Edie Sundby, a Stage-4 gallbladder cancer patient who is losing her individual health care policy in California, could pay less for comprehensive insurance in Obamacare’s health care exchanges.
Sundby’s story first gained national attention after she penned an op-ed in the Wall Street Journal on Monday, arguing that Obamacare would cost her more and force her to abandon her cancer doctors. Her high deductible individual health care policy from United Healthcare (called PacifiCare in California) had paid $1.2 million to keep her alive and “never once questioned any treatment or procedure” until earlier this year. In May, the company announced that it would be canceling insurance policies for its 8,000 enrollees and leaving the California market altogether. “Over the years, it has become more difficult to administer these plans in a cost-effective way for our members,” UnitedHealth spokeswoman Cheryl Randolph explained, suggesting that the company had long struggled to compete with insurers like Anthem Blue Cross, Blue Shield of California and Kaiser Permanente, who control more than 80 percent of the individual market.
Its exit left Sundby in a lurch. During an appearance on Fox News on Wednesday, she described her old catastrophic policy as “fabulous” and “fantastic,” in part because it paid for treatment by both Stanford and UC San Diego doctors. But the policy also came at a high cost. The AARP reported last year in a profile of Sundby’s fight against cancer that the family spent “tens of thousands of dollars” on treatment beyond the cost of coverage. “The results, financially, were ‘traumatic,’” AARP quotes her husband Dale as saying. “But we are, as a family, willing to go to the end, to spend whatever it takes. That’s what vows and commitments are all about.”
And so when ThinkProgress estimated the cost of a high-deductible policy offered by PacifiCare and then compared that plan to a policy in the California exchange, we found that the family would pay slightly less and benefit from a whole host of new consumer protections.
Relying on PacifiCare’s base rate filings with the California Department of Insurance, ThinkProgress estimated how much Sundby and her husband (who is on the same plan) could be paying for a high-deductible PPO in the individual health care market in 2013. We grew the base premium filed by the company by a conservative 40 percent to account for underwriting — the process by which insurers increase premiums to account for beneficiaries’ health profile. (On average, PacificCare increases base premiums by as much as 50 percent and given Sundby’s high medical expenses, her policy was likely heavily underwritten.) We also assumed that the couple hit all maximums in accounting for the average annual cost, estimating that they will pay approximately $37,000 for health care by the end of 2013:
PACIFIC CARE PPO (CATASTROPHIC POLICY): $2,186 monthly premium ($26,241/year). $3,000 deductible. 20% co-insurance for in-network (50% out-of-network) $8,000 in-network max. (Estimated annual cost: $37,241)
ThinkProgress then searched the California exchange for the most expensive and expansive health care plan in San Diego and found a Platinum-level “Ultimate PPO” from Blue Cross. Using the same calculations — minus the underwriting increase, which is outlawed by the law — we found that the Sundbys would actually pay less for health care during a high utilization year or $31,028. We did not account for tax credits in our calculations:
BLUE OF CALIFORNIA ULTIMATE PPO: $1,919 monthly premium ($23,028/year). $0 deductible. $8,000 in-network-max (50% co-insurance for non-participating provider). (Estimated annual cost: around $31,028)
The new policy comes with strong consumer protections: Sundby’s plan can’t be suddenly cancelled, it won’t be able to charge her more per month just because she’s a woman and she will likely receive a more comprehensive benefits package with her new policy.
Still, Sundby may need to find a different health care provider, since her doctor at UC San Diego is only participating in one plan offered by Anthem Blue Cross in the exchange, but the same policy is not accepted at Stanford. (“Stanford takes a different Blue Cross plan, one that uses a broader preferred provider network of doctors, but that plan is not available in San Diego.”) If Sundby continues to see the non-participating doctors, she will incur additional out-of-pocket health care costs.
The estimates also assume that the couple hit all of their spending maxes. If they don’t, they could pay even less for health care under Obamacare.