Posted by: AtlasMD

December 14, 2013

ACA Cancels New York Creatives’ Coverage

Anemona Hartocollis wrote in The New York Times, “Many in New York’s professional and cultural elite have long supported President Obama’s health care plan. But now, to their surprise, thousands of writers, opera singers, music teachers, photographers, doctors, lawyers and others are learning that their health insurance plans are being canceled and they may have to pay more to get comparable coverage, if they can find it.”

Touche. Get a lot of people to vote for something by promising universal benefits for all. Then fail to benefit not only the people you promised to help, but also the law’s supporters. This seems like solid politics.

New York developed an unusual, informal health insurance system where independent practitioners were able to get lower insurance rates through group plans. These were typically set up by their professional associations or chambers of commerce. These people were able to avoid the sky-high rates in New York’s individual insurance market, (historically among the most expensive in the country).

However, under the Affordable Care Act, these creatives will be treated as individuals and will be responsible for their own insurance policies. This is likely to prohibit their access to a wide network of doctors and a range of plans that were tailored to their needs. Many are finding that their current premiums accented by higher deductible and co-pay costs. Or, their coverage could resort to something more “minimal.”

According to the Times, “Ms. Meinwald, 61, has been paying $10,000 a year for her insurance through the New York City Bar. A broker told her that a new temporary plan with fewer doctors would cost $5,000 more, after factoring in the cost of her medications.”

Ms. Meinwald went to the state’s health insurance exchange and said she found those plans didn’t offer a good selection of doctors, and that it was difficult to even find out who the doctors were. “It’s like you’re blindfolded and you’re told that you have to buy something,” she said.

The externalities didn’t stop with singers and writers, though. Those affected also include independent tradespeople, like home builders or carpenters, who work on their own.

Wait, why were these policies cancelled if they were so good?

While policies have been canceled because they did not meet the law’s requirements for minimum coverage, many of these New York policies being canceled actually meet and often exceed the standards, according to brokers. The Times spoke to Larry Levitt, a health policy expert at the Kaiser Family Foundation, who said, the rationale for disqualifying those policies was to prevent associations from selling insurance to healthy members who are needed to keep the new health exchanges financially viable. Okay, so the government intervened in the market and decided that their intervention needed more intervention.


Xzibit understands the government’s logic.

Mr. Levitt said, Siphoning those people would leave the pool of health exchange customers “smaller and disproportionately sicker.” In turn this would drive up rates, something that would render Obamacare a failure.