What to Do If Your Health Insurance Is Canceled

A guide for the millions of Americans who will need new policies

If you are among the millions of Americans whose current health plan fails to meet Obamacare’s requirements, you may have to act quickly to avoid a lapse in coverage.
Many of the 12 million people who purchase their own insurance could receive cancellation notices, Health and Human Services Secretary Kathleen Sebelius said at a congressional hearing on October 30.

So what should you do if you’re one of them?

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“You want to look quickly at the options from your own insurance carrier and then on the marketplace,” says Cheryl Fish-Parcham, deputy director of health policy for Families USA, a Washington, D.C.-based nonprofit consumer advocacy group that strongly supports the Affordable Care Act.

Most of these consumers will now have to choose between a handful of plans that are all probably more expensive than their current coverage. On the plus side, the plans also probably offer better coverage, industry pros say. (Health plans are now required to cover preventive services and primary care visits at no extra charge, and they cannot turn people down who have pre-existing conditions, among other changes.)

Navigating the Shopping Process 

However, the shopping process, as many now know, has been complicated by the glitches and crashes plaguing HealthCare.gov, the website hosting the public insurance exchange for 36 states.

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In an effort to streamline the process — and keep customers — some insurers are taking steps to automatically transfer people onto plans with similar coverage, or at least are offering alternative choices when a plan needs to be cancelled.

Blue Cross Blue Shield of North Carolina, for example, is moving customers onto plans with similar copayments and deductibles, says Bruce Allen, director of marketing for the company.

“Carriers are not leaving these customers high and dry,” says Carrie McLean, director of customer care for eHealthinsurance.com, a private insurance exchange with authority to sell the public exchange plans also being sold on HealthCare.gov.

However, consumers who think they may be eligible for subsidies will still have to apply for federal assistance and buy a plan through their state exchange or through the public exchange on HealthCare.gov.

If they face technical issues, they might be able to begin the application process over the phone or in person with the help of a navigator, so their information will be in the system by the time the exchanges are fully functioning, says Fish-Parcham.

Some insurance companies and brokers say they plan to follow up with customers who are likely to qualify for subsidies to remind them to reapply later if they are held back by technical issues.

Insurance Agents Can Help 
To be sure, insurance companies say they have been talking to customers about the upcoming changes for months. Insurers are required to give customers 60 to 90 days notice if they will need to be transitioned onto another plan, says McLean of eHealth, and many have been sharing information on plans with similar prices and levels of coverage.
Still, people should be careful not to rule out other offerings.

While subsidy-eligible individuals might want to wait until HealthCare.gov’s kinks are worked out, those consumers who earn too much to receive a federal subsidy can begin buying coverage now with the help of an insurance agent or broker well-versed in the options, says Carolyn McClanahan, a physician-turned-financial planner and founder of Life Planning Partners, a financial advisory practice in Jacksonville, Fla.

Some consumers who do expect to receive subsidies can begin browsing public exchange plans and can use a subsidy calculator to get an estimate of what their health insurance costs will be, she suggests. (Some brokers say they aren’t yet able to sell plans from the public exchanges because of technical problems.)

Deadline for Coverage Extended
Customers should still have time to change their plans even if they fail to take action now — at least another five months.

Consumers will need to enroll in a plan by Dec. 15 to be covered by Jan. 1, but they will have through the end of March 2014 to change their mind if they are buying a plan on the public exchanges. 

Jonelle Marte covers the economy, jobs and other personal finance topics for MarketWatch.com and WSJ.com

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