Millions stunned to receive cancellation letters from insurance provider

Millions stunned to receive cancellation letters from insurance provider (Image 1)

Millions of Americans have been stunned to receive policy cancellation letters from their insurance companies in recent weeks.

The reason may not make much sense if you were betting on the president's promise that health care reform would not change your policy or your care providers if you were happy.

Here's the problem. First of all, most Americans aren't in the driver's seat when it comes to choice of health care plans.

Their employer negotiates a group plan with an insurance company and the employee may decide on a few variations of the plan including the amount to be paid for the monthly premium and yearly deductible.

If employers with fewer than 50 employees decide to drop coverage, that's okay under the Affordable Care Act, and many employees are seeing that happen.

For those who chose their own insurance policy on the independent market, if that policy does not meet certain Obamacare standards, it too will be canceled as millions are discovering.

Here's the reason.

The Affordable Care Act mandates health insurance plans include what's called “10 essential benefits.” 

That's what happened to nearly 16,000 Tennesseans who had a minimal insurance plan through the state's CoverTN program.

It did not qualify under Obamacare and so those individuals must look for a different plan in order to have health insurance next year.

Jim Brown with the National Federation of Independent Business says it's unfortunate because many of those folks won't be able to afford coverage in the Health Insurance Marketplace, even if they qualify for federal subsidies.

“A lot of these people in CoverTN are living paycheck to paycheck. They may get a subsidy from the federal government but in many situations they won't be able to afford the premium they'll have to pay.” Supporters of Obamacare say the coverage found in the marketplace is better, and more comprehensive.

March 31 is the deadline to apply for qualified health insurance or face a penalty come tax time.

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