Are We Freaking Out Yet?

Obama Administration

Much sturm und drang today over the President’s decision to allow people to keep their cancelled health plans for another year. I’ve been busy with other things and am just now catching up with this, and from what I am reading it’s not necessarily a bad thing.

Brian Beutler explains,

If your health insurance carrier has canceled your plan in anticipation of the launch of the Affordable Care Act, the administrative fix President Obama announced Thursday doesn’t guarantee you can get it back.

But setting aside logistical hurdles, it loosens regulations to allow insurance companies to reinstate the plans for another year, if they so choose — and if they first fully apprise you of your other options, including expanded benefits and the potential availability of premium support, on the exchanges.

This solution combines a clever P.R. stunt, a stalling tactic, an act of retribution, the genuine possibility of transition assistance for some, and a large political and substantive gamble. It bears the hallmarks of desperation and frustration and determination, but it just might work.

The idea isn’t to retroactively fulfill the promise he made to everyone whose plans have been canceled, but to demonstrate to the public that there’s now nothing in the law requiring carriers to dump policyholders or uphold their cancellation notices, so that the public takes its concerns and grievances directly to the carriers. That would alleviate pressure on Democratic lawmakers to vote under duress for legislation that would undermine the Affordable Care Act more dramatically.

Insurers are throwing a fit:

The health insurance industry is already attacking a White House fix to Obamacare on Thursday even before the plan is formally announced by the president.

“This doesn’t change anything other than force insurers to be the political flack jackets for the administration,” said an industry insider. “So now when we don’t offer these policies the White House can say it’s the insurers doing this and not being flexible.”

Yes, exactly. And they have only themselves to blame. Back to Brian Beutler:

But setting aside the merits, Obama’s remedy is a justified comeuppance for carriers who defaulted beneficiaries into obscenely expensive plans, which they characterized as “comparable” to the canceled coverage, without apprising them of their options, and blamed the whole disruption on Obamacare. It’s a scolding reminder to particular insurance companies that their lack of integrity exacerbated a problem that might have been contained if they hadn’t acted with such avarice. They are now reaping the whirlwind.

As I understand it, there were two proposals for “fixing” Obamacare in circulation in Congress. Ezra Klein:

The Republican Party’s play is Fred Upton’s “Keep Your Health Plan Act.” The law is poorly named: It doesn’t actually guarantee that you can keep your health care. Instead, it allows insurers to keep offering their current plans and also allows them to offer new plans that aren’t ACA compliant.

At a slim 235 words, Upton’s bill is a master class in the pitfalls of soundbite legislation. It manages to fail to solve the problem it’s actually aimed at while creating a new political problem — this time, for Republicans.

The bill gives insurers the option of renewing their cancelled plans — but, crucially, it doesn’t require them to do so. Few insurers want to renew those plans, as they don’t expect them to be profitable in a post-Obamacare world. So Upton’s bill doesn’t mean people can keep their current health insurance, but it means they can begin (wrongly) blaming their health insurer rather than the Obama administration for the cancellation of that insurance.

Meanwhile, Upton’s bill has a secondary provision allowing insurers to offer new plans in 2014 that don’t comply with the Affordable Care Act’s consumer protections. So if an insurer wants to continue turning people away for being sick, they can go right ahead. If they want to offer shoddy coverage that’ll evaporate the moment a health crisis strikes, that’s their prerogative. The result is that Upton guts the law’s extremely popular insurance regulations. “A vote for the Upton bill, in short, is a vote for everything Americans say they hate about their health-care system,” Jon Cohn writes .

The other plan already out there is Sen. Mary Landrieu’s. This plan would compel insurers to keep the old substandard plans going for those already enrolled, but would not allow them to sell new policies from those plans. And the insurers would have to send annual renewal notices explaining why the plans are crappy. Landrieu suggests that people would want to ditch the old policies once they know they have other options. I think the President’s idea may be the better one, though.

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  1. Dan  •  Nov 14, 2013 @8:44 pm

    The ACA, as I understand it, actually allowed people who [were allowed by the insurers to] buy the skimpy plans before Jan 1 to get them for another year. The insurance industry thought they’d use the opportunity to politic by canceling policies and sending out the notices that were not caused by the ACA. Obama hit them upside the head and laid the blame squarely where the actual fault lie…

    Do you think they will be chastened, and thus restrained from sending all the other notices they have sent or have planned to send out (such as to small businesses)?

