California consumer backlash against Obamacare

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September 28, 2014 by Tony Novak

California health insurance consumers are not happy. I’ve personally noticed a much higher than expected number of calls from CA residents dropping their health insurance plans this summer and now we read news that consumer groups are suing two of the state’s largest health insurance companies for misrepresentation during this past open enrollment season.

It seems that the backlash is affecting both the Covered California state-operated insurance exchange as well as the private exchanges like Members Insurance Exchange operated by SASiD.

I’m concerned that the bad publicity will also affect the short-term medical insurance and supplemental insurance plans that make up the backbone of revenue for Freedom Benefits in California. Since these plans cover services of any medical provider – without any need to stay within any network – there really should not be any problem. Yet provider billing offices intent on collecting cash at the time of service are quick to say “we don’t accept that plan” when really they mean “you’ll have to submit the claim to your own insurance company”.  The natural reaction of consumers is to drop their insurance.

It is clear that bad behavior by insurance companies and medical providers is hurting residents of California. Many have little knowledge of how Obamacare really works. We have a long we to go before consumers understand how to best incorporate smart self-directed health care measures into their personal long-term financial planning.

Meanwhile, Freedom Benefits can offer personal support navigating through the current obstacles, but we can’t solve the underlying problems created by this health reform system. The immediate response for many consumers will be simply to drop coverage and I wouldn’t be surprised to see an increase rather than the intended decrease in the number of working class Californians without health insurance coverage in 2015.

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