Obamacare causing tens of thousands of Mainers to lose insurance plans

President Obama’s signature health care law is causing big shakeups in Maine’s individual and small group insurance markets.

In the individual market, Maine’s two largest insurers, Anthem Blue Cross Blue Shield and MegaLife, have already dispatched cancellation or modified early-renewal notices to tens of thousands of policyholders.

That many Mainers will lose the insurance policies they liked as the result of Obamacare undercuts a promise the president made no less than 36 times. The notices show that for many Mainers, Obama’s promise that you can keep insurance if you like it isn’t true. Period.

According to the non-partisan Kaiser Family Foundation, 15.4 million, or about 5 percent, of the U.S. population gets its insurance on the individual market. Nearly 4 million have already received cancellation notices.

Reached for comment, a spokesman from Anthem declined to answer questions about cancellation letters his company sent to approximately 8,500 individual plan holders.

According to the Maine Bureau of Insurance, Anthem’s notices explained that current plans are being “cancelled and replaced” with the ACA-compliant plan most comparable to the policyholder’s current plan.

The Bureau said that if policyholders who receive cancellation notices do nothing, the new health insurance coverage will begin automatically on Jan. 1.

“The policyholder can choose to obtain coverage from another company either in the federal marketplace or outside the marketplace, or can discontinue coverage entirely,” said Bureau spokesman Doug Dunbar.

“Regarding whether current Anthem policyholders will experience premium increases, it depends on which plan — if any — the policyholder chooses,” said Dunbar. “Some will definitely experience an increase.”

How big will the increases be?

According to information provided by the Bureau, the increased monthly premiums belonging to new plans could be as high as 134 percent, depending on where an individual lives and which plan they choose.

According to the Bureau, Anthem is finalizing another letter that will go out to current plan holders following Superintendent Eric Cioppa’s decision to block a move that would have allowed the insurance company to shift its current members in western and southern Maine into a so-called “narrow” network.

“The Superintendent approved that network for new policyholders, but subsequently denied Anthem’s request to move current policyholders into plans with the narrow network,” said Dunbar. “The new letter will still cancel the current policy and automatically move those policyholders into an ACA-compliant plan, but one with a broad provider network—like the one they currently have.”

It is unclear how many additional Anthem policyholders will be impacted by the second batch of cancellation letters.

MegaLife, a subsidiary of Texas-based Health Markets, insures roughly 11,000 people in Maine. The company sent letters to 3,800 non-grandfathered policyholders in October notifying them of changes to their coverage.

A spokeswoman for MegaLife said the Bureau is allowing the company to alter the policy year of current non-grandfathered plans and all new members enrolled prior to Jan. 1, 2014, to a Dec. 31, 2013 policy year.

The early-renewal move is a quick fix which will temporarily delay the biggest of the ACA-related changes, including higher premiums.

“This allows all insureds who are issued a non-grandfathered plan prior to January 1, 2014 to remain in that plan with a set premium rate through December, 31, 2014,” company spokeswoman Donna Ledbetter said in an email.

“This gives our non-grandfathered plan insureds the maximum level of flexibility when it comes to determining what coverage is right for them. They can shop for new coverage in the marketplace, either on or off-Exchange, throughout the open enrollment period,” she said.

The early renewal, according to MegaLife’s letter, contains a standard premium increase of 3.25 percent. Ledbetter declined to say whether premiums would increase after 2014, when MegaLife’s plans become ACA-compliant.

The insurance shake up has also extended into Maine’s small group market, where most small businesses and even some labor unions shop for insurance.

According to a letter from Christine Burke, executive director of the Maine Education Association Benefits Trust, many current teachers and retirees will be affected by Obamacare-related changes.

In a recent letter to MEA members, Burke wrote, “The Federal Department of Health and Human Services (DHHS) and the Maine Bureau of Insurance are requiring Anthem to remove all small groups (groups with less than 50 employees or full-time equivalents) from the MEABT and cover them under Anthem’s small group “pool” effective July 1, 2014. Per the new law, retirees are not included when Anthem calculates how many members are in a group. The MEA and the MEABT Trustees and staff members are trying to fight this mandatory move, but we aren’t having much luck (yet).”

In the letter, Burke says the MEA is seeking an exemption from this aspect of Obamacare, which will most certainly causes premiums to rise, but has yet to find success.

The cancellations, early-renewals and federally-commanded changes in Maine reflect a nationwide trend of upheaval in the insurance market.

An estimated 3.5 million Americans have lost their insurance plans as a result of Obamacare, and that number could grow to as high as 15 million.

Steve Robinson
Maine Wire Reporter
SERobinson@themainewire.com