Remember health insurance before the Affordable Care Act?

Consumer Reports

Here’s a question for pundits and politicians outraged over people whose individual insurance plans are being canceled because they don’t meet the new health law’s standards. Have you forgotten what a nightmare this branch of health insurance was before?

To jog your memories, I dug out an article on the subject I did back in 2008. Its title: "On Their Own: Far From a Remedy, Insurance for Individuals is a World of Pain".

It featured the stories of:

  • The Georgia real estate agent whose group health plan was folding and who couldn’t find replacement insurance unless it excluded coverage of her $1,700-a-month rheumatoid arthritis medication, without which she would quickly become disabled.
  • The Arizona small business owner who could only find insurance if it excluded coverage of anti-rejection drugs he was taking for a successful liver transplant he’d had years before.
  • The Virginia early retiree who discovered he was uninsurable at any price because of his diabetes, despite the fact that he kept it under perfect control.
  • The Indiana lawyer whose longtime insurance company, following standard industry practice, deliberately shrunk his plan’s risk pool to drive his premium up to more than $4,200—a month!—and him out of the plan.

The article also featured the resuts of a survey we did, which found that 76 percent of uninsured respondents said they couldn't afford an individual plan. And the ones who were "lucky" enough to have this type of coverage didn't like it very much because it was more expensive and had more limited coverage than health plans available through an employer.

Because of the new health care law people like these, who did nothing wrong except to have the bad luck to be stranded in the individual market, can now get health coverage at a price they can afford. Insurers can’t turn them down or exclude coverage of the treatments they need the most. They can’t slice and dice risk pools to drive longtime policyholders away. They can’t charge them more because of pre-existing conditions.

I’m not the only person to call attention to this. Jonathan Cohn, writing in the New Republic, points out that “The most egregious insurance company abuses—rescinding policies for people who get sick, failing to pay for services that beneficiaries assumed were covered—usually come from the non-group market.” 

So the next time you hear about someone whose individual coverage is being canceled because of the new health care law, consider that the new law is making this market work better for the vast majority of people who are either already in it or need to be in it because they have no other place to get covered.

Got a question for our health insurance expert? Ask it here; be sure to include the state you live in. And if you can't get enough health insurance news here, follow me on Twitter @NancyMetcalf.

—Nancy Metcalf

Health reform countdown: We are doing an article a day on the new health care law until Jan. 1, 2014, when it takes full effect. (Read the previous posts in the series.) To get health insurance advice tailored to your situation, use our Health Law Helper, below.



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