UnitedHealthcare: Can They Get Away With That?

I received a call the other day from a woman who has a decent but expensive individual health insurance policy with Pacificare.  Pacificare was bought out by UnitedHealthcare a number of years ago and now Pacificare policies are being canceled and converted to UnitedHealthcare policies.  This woman has been informed by United that she’ll go from having a decent health insurance policy to a terrible policy as of November 1st.

Here’s the story of (I’ll call her) Terry:

Terry has diabetes and other conditions that do not allow her to get a new health insurance policy. She pays over $900 per month for her current policy because she took advantage of a 1996 federal law that requires insurance companies to offer a policy without medical underwriting if a person has used COBRA after losing their job; the COBRA runs out; and the person applies for a policy under the Health Insurance Portability & Accountability Act (HIPAA).  HIPAA requires insurance companies to offer a person a health insurance policy with no medical underwriting, but allows companies to double the standard premium and add ten percent – thus making it very expensive for a person who has no other options.

Here are the details:

Terry has had the Pacificare policy for several years. Terry’s  current policy has no lifetime cap on benefits. The new policy will have a $250,000 lifetime cap on benefits !!! I thought all policies after 9/23 could not cap lifetime benefits???

Her current policy has an annual out-of-pocket maximum of $4,000. The new policy will have no cap on her co-insurance!!!

Her current policy includes drug coverge. The new policy has no drug plan.

I am trying to find someone who can tell me:

Is it legal for UnitedHealthcare to convert this woman from a decent health insurance policy to a terrible policy?

How can they have a  lifetime benefit limit on a policy that would begin after September 23? I thought the Affordable Care Act made this change as of 9/23/10.

How can this woman get help in fighting this change in her health insurance coverage?  She’s willing to pay a higher premium, but she cannot change companies because she is un-insurable.

This is an example of why we desperately need the health care reform law (which is mostly health insurance reform).  I sure hope UnitedHealthcare is not allowed to take away this woman’s decent-but-expensive policy and replace it with a policy that isn’t worth the $650 per month they will charge for it. But I kind of figure this huge company knows what they can get away with.

What Next?

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8 Responses to "UnitedHealthcare: Can They Get Away With That?"

  1. I just found some information from the National Association of Insurance Commissioners. This group is working on details of how to oversee changes required by the Affordable Care Act.

    Section 4. Annual Limits Prior to January 1, 2014A. For plan or policy years beginning prior to January 1, 2014, for any individual, a health benefit plan may establish an annual limit on the dollar amount of benefits that are essential health benefits provided the limit is no less than the following:(1) For a plan or policy year beginning after September 22, 2010, but before September 23, 2011, $750,000;(2) For a plan or policy year beginning after September 22, 2011, but before September 23, 2012, $1,250,000; and(3) For a plan or policy year beginning after September 22, 2012, but before January 1, 2014, $2,000,000.

    An important question may be whether or not her new conversion plan is considered to be “grandfathered”, in which case the “no lifetime limit” or interim limits rule would not apply.

  2. tiponeill says:

    If she has no legal recourse, I would recommend that she cause a publicity stink.
    She should wite her paper and on blogs publicly about how United Healthcare has screwed her.
    It seems to me that if she did then people such as myself who might actually be considering signing up for United Healthcare might protest and choose a different company, based upon their treating their customers poorly. Maybe even write AARP and ask if this is the way they treat their customers.
    These companies hate bad publicity

  3. leftfield says:

    Look for more of this sort of thing to show up in the future.  Health care is still in the hands of the insurance companies. 

  4. bjones says:

    First of all there is too little information to determine exactly what has happened or what Terry’s options are for future coverage but it seems her problem was caused by the new health care law.
    The law is not fully implemented and won’t be for several years so nobody can say for sure what it’s impact will be.  The law is over 200o pages long and the regulations once fully implemented will likely exceed 5000 pages.  There are insurance companies that will choose to move out of health markets subject to these provisions to avoid the uncertainty.  Unfortunately, Terry and many others will lose their coverage that has provided them protection.

  5. medicareblogger says:

    You say “there is too little information to determine exactly what happened…..” and then you say “her problem was caused by the new health care law”.  That’s a very interesting thought process.
    It seems apparent to me that Terry’s problem is caused by United taking over Pacificare, something that happened several years ago.  If United can get away with replacing a good, comprehensive policy with terrible policy, and the health care reform law allows this – I think there is a problem with the law.
    Yesterday I sent out emails to a number of sources asking for their advice, but haven’t heard back from anyone.

  6. bjones says:

    There is too little information to know for sure what happened.  However, you state that she was covered under an individual policy that she obtained under the cobra requirements.  It is unclear when she exercised this option but from your comments,  I assumed she had this individual policy for several years.  The only way United Health could cancel this policy is if they had the contractual right to do so.   If she had the policy for several years and United Health had the contractual right to cancel, why did they choose to do so now?  There could be several reasons.  One is this policy would be covered under the new health care law.  This is the reason that I said it seems her problem was caused by the new health care law. The fact that she was offered a policy with a lifetime cap tells you this new policy is NOT covered under the new health care law.  It is simply, an educated guess that United Health canceled the original policy because of the new law and forthcoming regulations.  Unfortunately there will be many people lose existing coverage.   I encourage Terry to look at other possible options.  Hopefully, this helps clarify my earlier statement.   Sorry I couldn’t be more helpful.

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