In Obamacare political battle, policy cancellation numbers hard to match
Republicans in the Colorado legislature looking to rail against Obamacare this election season will relish a statistical advantage.
They’ve asked the state’s division of insurance to deliver a letter every month reporting the number of health-insurance policies canceled in the state due to the Affordable Care Act. So, new figures will come at a regular clip from now until Election Day.
But the division is quick to note that the statistics the Republican lawmakers are seeking tell only one side of the politically charged story of Obamacare in Colorado. What’s more, officials say, there’s no easy remedy to the problem of imbalance because the division doesn’t collect the kind of statistics that would paint a more complete picture of how the law is working.
The letter the Division sent Monday to the Senate — the first of many to come — detailed that 1,755 policies serving Colorado consumers in the individual-plan market had been canceled over roughly the last 30 days. Those cancelled policies come in addition to the 335,486 plans canceled between October and the end of February.
The numbers sound bad – perfect fodder for stump speeches and political attack ads aimed at Democrats who support Obamacare. But there’s a difference between how the figures sound and what they represent. Division of Insurance Spokesman Vince Plymell says canceled policies don’t translate directly as lost insurance coverage.
“We only have the statistics on the cancellations,” he said. “We’re not a research institute. We don’t measure how people proceed when they find out a policy has been canceled — if they go to new carriers or onto the exchange. We don’t know. We don’t have statistics on how many people are insured or uninsured or whether that number is rising or falling.
“What we do know is that people have more options now than they did before and that they can’t be denied insurance, which is really a good thing.”
The division has been grappling with the charged politics of policy cancellation numbers for months. When the office first started publishing the growing numbers of cancellations in the state, staffers for Democratic U.S. Senator Mark Udall complained that the figures were unbalanced by the fact that insurance companies were offering alternative plans for renewal. Republicans seized on those complaints to suggest Udall was trying to intimidate division employees for political reasons. The flap led to several rounds of news stories and ended when insurance division officials wrote letters and testified that what lawmakers were calling intimidation was more accurately described as the kind of spirited exchange on the content and quality of its work that the division welcomed.
“A fact finding review revealed no evidence of any intimidation and the ‘level of coercion by Senator Udall and/or his staff’ was zero,” wrote Barbara Kelley, director of the Department of Regulatory Agencies in response to a letter of inquiry from Republican state Rep. Amy Stephens. “There was a disagreement among staff about how to characterize the data. However, the situation was neither received, nor acted upon as coercive or intimidating.”
Insurance plans being canceled in Colorado and around the country don’t meet basic product standards introduced by the Affordable Care Act. Just as car manufacturers can no longer sell vehicles without seat belts or with gas tanks apt to explode in a collision, insurance companies now must sell policies that, for example, cover preexisting conditions, offer low-cost preventative care and contain no caps on coverage that leave in the lurch consumers who run up repeat high charges because they have the great misfortune, for example, of getting in a car wreck and then suffering cancer and later multiple sclerosis.
Indeed, the cancellation numbers are being interpreted as bad and good, depending on your view of the system and your politics. Republican lawmakers see the cancellations as a sign of unnecessary disruption and government overreach. Consumer-rights groups see them as damning evidence that many companies for years have been making a great deal of money selling deeply flawed and overpriced insurance plans.
Plymell said the transition this year to the new market being shaped by the Affordable Care Act is bumpy, but that the law already is expanding consumer choice and increasing coverage.
“The fact is, people prefer to do nothing. It’s human nature. They want to stick with what they got, and the law says insurance companies can’t just map people over to a new plan that the insurance companies think is best. So, people have to do something. But now they can really shop around and they can not be denied if they have preexisting conditions. A lot of people will find better plans than the ones that were canceled,” he said.
Ben Davis, a spokesman for the state’s “Obamacare” insurance exchange, Connect for Health Colorado, said it will be very hard to know with certainty how many people who received cancellation letters signed onto new plans directly with their original providers or other insurance companies.
“Anyway, that’s not what we do,” he said. “We’re not tracking those numbers.”
Like Plymell at the insurance division, Davis says that statistics about large populations – such as all of Colorado’s health-insurance consumers — take years to compile.
Davis said that what Connect for Health can and does carefully track is how many people have signed up for coverage on the state’s healthcare exchange.
From October 1, 2013, and March 17, 2014, more than 250,000 Coloradans enrolled through Connect for Health.
The deadline for signing up is in ten days – on March 31.
Tax fines for not signing up for health coverage this year will be substantial and they will grow every year. A fine calculator is available here. If you make $30,000 per year, you will have to pay a $199 fine for not buying health insurance this year, $412 next year and $695 in 2016. If you make $70,000 per year, you will have to pay a $599 fine this year, $1,236 next year and $1,593 in 2016.
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