March 31, 2013, was the most important day in health policy, because it was the day I became uninsured. It happened in a good way: not through illness, job loss, divorce or tragedy like most Americans who lose insurance. No, I lost my insurance from a happy circumstance. Let me explain.
For 20 years I had purchased my insurance through a company on whose board I served, paying the full premium with my fellow directors who did the same thing. In 2011 we sold the company at a hefty premium to a strategic partner. It was a great deal for shareholders, employees and our new partner. The only problem was my COBRA coverage would run out March 31, 2013, nine months away from Obamacare taking effect. (If it ever did take effect. Remember, there was a wee thing called a presidential election, not to mention important Supreme Court decisions between July 2011 and January 2014.)
A Cry for Help
In November 2012, a week before Obama's re-election, I was moderating a panel of health plan leaders from the nation's largest insurers, including United, Anthem and Aetna, at a national meeting in Los Angeles. The subject was supposedly the future of commercial accountable care organizations, but I took the opportunity to ask these executives (in front of an audience of 1,200 people) whether any of them would like to take a badly behaved 60-year-old Scotsman in the individual market in California. "Oh, by the way, all I want is a very narrow network that includes Stanford and the Palo Alto clinic."
No one took the bait. Indeed, all of them looked at their shoes and muttered under their breath to each other: "I'm not going to take him, you take him.... Don't make eye contact with him."
It was an awkward moment.
Indeed, a former Kaiser executive jumped up from the audience and said, "You should have joined Kaiser when you had the chance."
We moved on to other topics. It was a great discussion as I recall.
Several of the executives came up at the end and said, privately, "No hard feelings. Stay in touch."
Under the Gun
Fast forward to February 2013. The deadline for the expiration of my coverage looms. I am super-busy post-election: Obama won and then "OMG they are really going to have to implement this thing!" Everyone is on tilt; the prognostication business is booming.
My wife, an old emergency room nurse (not old, seasoned) is on my case about getting coverage organized. Rightly, she points to the economic vulnerability to our family of not having health insurance. This is high-stakes stuff.
It is mid-February. I am in Seattle returning from speaking to the board of Virginia Mason Medical Center. The next day my wife and I are going to Mexico with a golf group to one of those all-inclusive resorts. I always say that the two greatest words in the Scottish language are "open bar."
So, in anticipation of our trip, I promised my wife I would get my insurance application in progress before we left.
I get to the Red Carpet Club in the Seattle airport two hours before my flight back to San Francisco and spend the entire time completing an application on eHealthInsurance.com for a Blue Shield of California $6,000 deductible individual preferred provider organization product (my wife is on Medicare — another story for another day).
eHealthInsurance.com is a very well-designed website, but applying for individual insurance in California took forever in the pre-Obamacare market. Individual insurance was medically underwritten. You must answer questions like: "List all the encounters with your doctors in the last 10 years for what purpose, for what condition." And then they probe: "What was your blood pressure on those dates, your lab results," and so on.
Who knows this stuff? I don't even think my doctor keeps track of all this. So what do you do? You lie!
I complete the 60-page application, press the send button, catch my flight home, and the next morning my wife and I head to Mexico with our group.
We had a relaxing time until the fourth day. My kids couldn't reach me, my clients couldn't reach me, but Blue Shield of California's underwriting department could. They called my cellphone at 10:30 at night in Puerto Vallarta.
I believe it was an outsourced call center, and a fact checker nurse was in Alabama.
We had a lovely chat. She asked all the same questions that I put in the application. Blood pressure? (Lie.) Cholesterol level? (Lie.)
I was not trying to mislead her. I simply could not recollect 10-year-old data points, given that I rarely visit my doctor (because I feel great and the few meds I am on seem to work).
"You'll hear in the next week or so," she said.
Bad News in the Mail
We came home. I had three pieces from Blue Shield. Each in different formats said the same thing. I was denied coverage. Not once, not twice, but thrice. Thrice denied — it was positively biblical!
The explanation was pretty clear. Basically they said: "You're a HONDA: hypertensive, obese, non-compliant, diabetic, alcoholic."
None of this is true ... but it is directionally correct.
Now what do I do?
My Man Sean
Mercifully, I had purchased stop-gap temporary insurance from the Russian Mafia as part of my original application, so I was not completely bare; but it would run out in August, and I would be months away from Obamacare and its exchanges up and running.
I got back with eHealthInsurance. The genius of their system is that you can always call a customer service rep when you are online and they will catch up with you on your application. This is great for those of us of advancing years.
I get my man Sean on the phone.
"Hi Ian; what's up?"
"Well, Sean, I was denied by Blue Shield," I said.
"Yeah, they are denying everyone," he replied.
"Really," I said. "So much for underwriting," I thought.
"I should have sent you to Health Net. They're taking everyone," Sean offered.
"Really," I said. "So much for underwriting," I thought once again.
Sean sent me the details. Of course, Health Net had a different electronic form, so I had to start all over again. Sixty pages online and an hour later of blood pressure (lies), cholesterol (lies). You know the drill.
