When Insurers Drop Policies: Three Stories

One expects to pay more. One expects to pay less. And one is just trying to figure it all out.

Each, in a different way, represents the relatively small part of America that the Obama administration did not talk about while campaigning for the Affordable Care Act: people who have health insurance that they like, but who will be unable to keep it under the law.

Now that new insurance marketplaces are opening, insurance companies are canceling millions of individual plans that fail to meet minimum standards. The dropped plans have become the political talking point of the moment — and, according to many Republicans, a symbol of the president's flawed ambitions.

Mr. Obama says that people will be better off in the long run with more robust coverage.

Yet the individual stories add up to a more complicated tale.

Mr. Nance, who did not like the president's plan to begin with, is angry.

He and his wife recently received a notice informing them that they could no longer keep their existing plan. Their insurance company offered an alternative that would cost twice as much.

"I don't think it's fair at all," said Mr. Nance, 57, a home inspector in suburban St. Louis.

Mr. Wright received a similar notice. But to his surprise, he will pay less by going through a state insurance exchange.

"It's a pretty good deal," said Mr. Wright, 63, a retired editor who lives in Birch Bay, Wash. He said he will save about $100 a month, although his new plan will not cover out-of-network care.

And like many, Ms. Tyrrell is still trying to navigate the new landscape. Her existing plan will be dropped next year, she said, and her insurance company is raising prices by nearly 18 percent.

But she is unsure if she qualifies for federal subsidies because she has had trouble logging on to the problem-plagued government website, HealthCare.gov.

"There's so little information now," said Ms. Tyrrell, 54, a freelance writer in Phoenix.

The Affordable Care Act was signed into law by Mr. Obama in 2010. Since then he has assured Americans: "If you like your insurance plan you will keep it. No one will be able to take that away from you. It hasn't happened yet. It won't happen in the future."

But it is happening. It is unclear how many of the estimated 10 million to 12 million people who have individual insurance plans, as opposed to the vast majority who have insurance through their employers, might see their plans discontinued.

Individual plans are typically renewed annually and, even before the law, such plans were usually subject to changes in rates or coverage. Discontinuing plans affect a small minority of Americans, and some people will be grandfathered in.

Those in plans that have remained essentially unchanged since the law's passage can keep their coverage even if it does not meet the new standards, which include coverage for things like prescription drugs, maternity care and even pediatric dental care.

But because of the transitory nature of the market — individual insurance often serves as a bridge between jobs, or as a stopgap until government programs like Medicare or Medicaid kick in — many customers have changed plans or bought new coverage since the law was passed.

Insurance executives are frustrated. They say they want to keep as many customers as they can and are reluctant to turn away business. And they want to sell as many new policies as they can that comply with the law.

"We're not terminating their coverage," said Jon Urbanek, a senior executive at Florida Blue. Many other insurance executives are reluctant to speak publicly, given the politics and public attention. Privately, many say that technical problems with the federal website have made people anxious about switching plans.

"They are not able to piece together a complete story right now, and that's adding to the confusion," one executive said.

Some insurers are offering to renew existing coverage before 2014. But some people must find an alternative. And some insurers are telling their existing customers about the plans that most closely resemble their current coverage, providing examples of plans that cost about the same or have similar features.

Supporters of the law are quick to note that the individual insurance market was an unforgiving place, favoring the healthy with reasonable rates while excluding older people or those with existing medical conditions. Plans must now offer more comprehensive coverage, and insurers must take all comers. Insurers must also charge everyone, healthy or otherwise, the same rates.

Still, many people were surprised by how the law could affect them. Some said they felt betrayed, given that the president pledged that people could keep their insurance plans.

Mr. Nance was surprised that the new law would affect his family, since they had been paying for their own insurance for 11 years. His plan carries a deductible of $3,000 and a premium of about $500 a month. He said that he and his wife were in good health and that their coverage had met their needs.

Mr. Nance learned in September that his existing plan would end on Dec. 31 because it did not comply with the new law. His insurer, Anthem BlueCross BlueShield, offered a replacement plan that would cost nearly twice as much and come with an annual deductible of close to $12,000.

"It's not affordable, and it's not better than what I had in any way, shape or form," Mr. Nance said. He said he does not qualify for federal subsidies, and has had difficulty signing onto the online marketplace to evaluate his options. For now, he has purchased a one-year plan through United Healthcare that is similar in price and features to his existing plan.

In Arizona, Ms. Tyrrell is struggling to figure out her options. For years she dealt with annual rate increases and the fear that her coverage would be canceled.

"It's a frightening situation," Ms. Tyrrell said. She recently learned that she had rheumatoid arthritis, and when that happened, she said, "I thought, I have lost every bit of bargaining that I possibly had."

Ms. Tyrrell is not sure what she will do, but, despite the problems, she generally supports the law.

"We have to start somewhere," she said.

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