Tobacco users caught up in insurer’s Obamacare ‘glitch’

After signing up for coverage and disclosing they were smokers, about 100 New Hampshire consumers, including Terry Wetherby, find their new Anthem Blue Cross and Blue Shield policies cancelled because they were charged incorrect ‘non-smoker’ rates

Retired New Hampshire nurse Terry Wetherby doesn’t hide the fact that she smokes.

She checked the box on saying she uses tobacco and fully expected to pay more for her insurance policy under the Affordable Care Act. “It’s not a secret at all,” she said.

Wetherby dutifully paid the premium Anthem Blue Cross and Blue Shield charged her for January and again for February — and believed she had coverage effective on Jan. 1.

Then when Wetherby went to pay her March premium, she was told she couldn’t. A check arrived in the mail refunding her February premium with a two-word explanation: “Contract cancelled.”

Turns out, Wetherby was among about 100 smokers in New Hampshire caught up in a “technical glitch” that caused them to lose their new health insurance policies because they had been mistakenly charged non-smoking rates, according to the New Hampshire Department of Insurance.

It is unclear if the error affected smokers in other states served by Anthem.

Wetherby, 64, learned on Friday that her insurance was being reinstated, retroactive to Jan. 1, and that the original rate she was quoted — about $26 a month after a big government subsidy — would be honored throughout this year. She turns 65 in October and will then go on Medicare.

“When we were contacted by consumers who were experiencing application processing problems, we reached out to the carrier (Anthem), and worked with them to understand the factual situation,” said insurance department spokeswoman Danielle Kronk Barrick. “Ultimately, Anthem agreed that it would honor the originally quoted nonsmoker rates for the remainder of 2014, even though Anthem believes the glitch was not of its making.”

Still, for the past month, Wetherby has been scrambling to find out what happened and get it fixed. She contacted Anthem, her governor, her Congresswoman, her senator and state insurance regulators. She set up a Twitter account to try to get someone’s — anyone’s — attention.

“How can this be??” she wrote to me. “The ACA guarantees coverage. I went to the ACA website and received a rate. Anthem has taken my premium for 2 months and undoubtedly they have taken the corresponding US government subsidy dollars, yet they tell me I am not covered. I read where Obamacare is covering millions but when I speak to the NH Insurance department I am told many people have the same issue as I do.”

An official with the Centers for Medicare and Medicaid Services, which oversees, said “this was an error committed by Anthem” and that the insurer recently submitted revised data, which will soon be reflected in the online health plan comparison tool.

“CMS works to ensure the accuracy and completeness of the data issuers submit,” agency spokesman Aaron Albright said. “Issuers are also responsible for sending accurate and complete rating information to CMS."

Maine’s insurance superintendent Eric Cioppa said that up to 200 smokers in his state were also affected by Anthem’s glitch. “We have been working with Anthem and they have agreed to not only reinstate the policies but offer and honor the rates that they [the smokers] have been quoted,” Cioppa said.

Cioppa said four consumers had complained to his department about the problem and that officials are now working with CMS to get approval for the fix.

Across the country, some of those signing up for coverage are finding out that their policies are not what they thought: Their physicians are not in their insurance network, their drugs aren’t covered, or their copays are higher than expected. But Wetherby’s case was different — she was left with no insurance at all.

While it is legal in many states to charge smokers more for insurance, it generally is not okay to cancel them based on an error made by the insurer.

Officials at Anthem, the lone Obamacare offering in New Hampshire, did not return multiple emails and phone calls seeking comment. In a letter last week to the insurance department about Wetherby’s case, an analyst wrote that “it was determined that when the policy was to be loaded there was a difference between the calculated rate and the quoted rate, so it was never effective.”

Wetherby is exactly the type of person the ACA is intended to help. Retired in 2013, she lives on Social Security benefits and had been paying $400 per month for high-deductible coverage last year.

Once began working again in November, she logged on and signed up for coverage. Because her income is barely above the federal poverty limit, she qualifies for a huge federal subsidy — $657 a month. She is also eligible for help paying her copays and deductibles.

While Wetherby said she is healthy, she said she was nervous about not having insurance. When she canceled her old policy four days before the new one took effect, “I wouldn’t leave the house. I was so afraid I was going to get hurt.”