I near the end. The application is almost complete. Then, two screens from the end, I reach a screen that asks, "Which farm bureau do you belong to?"
Oh, I must have made a mistake. But, I am not going back to the beginning. So I try all the permutations to advance to the next screen. I click that I am in a farm bureau, but I don't know the name of it. Ah-ha! Fooled them. I made it to the payment page.
On the payment page it asks me to pay my premium and an $8 per month farm bureau fee. Now, I believe I have committed federal fraud.
I freeze. Then I call Sean.
"Hi, Ian, wassup?"
"Sean, I've done something wrong. It's asking me what farm bureau I belong to."
"I should have told you about that," he said.
"Told me about what?"
"Well, the way Health Net does this is that it is an association health plan for farm bureaus and you are joining a farm bureau," he explained.
"But, Sean, I am not a farmer. I know nothing about farming. I don't even cut my own grass," I said.
Sean laughed. "Don't worry, it will be fine," he reassured me.
True enough. Two weeks later I get a Health Net Farm Bureau PPO Plan card in the mail. I was thrilled.
I was especially thrilled because that very day I was driving to Sacramento to give a talk to the California Hospital Association's Rural Health Conference. I told them this story, held up my card and proudly declared:
"I'm a farmer, too!"
It's Not Over 'til It's Over
In October I got two mail pieces from the Farm Bureau. The first was an invitation to play in their golf tournament in the spring of 2014. The second was a two-page letter explaining that the Farm Bureau plan was being canceled because of Obamacare and that I should contact the broker, Keenan, to explore my options.
I checked Covered California's website to see the rates in the exchange for San Mateo County and my age. Covered California allows for anonymous shopping, so it is a breeze to find out a rough estimate of premium. And because overpaid health care consultants are not eligible for subsidy, there was no need to purchase through Covered California as long as I could figure out what the network differences were with the plans.
So I called the broker, Keenan. A very friendly woman, Joyce, answered immediately. Yes, she was familiar with the Farm Bureau cancellations and explained my options and prices. Prior to this I had badgered friends of mine who were senior executives at Sutter to let me know if the Palo Alto clinic was in any exchange network. Blue Shield only, they told me.
I checked this with Keenan. "Yes, Blue Shield is the same network in the individual market inside and outside the exchange, but Anthem and Health Net is likely not; we don't know all the details yet. And of course, because of our law in California, the prices are the same in and out of the exchanges for each carrier."
"I can send you the referral to Blue Shield and you can complete the application on their website and pick the specific plan you want," she said.
It took me three minutes to buy the insurance online at Blue Shield's website.
I received an e-mail confirming my application with Blue Shield had been accepted (because Obamacare guarantees issuance). Ironically, it was the day before I was addressing the California Association of Health Plans, whose current chair is the CEO of Blue Shield of California, Paul Markovich.
At the group dinner the night before my talk, I gave Paul the heads up that I was going to tell the whole shaggy dog story about thrice denied, the Farm Bureau, the whole thing to illustrate the good and ill of Obamacare.
The next day, he sat in the front row, with remarkable good humor. And didn't even cringe when I told him:
The individual market was broken. A full 19 percent of Americans who applied for insurance in the individual market were flat out denied and never got coverage. Indeed, Commonwealth Fund surveys in 2011 showed that 45 percent of people who tried to buy insurance in the individual market were either denied or gave up even trying because of costs. Some who got coverage in the individual market paid prohibitive rates. But, many of the 15 million people who had individual policies were presumably happy. They may have been willing to take on greater risks, such as higher deductibles, that are deemed substandard under Obamacare. And they are legitimately angry that their coverage has been disrupted. But, it is important to stress that these folks are the beneficiaries of medical underwriting.
Anyone who made it through medical underwriting is by definition a better risk and would have had lower premiums than in a community-rated, guaranteed issuance world. (A half dozen states such as New York and Washington already had guaranteed issuance, so individual plan holders paid astronomical rates before Obamacare and are now seeing big premium declines in those states, especially with subsidies.)
Kaiser Family Foundation surveys show that 45 percent of folk in the individual market are solo proprietors or small business owners like me. A further 19 percent are early retirees. They are more affluent than the population as a whole (indeed, about half of those in the old individual market would not be eligible for any subsidy or for Medicaid). The folks who are healthy and insured and benefitting from medical underwriting will (by definition) pay more if they get a cancellation notice, and they should have been told well in advance that this would happen.
But, the whole premise of Obamacare is that because of guaranteed issuance, community rating and subsidies through exchanges, the well subsidize the sick, the rich subsidize the poor, and the young subsidize the old. Some people call that socialism. I call it civilization.
I'd rather pay more and not be worried about being denied, and have millions more Americans join in that same sense of security. You shouldn't have to become a farmer to get health insurance. It's too much like hard work.
Ian Morrison, Ph.D., is an author, consultant and futurist based in Menlo Park, Calif. He is also a regular contributor to H&HN Daily and a member of Speakers Express.