminate the old plan and add a very similar plan than to tweak an existing plan and be responsible for communicating the re-pricing. It has to do with paying lawyers to redraft changes to the wording of the fine print that may require a lot of thought, training sales staff to properly understand and represent the plan, training and communicating all of the changes to the employees responsible for reviewing and approving eligibility and reimbursements. It is just simpler to write new plans. Being grandfathered in, as was the Presidents intention, does not mean that the carrier will want to continue the plan, even if it is a profitable one (crappy for you). It comes down to having too many plans to manage effectively. If the bulk of the marketing tools written for new compliant plans make it obvious that you are paying too much for too little, they don't want to deal with your anger or with negative media coverage. Simplest solution, cancel old policies and start over. Further problems exist where certain new cost accounting provisions need to be applied. Getting something out of the mix is not as easy as it sounds. Say this old plan could have a 25% administration and profit margin and all new plans are limited to 15%. Of you end up with a company-wide 16.5% administration and profit figure, how are you going to prove to a potential ACA auditor that you don't owe 1.5% rebate to all new policyholders? It is not as simple as saying 20% of my policies are grandfathered therefore 20% of my mortgage, CEO, legal and accounting staff, etc are placed into this other pool. Any auditor will find exceptions, interpretations, etc., that will invalidate such a premise, making the carrier responsible not only for rebates but for fines and penalties for not having providing them earlier. Easy solution: cancel and start over. Finally, why is your old policy non compliant? Ten or twenty reasons, but let us just look at two probables. First, you said you wanted a high deductible, but yp also want an out of pocket maximum or you wouldn't be buying insurance. The old policy may have had various copays to physicians that acted like additional deductibles because they didn't apply to your out of pocket maximums. New policies must have true out of pocket maximums, therefore such a policy would have to be re-written so that they would be applied. This changes the cost utilization data program that drives the usage data that determines the carriers net margin and your future premiums. Also, this maintaining two sets of rules, computer programs, etc., is another good reason for a carrier to want to cancel your policy and start over. Second example, Durable Medical Equipment, ie wheelchairs, including $25,000 chairs. Former policies probably had maximums of $2,500 per year, greatly discriminating permanently disabled, whereas new policies can limit how often you can get a new chair but no annual dollar limits are allowed. Such changes are viewed as more complicated than just tweaking your policy, nor is premium estimation a simple underwriting formula change. Even though you may have liked your former policy, it was right priced for you at the time you chose it for the reasons you chose it, perhaps you were wanting to take the risk because you are in excellent physical shape and only wanted catastrophic care, or because you are relatively wealthy and have liquid assets of $100,000 and can better manage your healthcare budget than giving it to an insurance company, it is highly probable that you will find something you like better, now. Given the competition in the California market, a policy for the same premium should be possible that would offer almost the exact coverages but with even lower effective out of pocket, or a slightly lower deductible, or perhaps a lower premium.

Part of the reform rules change underwriting rules pretty dramatically- basically rates can be based on age, gender and tobacco use and that is it. I'm speculating, but likely some carriers have decided that they can't quantify the impact of ACA on the market (particularly the individual market) and are instead choosing to let others stay in the market during this disruptive time.

Aetna and I believe Cigna are not writing INDIVIDUAL policies in California next year, but will continue with group coverage. Likely reason is $$..