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My freelance work is organized as a single-member LLC. Since the Affordable Care Act, I have been getting insurance coverage directly from a health insurance provider, with rates equal to those on the exchange. Each year in November, my existing provider sends me a letter in one of two forms:

  • "We are willing to continue your coverage under your existing plan for $X"
  • "We are discontinuing your existing plan, but we are willing to offer you coverage under this other similar plan for $X"

I am reasonably healthy, so all of that has been fine so far. However, I'm over 50, and so the likelihood of chronic health issues climbs with each passing year.

A lot of the ink that has been spilled on the ACA focuses on the insurance rates. My question is about the availability of coverage in the first place.

Suppose I am diagnosed with a chronic medical condition, one needing long-term ongoing treatment and testing:

  1. At the annual renewal time, can my existing health insurance provider simply decline to allow me to renew? I'm focusing here on outright denial of coverage, more than "you can renew but your monthly premium is on par with the GDP of Iceland", which AFAIK is an option that the provider could take.

  2. If yes, how frequently does this occur?

  3. BONUS: Also, if yes, how do the pre-existing condition rules under ACA affect my ability to get insurance from another provider? (UPDATE: HHS states that pre-existing conditions should not block access to insurance, so that's covered)

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    Why all the strange caps in your title?
    – user71981
    Commented Jun 5, 2019 at 6:24
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    @JanDoggen Because some English speaking people have an unexplicable addiction to caps in titles.
    – glglgl
    Commented Jun 5, 2019 at 10:01
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    @JanDoggen: It is a title, and there are capitalization guidelines for titles in writing. I am a writer, so I follow those sorts of style guides.
    – CommonsWare
    Commented Jun 5, 2019 at 10:20
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    @CommonsWare: I don't think that applies to SE titles which are explicitly intended to be a full sentence, as opposed to the name of something which doesn't need to follow (and rarely follows) a sentence structure. Titles tend not to be full grammatical sentences, so the guidelines on titles tend not to account for that either. It'd be more accurate to call it the "question" rather than the "title" (i.e. name). I think this confusion stoms from people (e.g. Jan Doggen) referring to it as a "title" because it is rendered as a heading.
    – Flater
    Commented Jun 5, 2019 at 12:19
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    @Flater: It is also called a title on the form for asking a question. SE titles are not always full sentences -- just look at the "Related" and "Hot Network Questions" lists adjacent to this question. While this was my first question in this particular SE site, I have done a bit of work over in Stack Overflow, so "this is not my first rodeo". I apologize if title case is expressly discouraged on this specific SE site.
    – CommonsWare
    Commented Jun 5, 2019 at 12:39

3 Answers 3

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  1. At the annual renewal time, can my existing health insurance provider simply decline to allow me to renew? I'm focusing here on outright denial of coverage, more than "you can renew but your monthly premium is on par with the GDP of Iceland", which AFAIK is an option that the provider could take.

No.

  1. If yes, how frequently does this occur?

For the time being it's illegal

  1. BONUS: Also, if yes, how do the pre-existing condition rules under ACA affect my ability to get insurance from another provider?

As far as I'm concerned the only consumer protection in the hundreds and hundreds of pages of ACA is the prohibition on pre-existing condition exclusions and forced market pooling.

Markets will be different across the country. Political meddling is sure to affect health markets in the years to come. But for right now, there are no pre-existing condition exclusions and no underwriting. Every year you can shop your policy, your carrier can't cancel you; it can decide to withdraw from a market, it can have provider attrition out of its network; it can reprice things, but it can't focus on your specifically.

Where you should be concerned is the changes under the covers of the policy. Did the carrier change drug formulates, is your doctor still in the network, etc. An individual has almost no reason not to lightly shop the market each year.

