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.
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 doesnâ€™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 â€” 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 isnâ€™t to retroactively fulfill the promise he made to everyone whose plans have been canceled, but to demonstrate to the public that thereâ€™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.
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.
â€œThis doesnâ€™t change anything other than force insurers to be the political flack jackets for the administration,â€ said an industry insider. â€œSo now when we donâ€™t offer these policies the White House can say itâ€™s the insurers doing this and not being flexible.â€
Yes, exactly. And they have only themselves to blame. Back to Brian Beutler:
But setting aside the merits, Obamaâ€™s remedy is a justified comeuppance for carriers who defaulted beneficiaries into obscenely expensive plans, which they characterized as â€œcomparableâ€ to the canceled coverage, without apprising them of their options, and blamed the whole disruption on Obamacare. Itâ€™s a scolding reminder to particular insurance companies that their lack of integrity exacerbated a problem that might have been contained if they hadnâ€™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 â€” this time, for Republicans.
The bill gives insurers the option of renewing their cancelled plans â€” 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.