3.5 million have lost health coverage, middle class hit with sticker shock

The number of insurance cancellations is beginning to pile up, once again proving false President Barack Obama’s infamous promise that if Americans like their health insurance plan, they can keep it.

Just a few weeks ago, various media reports indicated that hundreds of thousands of Americans had received health insurance cancellation letters. But the Associated Press reported yesterday that 3.5 million have now lost their health insurance coverage because of Obamacare:

The Obama administration insists nobody will lose coverage as a result of cancellation notices going out to millions of people. At least 3.5 million Americans have been issued cancellations, but the exact number is unclear. Associated Press checks find that data is unavailable in a half the states.

Mainly they are people who buy directly from an insurer, instead of having workplace coverage. Officials say these consumers aren’t getting “canceled” but “transitioned” or “migrated” to better plans because their current coverage doesn’t meet minimum standards. They won’t have to go uninsured, and some could save a lot if they qualify for the law’s tax credits.
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But in a nation of more than 300 million, 5 percent is a big number — about 15 million people.

And it’s not just those who purchase individual health insurance plans who are being hit by Obamacare. As Avik Roy recently noted, millions of Americans with employer-based plans will also see disruptions in their coverage. All told, some 93 million people will lose or see disruptions in their coverage, according to the Obama Administration’s own estimates, as plans have to meet a bureaucratic, one-size-fits-all definition of “acceptable” or “adequate” health insurance coverage.

But the lost or disrupted coverage isn’t the end of the story. In a separate story, the Associated Press also explained that many middle class Americans have been hit with sticker shock after seeing the monthly insurance premiums for plans available on the Obamacare exchanges (emphasis added):

The Griffins, who live near Philadelphia on the Delaware border, pay $770 monthly for their soon-to-be-terminated health care plan with a $2,500 deductible. The cheapest plan they found on their state insurance exchange was a so-called bronze plan charging a $1,275 monthly premium with deductibles totaling $12,700. It covers only providers in Pennsylvania, so the couple wouldn’t be able to see the doctors in Delaware whom they’ve used for more than a decade.

“We’re buying insurance that we will never use and can’t possibly ever benefit from. We’re basically passing on a benefit to other people who are not otherwise able to buy basic insurance,” said Griffin, who is retired from running an information technology company.

The Griffins are among millions of people nationwide who buy individual insurance policies and are receiving notices that those policies are being discontinued because they don’t meet the higher benefit requirements of the new law.

They can buy different policies directly from insurers for 2014 or sign up for plans on state insurance exchanges. While lower-income people could see lower costs because of government subsidies, many in the middle class may get rude awakenings when they access the websites and realize they’ll have to pay significantly more.

Those not eligible for subsidies generally receive more comprehensive coverage than they had under their soon-to-be-canceled policies, but they’ll have to pay a lot more.

This family, the Griffins, are the only example laid out by the AP. They also point to a restaurant manger who lost his $100 per month employer-based health plan. Though he’ll get a $500 subsidy from the government, the alternative he found on the exchange will still cost him $600 a month.

President Obama, White House and administration officials have said that people are getting better coverage because of the mandates in the law. But what they’re being forced to pay for may not meet their families’ needs and it also leads to higher premiums. And while they’re saying that subsidies are available, just 48% of Americans who purchase coverage through the exchanges are expected to get them.

Unfortunately, Americans don’t have a choice in the matter and will pay one way or another — either through pricier health insurance premiums or, if they opt not to pay for coverage, the individual mandate tax.