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  • "Every year you can shop your policy, your carrier can't cancel you; it can decide to withdraw from a market, it can have provider attrition out of its network; it can reprice things, but it can't focus on your specifically." -- do you know of any human-readable documentation for this sort of thing, short of the "hundreds and hundreds of pages of ACA" itself? My theory is that the reason they discontinue and replace plans is so they can elect to not offer a replacement plan to any customers who they would rather not serve.
    – CommonsWare
    Commented Jun 4, 2019 at 17:51
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    No, but your theory is illegal. The carriers used to do something similar to that via pooling. They would offer new plans in Pool B to attract healthy people who could get through underwriting, over time the unhealthy people in Pool A would be priced out of coverage. Now the ACA says there is no underwriting and there are rules restricting Pooling activity. Applications for health insurance used to be about 35 pages long, now they're about 3.
    – quid
    Commented Jun 4, 2019 at 17:53
  • Could insurance fraud be a legal reason that they drop coverage?
    – MonkeyZeus
    Commented Jun 5, 2019 at 12:02
  • @CommonsWare That would be very inefficient (there is a lot of overhead involved in designing and marketing new insurance plans), and also wouldn't work. They can't deny people access to the new plan, whether it's replacing their old policy or not, and they are still required to cover the same set of core conditions and services either way. It might matter at the margins (like a new drug formulary that doesn't include a drug you need), but not for the bulk of the coverage.
    – Upper_Case
    Commented Jun 5, 2019 at 13:25
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Also, if yes, how do the pre-existing condition rules under ACA affect my ability to get insurance from another provider?

As long as you meet the ACA definition of continuous coverage you don't have to worry about pre-existing conditions. You will be covered as you move between policies within the same insurance company, or if you change insurance companies, or if you switch from one through the exchange to one through an employer. This part of the ACA is considered a provision that people generally like.

as to question 1:

At the annual renewal time, can my existing health insurance provider simply decline to allow me to renew? I'm focusing here on outright denial of coverage, more than "you can renew but your monthly premium is on par with the GDP of Iceland", which AFAIK is an option that the provider could take.

The insurance company is making a business decision regard policies, rates and availability in state X. Therefore each open season you may find that your plan may not be available, or the company may make changes that will cause customers to seek out other options. There are state regulations in addition to ACA regulations that have to be considered regarding the rates and changes, but the fact you have policy Y this year doesn't mean you will have policy Y next year.

Because of the rules regarding plans that meet the tiers in the exchange, and the elimination of rules regarding lifetime limits and pre-existing conditions they are limited in their ability to say customer Z we won't insure you anymore.

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  • "the fact you have policy Y this year doesn't mean you will have policy Y next year" -- understood. However, the "your plan may not be available" and "the company may make changes" are things that would affect a wide range of customers. They are not going to make that decision based on the medical conditions of an individual customer. That's the scenario that I am driving at.
    – CommonsWare
    Commented Jun 4, 2019 at 16:26
  • @CommonsWare they're essentially not allowed to make those sorts of decisions based on a single individual or even based on a population's health conditions. In other words, they can't say "everyone with cancer now has to pay a billion dollars a year."
    – dwizum
    Commented Jun 4, 2019 at 17:39
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    @dwizum: While that sounds wonderful... do you know of any articles or other materials on this? My theory is that the reason they discontinue and replace plans is so they can elect to not offer a replacement plan to any customers who they would rather not serve.
    – CommonsWare
    Commented Jun 4, 2019 at 17:52
  • @CommonsWare See: actuary.org/content/…
    – Morrison Chang
    Commented Jun 4, 2019 at 18:49
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    @aroth That's individual underwriting, which is also illegal under the ACA. There is an exception for different age bands, but that is capped (there is only so much more an older customer can be charged relative to the rest).
    – Upper_Case
    Commented Jun 5, 2019 at 13:27
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The question is legit, but as with stocks, past performance is no guarantee of future results. A single political event renders past behavior obsolete. Specifically, the repeal of the mandate greatly changed the customer base. With no penalty at all, healthy people became far less likely to pay for insurance. The full effect of this hasn't been felt yet.

On the other hand, the GOP has stated that they will have a plan better than any plan on the planet and better than any existing plan offered by the Dems. They say this with such sincerity, it must be so.

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