I knew that the Affordable Care Act was likely a disaster, essentially handing over billions in annual subsidies to for profit health insurers whose overhead is 18-20% vs. Medicare’s 6%. However, I wanted to give President Obama the benefit of the doubt that the health exchange would allow me to buy insurance from out of state and create competition, thus lowering prices and letting me buy a more competitive insurance product.

As a consultant, I currently buy individual insurance in Washington State, which has always been limited to just a few awful providers. I had hoped that the Affordable Care Act would provide me more choice. Recently, I’d heard that the Washington State Insurance Commission had not actually approved any out of state providers to sell insurance here. I’m not sure whether that’s the newness of the program or out and out corruption but it seems suspicious to me.

Washington State has long allowed insurers to maintain a huge surplus of insurance funds (beyond the necessary “reserve”), padding executive salaries and marketing budgets without having to refund unspent revenues to customers. That in itself has been a bizarre artifact of weak Washington State insurance regulations.

Yesterday, I received a letter from Premera Lifewise, my provider, that described the new plan that they said, “is the closest match to my 2013 plan.” If they don’t hear from me, they’ll “automatically move [me] to this plan and you’ll be covered for 2014. What does this plan offer?

My deductible would rise from $1,970 to $6,350 for their network of providers. For out of network providers, they’re allowed to maintain a second deductible, currently, $3,940 which would rise to $12,700. This in itself is a laughable joke. They are essentially converting a bad insurance plan to what is essentially only a catastrophic health plan.

The cost of my plan would drop from $294 per month to $254. However, there would be a new copay for any specialist beside my doctor of $50 per visit.

If this is increased competition and choice, then the Affordable Care Act is dead on arrival.

History of Poor Regulation in Washington State

Regulation of the health insurance industry in Washington State seems to have been a joke for some time. Premera Lifewise is the best policy that I could actually find on the market – and I used an insurance broker to help me review my options.

For example, they are allowed to sell a policy marketed as having (originally) an $1,800 deductible, but in reality it has a second deductible, twice the first, for providers out of network. The companies decide who is in network and who is out of network, turning away providers who have graduated from Washington State universities and certified by state agencies to practice here. So essentially, the policy marketed to me with an $1,800 deductible actually has a combined deductible of $5,400, now $5,910.

Additionally, once you reach the 20 visit limit for physical therapy, there is no coverage. For example, I had knee surgery last year – and just as I paid my deductible, they are allowed to stop covering PT costs. They get to “double dip” at refusing to pay, first with my deductible than with visit limits. I would gladly pay more for a plan that offered higher physical therapy limits but have not found one on the market.

In 2012, they just turned off the prescription drug coverage on my insurance. There’s no vision care and no dental care in this plan – and good luck finding an adult vision or dental plan that makes any fiscal sense.

I try never to call Lifewise, as their customer service line is entirely anti-customer and an inefficient waste of time. I’ve resorted to almost exclusively contacting them in writing. They regularly dispose of letters, so repeatedly, I’ve had to send two to three requests, even sending some via certified mail in order to get a response.

Where is the regulation? I guess I shouldn’t expect much from a legislature in a state that granted its most successful company, Microsoft, $4.3 billion in tax breaks even as the company’s executives hypocritically complained about equivalent spending cuts on Washington State educational systems.

Lifewise 2014 Corrupt Health Plan Offerings

Posted by Jeff Reifman

Jeff is a technology consultant based in the Pacific Northwest.

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