Dean Baker, ALTERNET
Terminated policies were introduced after ACA's passing -- often with insurers' knowledge they'd be scrapped.
Terminated policies were introduced after ACA's passing -- often with insurers' knowledge they'd be scrapped.
President Obama has been getting a lot of grief in the last few weeks over his pledge that with the Affordable Care Act (ACA) in place, people would be able to keep their insurance if they like it. The media have been filled with stories about people across the country who are having their insurance policies terminated, ostensibly because they did not meet the requirements of the ACA. While this has led many to say that Obama was lying, there is much less here than meets the eye.
First, it is important to note that the ACA grand-fathered all the individual policies that were in place at the time the law was enacted. This means that the plans in effect at the time that President Obama was pushing the bill could still be offered even if they did not meet all the standards laid out in the ACA.
The plans being terminated because they don’t meet the minimal standards were all plans that insurers introduced after the passage of the ACA. Insurers introduced these plans knowing that they would not meet the standards that would come into effect in 2014. Insurers may not have informed their clients at the time they sold these plans that they would not be available after 2014 because they had designed a plan that did not comply with the ACA.
However if the insurers didn’t tell their clients that the new plans would only be available for a short period of time, the blame would seem to rest with the insurance companies, not the ACA. After all, President Obama did not promise people that he would keep insurers from developing new plans that will not comply with the provisions of the ACA.
In addition to the new plans that were created that did not comply with the terms of the ACA, there have been complaints that the grandfathering was too strict. For example, insurers can only raise their premiums or deductibles by a small amount above the rate of medical inflation. As a result, many of the plans in existence at the time of the ACA are losing their grandfathered status.
In this case also it is wrong to view the insurers as passive actors who are being forced to stop offering plans because of the ACA. The price increases charged by insurers are not events outside of the control of insurers. If an insurer offers a plan which has many committed buyers, then presumably it would be able to structure its changes in ways that are consistent with the ACA. If it decides not to do so, this is presumably because the insurer has decided that it is not interested in continuing to offer the plan.
3 comments:
Except While appearing on Sunday's edition of ABC's "This Week," Sen. Kirsten Gillibrand, D-N.Y., admitted Democrats in the Senate knew Obama lied when he said Americans could keep their insurance.
And Lisa Myers and Hannah Rappleye of NBC News reported: “Buried in Obamacare regulations from July 2010 is an estimate that because of normal turnover in the individual insurance market, ‘40 to 67 percent’ of customers will not be able to keep their policy. And because many policies will have been changed since the key date, ‘the percentage of individual market policies losing grandfather status in a given year exceeds the 40 to 67 percent range.’”
“That means the administration knew that more than 40 to 67 percent of those in the individual market would not be able to keep their plans, even if they liked them,” Myers and Rappleye wrote on the NBC News web site.
Sen. Gillibrand said no such thing. Here's the transcript of the ABC This Week Raddatz interview to which you refer.
RADDATZ: Let me ask you this, I want to go back to this implementation, because we can't quite go forward yet. Did you feel misled by Obama?
GILLIBRAND: He should have just been more specific, because the point is if you're offered by a terrible health care plan that the minute you get sick, you're going to have to go into bankruptcy, those plans should never be offered.
RADDATZ: So, were you misled?
GILLIBRAND: He should have just been specific.
No, we all knew, the whole point of the plan is to cover things people need, like preventive care, birth control, pregnancy. How many women the minute they get pregnant might risk their coverage? How many women paid more because of their gender because they might get pregnant? Those are the reforms...
RADDATZ: But we're talking about leadership here and trust. What does this all say about President Obama's leadership these past few weeks? He fell on his sword but he's missed that sword a couple of times.
GILLIBRAND: Well, no one is more disappointed in the implementation issues than President Obama and he has taken full responsibility for the mistakes and the lack of getting this system up and running when it was supposed to be up and running.
But what this was about, Martha, are those mothers in the emergency room who don't have access to affordable health care. I can't tell you how frightening it is when your kid can't breathe. It is a horrible moment. And I looked at every mother, and I'm telling you, we have to fix health care in this country. So, when you talk about President Obama's legacy, his legacy is going to be offering affordable health care to every family in this country.
RADDATZ: But you talk about this and what they want, 39 Democrats defected in the bill you heard Jon Karl mentioning in the house. 39 Democrats. What does that tell you?
GILLIBRAND: Well, they're just responding to the worries of their constituents. When...
RADDATZ: Exactly.
GILLIBRAND: Right -- because of these implementation issues, there's a number of Americans who got a notice from their insurance saying we're not covering you anymore.
Well, do you know what that creates in a family? Enormous amounts of stress. It's exactly the stress when you don't know how you're going to pay for your child's medicine and you don't know how you're going to pay for the inoculations they need to stay healthy.
And the whole point of the bill is so you can actually get those inoculations. You can make sure your kid isn't going to get sick. You can make sure you get the medicines he or she needs.
RADDATZ: Got to work through it.
GILLIBRAND: They're worried. They're worried. And I think it's not only normal, but our job is to fix these problems. So if they're trying to ally someone's concern just say listen, we're going to make sure there's something affordable. And during this transition period where implementation has been rocky, we're going to allay your concerns, that's reasonable.
And I think many of our colleagues, Democrats and Republicans are trying to figure out do we allay that worry. And that's exactly what the president is doing.
On your second point, the idea that the president in stumping for healthcare reform and the ACA should have discussed "normal turnover" in the insurance industry, and what might happen if insurers changed their policies after the ACA went in effect and didn't meet the minimum standards is ridiculous. We're talking politics here, not academia.
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