Sorry, you still can’t keep your plan.
Yes, it is plausible that Democrats are simply posturing about passing a legislative Obamacare “fix.” Still, it’s no small event. Perception matters, after all. And this is the first time we’ve witnessed any serious internal division within the Democratic Party about the future of health care law since Bart Stupak’s inglorious surrender.
It’s unlikely that there would ever be enough votes to pass a useful fix, and the president will never sign one, anyway. So, during a longwinded and confusing presser, he instead offered an administrative fix that permits insurance companies to extend the health plans to Americans who faced cancellation this year. This was meant to diffuse the insurgency and offer Democrats cover. Unlike Fred Upton’s bill, which has the potential to reinvigorated individual market, this plan does nothing. And actually, it’s worse than nothing.
In most states, policyholders have already received cancellation notices and the new rates have been set. Insurance companies would be forced to implement different sets of rules for different groups, depending on when and why their insurance rates were changed. As has been widely discussed, there probably isn’t the time to reissue 2014 plans, anyway. And considering the White House has decided to pin the blame on insurance companies for this debacle, the will certainly won’t be there either.
But even if it were, it would be an expensive proposition for many policyholders. Since 2014 premiums have been calculated based on the assumption (because it’s the law!) that a large group of Americans would soon be transitioning to policies that adhered to Obamacare, allowing millions off the hook would destabilize the entire law. As the America’s Health Insurance Plans CEO warns, if “fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase and there will be fewer choices for consumers.”
Also, left to their own discretion, many states — because of political reasons or practicality — will almost certainly bow out of implementing the fix. Washington’s state commissioner has already said as much, claiming he has “serious concerns” about how Obama’s proposal would undermine “consumer protections” and the stability of the state’s health insurance market.
The one thing the president’s administrative fix does allow is for Democrats to take a year to shift the blame from themselves and onto insurance companies, who were merely complying with the law in the first place.
Senator Jeff Merkley, for instance, told Greg Sargent at the Washington Post that, “The fix outlined by Obama would allow insurance companies to continue existing plans, while requiring them to inform consumers of other options on the exchanges. To fulfill this promise, insurance companies must do their part by extending these plans for their customers.” (Italics mine)
A few weeks ago liberals were arguing that Americans should be thankful the law was forcing them out of these dreadful and useless plans. Now voters should “applaud” the president and lean on their own providers to do the very thing they were told not to do up until Thursday? And not only does the Obama administrative fix ask insurance companies to suspend the law, but to sell consumers on the benefits of Obamacare moving forward.
There are two distinct issues at play: the brutal enrollment /ACA website debacle and then the millions of policyholders whose plans were canceled because of Obamacare. Republicans should be careful not to conflate the two or treat them as equally disastrous. The former impacts only a sliver of the population, most of whom probably want Obamacare anyway. To some extent, at least, it’s a fixable problem, even for government.
The latter, though, will have an acute impact on the future of the law. Especially, since the Obama fix doesn’t really fix anything. Approximately four million policyholders have already received cancellation notices for insurance policies that will be terminated on January 1, 2014. But even if you’re not directly hurt, losing your plan is a fear most people relate to. Polls consistently find huge majorities of consumers are happy with their health insurance. This is what necessitated the Incorrect Promise. And this fix should not allay any of those fears.