No rescissionRescission: a declaration by an insurer that the policy was never in effect, the result being that coverage for a claim, when tendered by a corporate organization to an insurer, is not covered

Here in Alabama, we’re a little behind the curve as it relates to the insurance exchanges as found in the Affordable Care Act. We have not been training navigators. We have the fewest choices of all the states in the federal exchange (The average person in the average state can choose from 53 plans. We get 7 (that’s right, SEVEN)). And, in a surprise to no one, the lack of competition has lead to some very high rates for Blue Cross of Alabama (now covering just 88% of insured Alabamians).

Alabamians should be incredibly excited about the implementation of the exchanges. Just as Medicaid expansion is important for the poor and Medicare is important to those over 65, the exchanges are really important for everyone else.  They allow workers to move from job to job. Without them, in the words of one blogger, our employers have the upper hand

a world where you can’t quit your corporate job for fear of losing health insurance is one where you’re a little bit serf-y. This has long been a secret tax on entrepreneurs, since leaving a big company and starting your own small company has meant going without health coverage.

and if you tried to change jobs

The health insurance behemoths spend jillions of premium dollars paying a small army of people to figure out ways to deny coverage or make your life more complicated, and it’s a horrendously inefficient system. You can spend hours on hold, being transferred, filling out stacks of forms, getting transferred again, and generally being circle-jerked around. It’s like a parody of Brazil.

Is that so big of a fear? Although lack of affordability was the number one cause for folks to remain uninsured, pre-existing conditions was a close second. From a 2012 study

  • 36 percent of those who tried to purchase health insurance directly from an insurance company in the individual insurance market were turned down, were charged more, or had a specific health problem excluded from their coverage
  • 54 percent of people with individual market insurance were worried that their insurer would drop their coverage if they got really sick

Prior to the passage of the ACA, loss of insurance was a huge problem. The percentage of non-elderly Americans with employer-sponsored insurance dropped from 68 percent in 2000 to 59 percent in 2009. This was one of the things that led to the passage.

The other was the boomer bulk approaching and passing 60. While this may be the new 40, it is a 40 with mental illness, arthritis, asthma, high cholesterol, hypertension, and obesity. Each of these diseases would lead to a potential denial so we were looking at up to 129,000,000 folks who if let go, downsized, or just plain fed up would be UNABLE to get insurance. Even worse, they might pay for insurance up until the time the need it and then though a process known in the industry as rescission there is a denial of claims and loss of insurance despite paying for years. This particular brand of terrible saved one insurance company $35 million over 6 years.

It’s not like these folks would sit at home and die quietly or else wait patiently until they turned 65. In 2008, folks without insurance consumed $16 billion in care and in a form of “IV and dash” they did not pay for 63% of the charges incurred.

I will be working with a group of people here in Alabama to dispel some myths and encourage participation in the new exchanges. This law defines what we get when we pay for insurance, forces companies to spend money on care, and allow folks to move from job to job without catastrophic health consequences.

The button pictured above doesn’t quite capture the excitement. Perhaps our button should say: America, now less serf-y!