I received a call the other day from a woman who has a decent but expensive individual health insurance policy with Pacificare.  Pacificare was bought out by UnitedHealthcare a number of years ago and now Pacificare policies are being canceled and converted to UnitedHealthcare policies.  This woman has been informed by United that she’ll go from having a decent health insurance policy to a terrible policy as of November 1st.

Here’s the story of (I’ll call her) Terry:

Terry has diabetes and other conditions that do not allow her to get a new health insurance policy. She pays over $900 per month for her current policy because she took advantage of a 1996 federal law that requires insurance companies to offer a policy without medical underwriting if a person has used COBRA after losing their job; the COBRA runs out; and the person applies for a policy under the Health Insurance Portability & Accountability Act (HIPAA).  HIPAA requires insurance companies to offer a person a health insurance policy with no medical underwriting, but allows companies to double the standard premium and add ten percent – thus making it very expensive for a person who has no other options.

Here are the details:

Terry has had the Pacificare policy for several years. Terry’s  current policy has no lifetime cap on benefits. The new policy will have a $250,000 lifetime cap on benefits !!! I thought all policies after 9/23 could not cap lifetime benefits???

Her current policy has an annual out-of-pocket maximum of $4,000. The new policy will have no cap on her co-insurance!!!

Her current policy includes drug coverge. The new policy has no drug plan.

I am trying to find someone who can tell me:

Is it legal for UnitedHealthcare to convert this woman from a decent health insurance policy to a terrible policy?

How can they have a  lifetime benefit limit on a policy that would begin after September 23? I thought the Affordable Care Act made this change as of 9/23/10.

How can this woman get help in fighting this change in her health insurance coverage?  She’s willing to pay a higher premium, but she cannot change companies because she is un-insurable.

This is an example of why we desperately need the health care reform law (which is mostly health insurance reform).  I sure hope UnitedHealthcare is not allowed to take away this woman’s decent-but-expensive policy and replace it with a policy that isn’t worth the $650 per month they will charge for it. But I kind of figure this huge company knows what they can get away with.