Even after what’s happened, Wetherby said she remains a “boisterous” supporter of the ACA.

“It’s been a long hard journey but I still believe in it because I believe that everyone should have insurance,” she said. “The president has just put so much effort into this and I feel we still do have a lot of people in government who believe in this, and I myself believe in it.”

Update: We've added information about additional Anthem customers in Maine who experienced similar problems to those in New Hampshire.

Have you tried signing up for health care coverage through the new exchanges? Help us cover the Affordable Care Act by sharing your insurance story.




MCA & ICAI’s mantra: Invest in PSU IPOs!

The Ministry of Corporate Affairs and Institute of Chartered Accountants of India’s idea of investor “education” is to tell you to invest in IPOs of PSUs! This has been a recipe of losing money

The Ministry of Corporate Affairs (MCA) and the Institute of Chartered Accountants of India (ICAI) have come out with a special edition of ‘A Beginner’s Guide to the Capital Market’. This book, dispensing investment wisdom, includes ‘20 Mantras to Wise Investing’. The 5th Mantra says: ‘Surely Invest in Every PSUs IPOs’. “IPOs are only from very good and profitable PSUs; also very little risk of fraud. There would always be a discount for the retail investors. Don't get bothered by the listing price; stay invested.”

Well, unlike the babus at MCA and ICAI fattened with money from Investor Education and Protection Fund but are totally unaccountable, Moneylife believes in checking data before coming to investment conclusions. And here is the data.

Since 2010, when this booklet was first published, five public sector units (PSUs) have entered the capital markets. However, except National Buildings Construction Corporation Ltd (NBCC), all others have performed very badly. In fact, some of them even failed to cross their listing price.


The S&P BSE Sensex hits a record high on 25th March at 22,079.96. If you had bought shares of PSUs from IPOs, which came after 2010, how much return would you have got by following “Mantra 5”?



Listing Date

Listing day
closing price

Closing price
of 25/03/2014

Returns in %
as on 25/03/2014











Coal India Ltd.










United Bank Of India





Punjab & Sind Bank






This once again proves that investment wisdom is dime-a -dozen and that you can never rely on anything that easily. For whatever its worth, we had identified the investment potential of NBCC and written about it in the Street Beat section of the magazine. NBCC: Solid Foundation. It came with an IPO two years ago. It was listed at Rs100 per share on 12 April 2012. It hit a 52-week high of Rs174.05 on 2 January 2014 and a low of Rs96.05 on 2 August 2013.


SJVN Ltd, earlier known as Satluj Jal Vidyut Nigam Ltd is Hydro-electric power PSU. It got listed on 20 May 2010 at Rs28 and closed the day 10.54% lower at Rs25.05. It made its 52-week low at Rs18.30 on 25 September 2013 and 52-week high at Rs22.70 on 25 November 2013. Till date, it is nowhere near its listing day opening price. As on 25 March 2014, its share prices were down 17.17% compared with its closing price on its listing day.

Coal India Ltd (CIL)

The largest coal producer of the world, CIL entered market with an offer price of Rs245 per share. The IPO got over-subscribed by 14.17 times. On 4 November 2010, it opened at Rs287.75 and closed 19% higher at Rs342.35. On 3 June 2013, it made 52-week high of Rs298.91 and on 30 August 2013 it made 52-week low of Rs238.35. On Tuesday it closed 1.14% up at Rs273.90 on the BSE. As on 25 March 2014, its share price was down 19.97% compared with its closing price on its listing day.


MOIL Ltd, formerly Manganese Ore India Ltd, is state-owned manganese-ore mining company headquartered in Nagpur. It got listed on 1 November 2010 at Rs551 and closed the day 15.34% down at Rs466.5. It made 52-week low of Rs182.35 on 7 August 2013 and 52-week high of Rs259.95 on 24 March 2014. Till date it has nowhere near its listing price of Rs551. On Tuesday, MOIL closed 2.27% down at Rs247.05 on the BSE. As on 25 March 2014, its share price was down by 47.04% compared with its closing price on its listing day.

United Bank of India

United Bank of India is a state-owned lender headquartered at Kolkata. It got listed on 18 March 2010 at Rs77 and closed the day 10.65% down at Rs68.8. It made 52 week low of Rs23.40 on 21 February 2014 and made 52-week high of Rs62.95, a year ago on 18 April 2013. On Tuesday, it closed flat at Rs27.45 on the BSE. As on 25 March 2014, it was down as much as 60% compared with the closing price of its listing day. UBI was recently in the news, saddled by huge bad loans and exit of its Chairman and managing director under cloud.