  2. Doug  •  Nov 14, 2013 @9:18 pm

    Overall, the administration is reacting to the circumstances they are in. This isn’t ideal, but the deficiencies of the website are forcing a defensive, reactionary posture. If you want to critique from where we should be, and intended to be, the move is one more piece of a disaster.

    I think the White House was blindsided by the contractors who were hired to do the system architecture. They screwed up, covered up, and left the administration holding the bag. Hindsight has 20-20 vision. I’m sure that NOW the president wishes that more aggressive benchmarks had been established so there was warning of the impending crash. If wishes were fishes ,we’d all cast nets.

    The move today effectively thwarts a GOP effort to repeal Obamacare by enabling the insurance companies to continue past bad practices. By fending off the GOP, hopefully, we

  3. Bill Bush  •  Nov 14, 2013 @9:23 pm

    Why does President Obama not say what Dan said above? I am so disappointed in the lack of serious pushback that would reveal the backstabbing and duplicity and theft by the insurance companies.

  4. Doug  •  Nov 14, 2013 @9:25 pm

    (sorry.. new computer) buy some time .. That’s all we need to get the web site fixed and roll out some of the success stories and hard numbers. This will work – it won’t be perfect – but it will work. After people can evaluate how the change (if any) has affected them, the fire storm will die out.

    In that light, the move today was a good one. Not pretty, perhaps, but good.

  5. c u n d gulag  •  Nov 15, 2013 @7:40 am

    Yes, the rollout has been slow.
    And, yes, the website needs a lot more work.
    But the problem is, as usual, and unsurprisingly, our MSM, who are covering this as if it was a sporting event.
    It’s the first quarter of their football game on their home field, and the D-teams Quarterback handed the ball off to the Running Back, who promptly fumbled the ball.
    And the R-team pounced on the ball, and has possession.
    And our MSM is trying to make it seem like the game is over.
    IT’S OVER!!!
    Our “Fourth Estate” makes me want to down a fifth, every day – make that a liter.

    Here’s what I would do if I was in charge of White House communications:
    I’d put up an electronic scoreboard in the Press Room, where the “reporters” and pundits could keep track of the day-to-day progress of PPACA compared to Romneycare, and also compared to George W. Bush’s Medicare Part D fustercluck of a rollout.
    In other words, keep a rolling tally to provide some much needed perspective.

    For instance, today it could say (and I’m just guessing at numbers and percentages, just to make a point here – in other words, I’m doing what Conservative do all of the time, and pull numbers out of my butt):
    DAY 35 Tally, To Date:
    PPACA: 106,000 people – .048% of those eligible.
    Romneycare: 5,000 people – .049% of those eligible.
    Medicare Part D: 12,000 people – .038% of those eligible.

    By providing some perspective, the board would not only reaffirm to “reporters” and pundits that ALL new programs take some time to gain steam, but also provide some cover for Congressional Democrats.

    Why hasn’t anyone thought of doing something like this?
    Or, is this a stupid idea? (Sadly, not exactly a first, from me).

  6. Michael  •  Nov 15, 2013 @12:22 pm

    Those saran wrap plans didn’t qualify as “insurance” anyway. A dollar a month in a coffee can would have been a better plan – and would not have had 40% skimmed off by the “insurance” companies.

  7. Swami  •  Nov 15, 2013 @1:17 pm

    Fellow Patriots ,don’t expend all your outrage on Obamacare. We’ve got Benghazi simmering on the back burner and Fast and Furious is being brought up to the front. We need to allocate our outrage resources in a productive manner. So remember fellow baggers, keep your powder dry and don’t fire until you see the whites of Obama’s eyes.

    Impeach Eric Holder or bust! So many scandals and outrages, yet so little time, tis sad.

  8. Stephen Stralka  •  Nov 15, 2013 @1:54 pm

    c u n d gulag is right, perspective is what we need. I don’t care how disastrous the rollout has been so far, the important thing right now is to fix it, not figure out who to blame. We can worry about that later. Bitch all you want, but if you don’t have any useful suggestions, yes, it’s a clusterfuck, OK? We’ve established that. Now if you don’t have any remedies to propose, then shut the hell up. And do please note that if you were willing to shut down the government and destroy the nation’s credit rating and the global economy in order to “delay” the ACA, your proposals will be assumed to be in bad faith.

  9. erinyes  •  Nov 15, 2013 @2:43 pm

    The stupidity involved with this issue is over the top. Gulag got it right. It seems like the mayor of Toronto, who will soon be living in a van down by the river, is getting more attention than people trying to fix the aca.
    I’m just amazed so many people just don’t get the fact that healthcare should not be held hostage by big insurance.

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