HELENA — In Montana, as many as 20,000 holders of individual health insurance policies are getting or will get letters from insurers saying their current policies don’t comply with Obamacare regulations and are being “discontinued.” But insurers say the letters are not cancellations, and that they’re instructing those policyholders on how to get comparable coverage, which may or may not cost more.
“It’s important to note that we are not dropping members from their coverage,” said John Doran, director of strategic marketing services for Blue Cross and Blue Shield of Montana. “Our goal is to provide customers with as many options as possible.”
The letters, which are also being sent by insurers across the country, have sparked a national outcry from critics of the Affordable Care Act.
They say the letters contradict President Barack Obama’s earlier promise that the ACA, also known as Obamacare, would allow people to keep their current health coverage, if they wanted to.
“We told you Obama’s ‘If you like your health insurance, you can keep it’ promise was false,” Montana Republican Party Chairman Will Deschamps said Wednesday. “We told you Montanans would lose their insurance coverage.”
Under the ACA, virtually all health insurance policies must offer a set of “essential benefits,” starting next year.
Most current policies don’t meet these requirements, so insurers are discontinuing those policies and offering new, ACA-compliant policies for 2014. For some customers, the new policies will be more expensive because they have more generous coverage.
For example, the ACA prohibits policies with extremely high deductibles or high out-of-pocket costs. If a customer has to buy a plan with a lower deductible or lower out-of-pocket costs, the premium will probably be higher.
Blue Cross sent notices to about 13,500 individual policyholders in Montana this fall, telling them their current policies are being discontinued because of the ACA.
“We have mapped your current product to plans that are ACA-compliant and are the closest possible match to your current plan,” the letter said.
PacificSource, which has more than 5,000 Montana customers with individual policies, is sending letters over the next few months, when the customer’s current policy expires, said Todd Lovshin, regional vice president for Montana.
Other insurers writing individual policies in Montana are expected to send similar letters, said Jennifer McKee, spokeswoman for the state insurance commissioner. She said the individual market accounts for 6 percent to 7 percent of those with health insurance statewide.
Lovshin said the PacificSource letter instructs customers how they can find a comparable policy.
Lovshin said the company’s been getting plenty of reaction to the letters, but once people understand the options, they “tend to settle down.” They might be able to shop for a policy on the new, online state marketplace and get a less expensive policy or qualify for a subsidy that reduces their price, he said.
“People are questioning and curious about what they need to do,” he said. “People who have chosen to be covered in the individual market are a little bit more savvy than people who are not already in the market.”
McKee said her office also has been getting plenty of calls about the letters, and tells people they can shop for policies with other companies and use the marketplace to perhaps find a subsidized policy.
She also noted that the ACA has a “grandfather” clause that allows people to keep their current policy — if it’s the same policy they had in March 2010. However, if the insurer or the customer has changed the policy in any way since that date, the exemption doesn’t apply, she said.