Punjab & Sind Bank

Punjab & Sind Bank (P&SB) got listed on 30 December 2010 at Rs146.1 but closed the day 13.04% down at Rs127.05. It made 52 week high of Rs63.70 on 2 May 2013 and a 52-week low of Rs36.75 on 29 August 2013. On Tuesday, P&SB closed flat at Rs41.60 on the BSE. As on 25 March 2014, it was down by over 67% compared with the closing price on its listing day.

Hence, if you have followed the suggestion of the brilliant minds of MCA and ICAI, you would have made massive losses. The reason is that PSUs are badly managed – not because they have bad managers – but because they are treated as the personal fiefs by ministers and secretaries.




3 years ago

Nice investor education this.

Beginners will surely learn an early lesson . . . about what NOT to do.

And in equity investing, the Dont's are far more important than the Do's.

Milind Chitnis

3 years ago

Asking small investor to invest in IPOs of PSU in "Beginners's Guide" is a joke. One would have thought a balance fund or diversified fund would be a much better choice.

However having said that, while presenting price performance of past issues, should you not consider "offer price" rather than "closing price on the day of listing"? For person who has applied in IPO, that is the price he has paid.

Gopalakrishnan T V

3 years ago

Investment in IPOS of PSUs is to throw away ones hard earned savings The UPA government has cheated the investors by attractiing them to invest in IPOs and all are suffering. Shipping Corporation of India, NHPC, etc have attracted investors and all are quoting below the issue price.The credibility in the capital market and for IPO issues has been fully lost and investors are cursing the Government and SEBI for trapping and cheating them.The greed of the UPA government has literally given a go bye to the business ethics and open loot through scams, IPOs,bad loans,agressive pricing of any commodity without any rhme or reason have become the order of the day.Wrong taxation policies and laxity in Governance have made a mess of the economy and anybody can get away with anything has become a ground reality. People who think definitely cannot forget and forgive this Government for ever.


3 years ago

There was another chap recommending in a financial daily to invest in CPSE ETF. His argument was 5% discount + 6.66% loyalty bonus will any way give us 12% return. Guess he forgot to factor in the prices of PSU shares a year later.

SC to hear Sahara plea on Wednesday

The apex court said that it cannot appreciate a proposal being made across the bar from Sahara group

The Supreme Court on Tuesday adjourned hearing on Sahara Group chief Subrata Roy's bail plea.


During the hearing on Tuesday, the Sahara group offered to pay market regulator Securities and Exchange Board of India (SEBI) Rs20,000 crore within next 12 months. This is the money, two Sahara group companies collected from investors through optionally fully convertible debentures (OFCD).


In a fresh proposal to the bench of Justices KS Radhakrishnan and JS Kehar, the Sahara group said they will deposit with SEBI Rs2,500 crore within three working days of the acceptance of its proposal and three instalments of Rs3,500 each on 30th June, 30th September and 31 December 2014. The balance Rs7,000 crore would be deposited 31 March  2015, the group said.


The Sahara group said its proposal to deposit Rs20,000 crore to the market regulator in five instalments would be backed by an irrevocable bank guarantee.


The court will consider the proposal on Wednesday as it declined to entertain the same today, saying that it cannot appreciate a proposal being made across the bar. The court said the same should have been submitted to the registry Wednesday evening so that they could have gone through it.


Roy will remain in judicial custody as the hearing on Roy's bail plea will now resume on Wednesday.


The court had 4th March sent Sahara chief Roy and his two directors to Tihar jail for failing to deposit the said amount to the market regulator.




3 years ago

Why SC is listening to Sebi rather than investors who did not come forward against Sahara. Sebi is working under political pressure rather than for justice


3 years ago

SEBI's single point agenda is to demolish Sahara as it clearly knows that it can not win this battle fighting as per Legal provisions under the law's of the land. It has created a very unfortunate situation wherein Hon'ble Court's order is being challenged as "constitutional & illegal".



In Reply to viv 3 years ago

It should be read as "unconstitutional & illegal".

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